Vinamilk leader: 'Approach the market with quality'

The problem of maintaining quality always has a solution at all times, which is considered the reason why the dairy giant has maintained its appeal in the domestic market for nearly 50 years and reached out internationally.

In July, Vinamilk announced a rebranding by changing its logo to a youthful color. During the year, the brand increased its presence in countries around the world and received many international awards and certifications. Mr. Nguyen Quang Tri, Vinamilk's Marketing Executive Director, shared with VnExpress about the success of the marketing campaign as well as the business's problem of maintaining quality to lead the domestic market and reach international customers for decades.

Mr. Nguyen Quang Tri introduces the new identity on liquid milk products. Photo: Quynh Tran

- What opportunities and challenges do you think the Vietnamese dairy industry is facing?

- In every moment there are always challenges and opportunities, what is important is how we overcome and take advantage of them.

Vinamilk’s biggest challenge now comes from the fierce competition in the market. Although we are still the leader, with a market share four times that of the second place, we are not complacent about the safety gap. If we slow down or stop, one day soon we may be overtaken.

In addition, user needs are increasingly fragmented: some people avoid sugar, others love sweets, young people prefer modernity... Each group needs a different approach, businesses must keep up with the trend of personalization in each product, telling stories suitable for each person.

More broadly, the challenge comes from the global economic downturn. This is a general situation and is related to many industries. Vinamilk still has revenue growth, but purchasing power is also affected.

Despite many challenges, we still see opportunities. Currently, the average milk consumption per capita in Vietnam is still low compared to neighboring countries. According to Research and Markets , the current average milk consumption per capita in Vietnam is only 27 liters/person/year, while in Thailand it is 35 liters/person/year, and in Singapore it is 45 liters/person/year. It is forecasted that the average milk consumption per capita in Vietnam will increase rapidly by 2030. Thus, our market still has great potential.

In Vietnam, rural areas still have a large gap in milk consumption compared to urban areas. Another opportunity is that there are still 1.5 million children born every year; the proportion of the population over 60 years old is increasing. At the same time, after Covid-19, people care more about their health, focusing on using nutritional products. These factors show that there is still a lot of room for growth.

The company's liquid milk products with new packaging. Photo: Vinamilk

- As you said, market demand is increasingly fragmented by age and gender. What do you think has helped Vinamilk convince users for nearly 5 decades?

- Ensuring quality from the very beginning and constantly improving it, meeting strict international standards, I think that is the factor that helps the brand gain the trust of customers. To answer the question of why we can do this, we need to look back at Vinamilk's journey.

Since the early 90s of the last century, we have understood that: to convince consumers, we need to have evidence with tangible numbers and scales. At that time, Vinamilk milk was brought to quality testing centers in Europe and the FDA (USA) for testing, proving to users that the "made in Vietnam" product meets international standards. Currently, Vinamilk's testing laboratories are all certified to meet ISO/IEC 17025 standards: according to the Laboratory Accreditation Program (VILAS) of the Office of Quality Accreditation (abbreviated as BOA, under the Ministry of Science and Technology ).

In addition to quality certification, we set a higher goal: to demonstrate the positive impact of milk on the health of consumers, especially children. In 2009, we coordinated with the National Institute of Nutrition to conduct clinical research on 50,000 children to demonstrate the quality of Dielac powdered milk. Also in this year, another survey showed that 96% of users were satisfied with the quality of Dielac powdered milk.

When the concept of organic food began to gain attention, we had the first Global GAP and Organic farms in Vietnam. This foundation helped us explore the high-end organic segment through products such as USDA Organic Fresh Milk (2015), the first 100% European Organic Fresh Milk produced in Vietnam (2016).

In April this year, we signed a strategic partnership with 6 leading nutrition corporations in the world, applying scientific achievements to raise the international standards of infant formula products and approaching the gold standard of breast milk. Thus, Vinamilk can inherit modern technologies, new research on nutrition, and put them into the infant formula product line. For example, the product will be supplemented with micronutrients and macronutrients found in breast milk such as HMO-2'FL fiber, BB-12 - LGG probiotic duo, Nucleotides mixture...

Modern production line, meeting international standards. Photo: Vinamilk

Advances in technology and production have helped Vinamilk win many international awards for product quality and flavor. Earlier this year, our entire brand of infant formula – also the first powdered milk products in Asia – received the Purity Award – a rigorous award for safety and purity from the Clean Label Project (CLP), a non-profit organization in the US. Vinamilk Green Farm and Vinamilk 100% Organic are also the first fresh milk products in the world to receive certification for safety and purity from this organization.

By the end of June, we had eight products listed in the "Superior Taste" category of the International Taste Institute's Superior Taste Award. Of these, Ong Tho condensed milk and Vinamilk Super Nut 9-nut milk achieved the highest rating - three stars.

Soon after, Vinamilk Super Nut 9-nut milk and Vinamilk Green Farm fresh milk won the Gold award from Monde Selection. Most recently, Vinamilk Super Nut 9-nut milk won the "Best Milk Substitute 2023" award at the 2023 Global Dairy Innovation Awards.

Starting from almost zero in a country with no advantage in dairy farming, the above awards contribute to raising the Vietnamese brand on the global milk map, and are also the answer every time someone asks: how is the quality of Vinamilk? Up to now, we are present in 59 countries and territories, including countries famous for their fastidiousness such as the US, Japan, Korea...

- How can businesses conquer difficult markets in the world?

- Whether exported or domestic, a product that wants to survive needs to have three factors: product quality, price and after-sales service.

Regarding quality, Vinamilk's products are strictly controlled from the input materials stage with Global GAP, Organic standards...; produced according to ISO 9001, FSSC 22000, ISO 17025 standards and certified Halal, European Organic, FDA (USA)... These standards become "passports" for products to enter export markets.

But to retain consumers, the decisive factor lies in taste. In each region, users will have their own habits and preferences. Before entering a market, Vinamilk's market development and R&D department carefully researches the tastes and consumption trends of local people. Through that, we will adjust the formula and flavor to best suit the regional characteristics.

For example, the same Ong Tho condensed milk exported to China, but the flavor in the Guangdong region will be slightly different from that in Guangxi in terms of thickness, sweetness level, protein ratio... Recently, we have just launched a durian-flavored yogurt product exclusively for the Chinese market, satisfying the "durian craving" of the billion-people country.

Ong Tho condensed milk products are widely distributed in China. Photo: Vinamilk

In terms of price, the profit margin from export activities is often lower than domestic ones. But Vinamilk accepts this to expand the market and spread the habit of using Vietnamese brands to global buyers.

In terms of service, we do not stop at putting milk cartons on shelves abroad. The international sales team also monitors buyer reactions to adjust products or support partners to develop services for end users.

These formulas may sound quite "basic", anyone can grasp them, but to what extent they are implemented depends on the determination of each team. As for Vinamilk's personality: ready to do difficult things, always try their best in every aspect despite the challenges.

- After the announcement of the brand repositioning, what is the unit's roadmap in the coming time?

- Vinamilk plans to sharpen the existing advantages of a "national" milk brand. The advantages I mentioned are product quality, a distribution system of 230,000 retail points, and a chain of Vinamilk stores (Vietnam's Milk Dream). We have a supply chain of goods including a system of 14 factories and 14 farms across the country.

In the next stage, we will tell new stories, diversify products, expand usage such as using milk to make drinks, cooking, baking, desserts... Recently, the market has positively received Ong Tho condensed milk with flavors (chocolate, strawberry) as a topping for sweet dishes.

In addition, we also anticipate the trend of green living, love of experience and sustainable development of Gen Z to launch products such as Vinamilk Green Farm, Vinamilk Super Nut. These products have recorded impressive growth. Sales of Super Nut 9-nut milk in the third quarter of 2023 increased threefold and Green Farm fresh milk increased twofold compared to the same period in 2022.

There are many milk brands in the Vietnamese market today, both domestic and imported, but Vinamilk has remained the top choice of consumers for over a decade - according to the Kantar Brand Footprint report. That is also the reason why we repositioned the brand - reaffirming the value of a nearly 50-year-old milk company. We have now changed the packaging of all liquid milk lines, and will soon apply it to other product lines, along with optimizing product quality. The new story of quality and quantity will be told in chapters, over the long term.

Our further goal is to be among the top 30 largest dairy companies in the world as well as lead the region in advanced nutritional trends such as clean, green and sustainable food.

Grassland

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