Vinamilk ramps up R&D to win big globally

By May May    September 12, 2021 | 11:00 pm PT
The Vietnam Dairy Products JSC is stepping up R&D to create innovative products enriched with local flavors to satisfy the diverse range of global tastes.

With its strategic investment in product development, international expansion, and commitment to sustainability, Vinamilk has become the only Vietnamese dairy company in the top 50 global dairy producers. This year it is ranked 36th.

Vinamilk's R&D efforts have developed customized products tailored to the Asian, African and Middle Eastern markets despite the challenges of limited research data in some of these regions.

Starting with only one infant cereal SKU, the company has since successfully developed and established 66 SKUs in multiple markets. One of Vinamilk's successful innovative products is the Ridielac infant cereal with banana and date flavors.

Vinamilks innovative products enriched with local flavours. Photo by: Vinamilk

Vinamilk's innovative products are enriched with local flavors. Photo by Vinamilk

Launched in the Middle East five years ago, this infant cereal with a distinctive local flavor has been well received, and it underpinned the subsequent penetration into North Africa.

The dairy giant has also fortified its African products with vitamin A and minerals to help tackle the challenge of vitamin A deficiency. This problem threatens 42.4 percent of sub-Saharan African children with an increased risk of mortality.

In the Middle East, which accounts for 80 percent of Vinamilk's export revenues, the company's localized Ridielac is a favorite among locals, especially for the variety in flavors that enables people to switch their babies' daily diet regularly.

In Asia, Vinamilk has introduced sweetened condensed coconut milk in Japan to address the demand for plant-based milk amid local consumers' dairy allergy.

"Our long-term relationship with Vinamilk was built upon accurate and flexible export services and high-quality products meeting all Japanese standards," Jun Hamada, Vinamilk's Japanese partner, said.

"We found the newly developed Condensed Coconut Milk impressive and have very high expectations that it will perform well in this market."

Sustaining business strategy

Vinamilk's overseas success has been significantly contributed by a solid R&D team of highly qualified personnel with deep knowledge on food regulations in the export markets, and continuous investment in global cooperation.

Together with partners, including domestic and international nutrition research institutes, Vinamilk provides nutrition that best suits the local market.

Vinamilks R&D department contributes significantly to the success of exported products. Photo by: Vinamilk

Its R&D department plays a major role in the success of Vinamilk's exports. Photo by Vinamilk

Since 1998 Vinamilk has seen significant expansion in its export markets and export of product categories and SKUs. The overseas business currently accounts for 15 percent of its total revenues.

With its business strategy and sustainable focus, Vinamilk grew steadily in the first half of 2021 despite the challenges brought by Covid-19, achieving exports of VND2,772 billion ($121.5 million), up 13.1 percent year-on-year. Until now, Vinamilk products has presented in 56 markets all over the world.

Significant investment for global expansion

Vinamilks Export Business Overview. Photo by: Vinamilk

Vinamilk's export business overview. Graphics by Vinamilk

Vinamilk aims to further expand its global reach by entering more international markets. It has announced a joint venture with Del Monte, a leading producer and distributor of F&B products in the Philippines. The strategy is to invest extensively in the dairy industry and offer Philippine consumers healthy dairy and beverage products that suit their palates at reasonable prices.

The joint venture's products are expected to reach consumers in September 2021.

Vinamilk has three factories in the U.S., New Zealand, and Cambodia and a dairy farm in Laos. The first constructional phase of the farm complex, which has a capacity of 8,000 heads of cows that produces approximately 44,000 tons of milk a year, is expected to be completed in the first quarter of 2022.

In addition to maintaining stable production and business, Vinamilk has expanding brand "foot-print" globally. According to Brand Finance report of the global food and beverage industry 2021, Vinamilk has been recognized as the only representative of ASEAN in Top 10 Most Valuable Dairy Brand and Top 5 Strongest Food Brand with brand value of USD 2.4 billion

Founded in 1976, Vinamilk currently has 16 factories and 13 farms in Vietnam and abroad. The company possesses strong R&D competencies with highly skilled human resources and well-equipped, modern laboratories with VILAS - ISO/IEC 17025 certification.

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