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Vinamilk shares experience in exploring powdered milk market

By Ngoc Diem   November 4, 2022 | 07:30 pm PT
Dielac powdered milk has changed the habit of Vietnamese consumers who used to prefer foreign goods by well addressing the nutritional needs of children.

Nguyen Quang Tri, Vinamilk's executive director of marketing, brought the success story of Dielac powdered milk to the 6th Global Dairy Congress Asia 2022, taking place on October 27-28 in Singapore.

Vietnam's dairy industry has an estimated net worth of nearly $6 billion, led by Vinamilk for decades. Dielac - a popular mass formula brand for children has contributed significantly to the development journey of the dairy giant.

In the 33 years since the production of the first batch, Dielac has consistently led the market, despite stiff competition from many foreign and domestic brands. The company focuses on three criteria to win consumers' hearts: quality, innovation, and love.

Nguyen Quang Tri, Vinamilks marketing executive director, speaks at the 6th Global Dairy Congress Asia 2022 that took place on October 27-28 in Singapore. Photo by Ngoc Thanh

Nguyen Quang Tri, Vinamilk's marketing executive director, speaks at the 6th Global Dairy Congress Asia 2022 that took place on October 27-28 in Singapore. Photo by Ngoc Thanh

The main point of Dielac's story is its attempt to satisfy consumers' needs.

According to Tri, Vietnamese people are inherently not confident about domestically produced products and tend to be more appreciative toward imported brands which leads them to pay a premium price.

Even in the low-income group, buyers always assume that higher price dairy products signal higher quality due to the mentality that cheaper products are not good.

On the other hand, there is competition between dairy companies in adding ingredients with a variety of benefits, from physical to mental growth.

Dielac recognized the challenging competition while positioning itself as a low-cost domestic brand in a market that was becoming more upscale. To establish its position, the company addressed consumers’ fundamental demand: nutrition for children.

The founders have always had a goal in mind: infant formula should contain ingredients and nutrients that are as close to breast milk as possible.

To create a product that is appropriate for the physical needs and specialized nutritional needs of Vietnamese children, Vinamilk cooperates with international organizations that specialize in micronutrients and microbiology.

Over three decades, Vinamilk has faced many challenges.

The most notable milestone was in 1976 when Vinamilk took over old, "good for nothing" factories with outdated equipment that required full repair and reassembling.

At that time, Vietnam was also lack of a dairy sector that left Vinamilk no choice but to maximize internal capabilities for production

In 2009, the company collaborated with the National Institute of Nutrition (NIN) to conduct a large-scale clinical study with 50,000 children, proving the quality of Dielac products.

Another research conducted by Vinamilk that year revealed that 96% of Dielac consumers were satisfied with the milk quality.

Vinamilk international standard factory system helps to leverage the company’s competitiveness. Photo by Vinamilk

Vinamilk international standard factory system helps to leverage the company’s competitiveness. Photo by Vinamilk

In 2022, the company continued to affirm its position in providing parents with a long-term nutritional solution to support their children's growth and development.

Dielac has adopted new modern technology in production, applying advanced formulas in its products to fairly compete with imported brands.

The manufacturer is keen on innovating and upgrading product quality, developing new brands, and expanding the categories to meet consumers’ demands, as well as providing diverse solutions for children’s nutritional needs.

Taking advantage of its farms, factories, and across-the-country supply chain system, Vinamilk is able to price its products to be affordable for consumers from different backgrounds.

These strategies have contributed significantly to the formation of "Dielac brand love" and made the milk brand trusted by generations. Babies who were fed with Dielac milk in 1989 now continue to provide the younger generations with the same beloved products.

According to Mai Kieu Lien, Vinamilk's general director, "the affection towards the brand is nurtured by the enthusiasm of the development team."

Dielac is built upon three key factors: the love of a mother - providing the child's basic needs; the heart of a Vietnamese - wanting to contribute to reducing children's malnutrition rate and enhancing their physical and intellectual conditions, and the entrepreneur's enthusiasm - building the dairy industry as advanced as in other developed countries.

The Global Dairy Congress Asia 2022 attracted more than 250 participants, and more than 30 speakers from organizations, and dairy enterprises of more than 10 Asian countries.

The program had five discussion sessions focused on the latest trends in the dairy industry, new business models, advanced technologies and equipment as well as applicability in the industry value chain (farm management, milk processing, product innovation, and so on).

The event also offered an opportunity to explore the dairy market's prospects in Asia. Vinamilk was the only Vietnamese dairy company invited to present at the Congress

Caroline Emond, Director General of the International Dairy Federation (IDF), said she was inspired by Dielac's 33 years of journey.

Caroline Emond expresses her interest in Vinamilk’s sharing at the congress. Photo by Ngoc Thanh

Caroline Emond expresses her interest in Vinamilk’s sharing at the congress. Photo by Ngoc Thanh

According to the IDF representative, after recognizing its main challenge, Vinamilk has found a way to tackle it and deliver what customers want and build a strong organization from there.

Caroline stressed the significance of the approach in enhancing consumers' affection for a brand. Only when convinced by the product's value, the strong reputation and trustworthiness of brand, they will make the buying decision.

The global dairy industry is experiencing rapid growth due to the rising population, increasing nutritional needs, and higher average income.

With a population of more than 4.5 billion, emerging Asia plays a significant role in global milk production and consumption, according to experts at the conference.

In 2021, Asia led in production with 33% of the global number. The amount of milk produced last year, which was 749 billion kilograms, will see a marginal rise this year as a result of socioeconomic development, healthy lifestyle initiatives, consumer health concerns, and changes in daily diet.

According to Euromonitor International, the dairy market in Vietnam would grow by 12.8% from 2023 to 2025. The high-end market will continue to expand since this group has not been much affected by the pandemic in term of income, hence their consumption habit remains the same as before.

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