COMPANY OVERVIEW
General introduction
Figure 1: Vinamilk Company(vinamilk.com, 2021)
Vinamilk, officially known as the Vietnam Dairy Products Joint Stock Company, is a leading player in Vietnam's dairy processing industry, commanding 75% of the market share The company boasts a robust domestic distribution network with 183 agents and nearly 94,000 sales points across 64 provinces and cities Vinamilk's products are also exported to various countries, including the United States, France, Canada, Poland, Germany, and several nations in the Middle East and Southeast Asia Over its 30-year history, Vinamilk has established 8 factories and is currently constructing 3 additional ones, offering a diverse portfolio of over 200 products, including pasteurized milk and other dairy items.
Vinamilk is the leading dairy producer in Vietnam in terms of revenue and output In
In 2021, Vinamilk celebrated 45 years of growth, establishing itself as the only Southeast Asian brand to achieve recognition in various global rankings This success stems from a strategic commitment to elevate the Vietnamese dairy brand on the world stage Vinamilk's extensive product portfolio features essential items like liquid and powdered milk, along with value-added offerings such as condensed milk, yogurt, ice cream, and cheese, making it the market leader in product variety, flavors, and packaging options.
1.2 History of formaon and development
Figure 2: History of establishment and development of Vinamilk (vinamilk.com, 2021)
In 1976, when newly established, Vietnam Dairy Products Company (Vinamilk) was named Southern Coffee and Milk Company, under the General Department of Food In
In 1982, the company was renamed Dairy-Coffee-Confectionery Enterprise I, and by 1992, it officially became known as Vietnam Dairy Products Company (Vinamilk) To further penetrate the northern market, Vinamilk established an additional dairy factory in Hanoi in 1994, increasing its total number of factories.
The establishment of four factories is a key strategy aimed at expanding and developing to meet the demands of the North Vietnamese market In 1996, the Binh Dinh Dairy Joint Venture was formed in collaboration with Quy Nhon Frozen Joint Stock Company.
In 2003, the company restructured as Vietnam Dairy Products Joint Stock Company, subsequently acquiring both Vietnam Dairy Products Company and Saigon Dairy Products Joint Stock Company, which led to an increase in registered capital to VND 1.5 trillion.
Category Brand name Product name Products image
- Pasteurized Vinamilk fresh milk contains Bird's Nest.
- Pure natural fresh milk. The first fresh milk in the world to achieve clean label certification from the US. (with sugar, very little sugar.)
- The first 100% Organic pasteurized fresh milk in Vietnam to be certified with European organic standards.
- Vinamilk fresh milk contains bird's nest and pure fresh milk, a premium health gift for the whole
- 100% pasteurized fresh milk increases resistance (sugar, low sugar, no sugar)
- Vinamilk ADM nutritional milk helps children develop brain, height and increase resistance.
- Vinamilk 3 healthy milk bag: Healthy stomach,healthy eyes,healthy bones.Rich in nutrients, large capacity and extremely
- Flex Pasteurized Milk. reasonable price.
- Pasteurized milk rich in calcium, low in fat to prevent osteoporosis Milk for pregnant mothers and babies
- High-class nutritional products, helping to enhance the health of the digestive system & resistance for mothers,
- Nutritional milk for mother and fetus to help mother healthy and smart baby.
- Provide a full range of essential
(blue nutrients to support brain development, help gain weight, height and increase resistance, comprehensive development of the baby.
- All-round development and reasonable price, mother- child development in the long run.
- Specially designed to support children's height development.
- Help children gain weight,grow taller,grow healthy.
- Strengthen the immune system, help the baby gain weight after 3 months.
- For malnourished and stunted children, helping children to increase absorption, increase height and keep up growth momentum.
- Helps to balance the intestinal microflora, strengthen the immune system of children.
- Pedia Kenji strengthen immunity and brain development.
- Support the digestive system and resistance, help gain healthy weight, develop height and brain
- Nutrients are imported from Japan, along with beneficial bacteria to help children digest healthy, grow taller, gain weight after 3 months. Products for the elderly
- Kenko Haru for people with diabetes.
- Helps to keep joints flexible, strong bones, flexible body.
- Helps provide the energy needed every day for the whole family.
- The secret of healthy living of the
Japanese. Helps boost immune system health, improve nutritional status and support health promotion. Weaning food
- Wide variety of sweet and savory flavors.Supplementing with 1 billion
Optimum Gold Weaning Powder is enriched with beneficial bacteria and essential nutrients that support your baby's digestion and nutrient absorption This formula aids in providing an abundant source of nutrients, promoting healthy physical development during your baby's weaning phase.
- With natural fermentation technology combined with calcium to help strengthen bones (with sugar, less sugar, no sugar).
Yogurt - Delicious and healthy yogurt
- With natural fermentation technology combined with calcium to
- Fruit yogurt and aloe vera help strengthen bones (with sugar, less sugar, no sugar)
- Combined with high- quality ingredients: crispy pearls, chewy nuggets, fragrant sticky rice, new flavors, more delicious when enjoying yogurt.
- Yogurt eaten in combination with crunchy aloe vera jelly, or delicious sweet and sour fruits Reveal youthful,vibrant skin.
Drinking yogurt and fruit milk
- Supplement billions of beneficial bacteria, increase resistance, do not worry about minor illnesses in children, support the digestive tract.
- The breakthrough formula helps your baby's eyes to be bright, energetic and healthy.
- New Yomilk with fresh fruit flavors blended with naturally fermented yogurt brings new flavors.
- Rich in nutrients from milk and juice with calcium
& vitamin nutrients to help build strong bones, bright eyes, full of energy and refreshing. Condensed milk
- With nutritional ingredients rich in protein, rich sweet taste, golden consistency.
- This is the most chosen sweetened condensed milk and also the secret to a good cup of milk coffee.
- Condensed creamer with sugar helps smoothies, fruit, yogurt, have a sweet, aromatic flavor Plant milk - Milk with
- Fresh soy milk with nuts
- Made from 9 types of high- quality nuts that are good for the brain, body and skin.
Discover the powerful benefits of our unique blend of non-GMO soybeans and nutrient-rich nuts like red beans, walnuts, and almonds, which provide double the calcium This exceptional combination not only strengthens bones but also enhances flexibility and vitality for adults throughout the day.
- The choice of reliable beverage to help take care of health every day in every meal of the Vietnamese family.
- Twin Cows Premium Ice Cream
- 6 delicious ice cream flavors enjoy the cool ice cream taste.
- 12 flavors of Vinamilk ice cream are suitable when used with friends and family, creating a lively atmosphere when enjoying together.
- Using ingredients selected from leading suppliers, rich in fat from pure fresh milk gives you a cool and passionate feeling.
Sugar - Vietsugar - New premium refined sugar, with 3 no standards: no GMOs, no additives, no preservatives.
- Help your baby grow healthy, rich in calcium and energy to grow taller.
- Famous and long-standing brand in Vietnam.
- Unable to control the source of raw materials
Product of Vinamilk
Category Brand name Product name Products image
- Pasteurized Vinamilk fresh milk contains Bird's Nest.
- Pure natural fresh milk. The first fresh milk in the world to achieve clean label certification from the US. (with sugar, very little sugar.)
- The first 100% Organic pasteurized fresh milk in Vietnam to be certified with European organic standards.
- Vinamilk fresh milk contains bird's nest and pure fresh milk, a premium health gift for the whole
- 100% pasteurized fresh milk increases resistance (sugar, low sugar, no sugar)
- Vinamilk ADM nutritional milk helps children develop brain, height and increase resistance.
- Vinamilk 3 healthy milk bag: Healthy stomach,healthy eyes,healthy bones.Rich in nutrients, large capacity and extremely
- Flex Pasteurized Milk. reasonable price.
- Pasteurized milk rich in calcium, low in fat to prevent osteoporosis Milk for pregnant mothers and babies
- High-class nutritional products, helping to enhance the health of the digestive system & resistance for mothers,
- Nutritional milk for mother and fetus to help mother healthy and smart baby.
- Provide a full range of essential
(blue nutrients to support brain development, help gain weight, height and increase resistance, comprehensive development of the baby.
- All-round development and reasonable price, mother- child development in the long run.
- Specially designed to support children's height development.
- Help children gain weight,grow taller,grow healthy.
- Strengthen the immune system, help the baby gain weight after 3 months.
- For malnourished and stunted children, helping children to increase absorption, increase height and keep up growth momentum.
- Helps to balance the intestinal microflora, strengthen the immune system of children.
- Pedia Kenji strengthen immunity and brain development.
- Support the digestive system and resistance, help gain healthy weight, develop height and brain
- Nutrients are imported from Japan, along with beneficial bacteria to help children digest healthy, grow taller, gain weight after 3 months. Products for the elderly
- Kenko Haru for people with diabetes.
- Helps to keep joints flexible, strong bones, flexible body.
- Helps provide the energy needed every day for the whole family.
- The secret of healthy living of the
Japanese. Helps boost immune system health, improve nutritional status and support health promotion. Weaning food
- Wide variety of sweet and savory flavors.Supplementing with 1 billion
Optimum Gold Weaning Powder is enriched with beneficial bacteria and essential nutrients, designed to support your baby's digestion and nutrient absorption This formula aids in providing a rich source of nutrients, promoting healthy physical development during your baby's crucial eating milestones.
- With natural fermentation technology combined with calcium to help strengthen bones (with sugar, less sugar, no sugar).
Yogurt - Delicious and healthy yogurt
- With natural fermentation technology combined with calcium to
- Fruit yogurt and aloe vera help strengthen bones (with sugar, less sugar, no sugar)
- Combined with high- quality ingredients: crispy pearls, chewy nuggets, fragrant sticky rice, new flavors, more delicious when enjoying yogurt.
- Yogurt eaten in combination with crunchy aloe vera jelly, or delicious sweet and sour fruits Reveal youthful,vibrant skin.
Drinking yogurt and fruit milk
- Supplement billions of beneficial bacteria, increase resistance, do not worry about minor illnesses in children, support the digestive tract.
- The breakthrough formula helps your baby's eyes to be bright, energetic and healthy.
- New Yomilk with fresh fruit flavors blended with naturally fermented yogurt brings new flavors.
- Rich in nutrients from milk and juice with calcium
& vitamin nutrients to help build strong bones, bright eyes, full of energy and refreshing. Condensed milk
- With nutritional ingredients rich in protein, rich sweet taste, golden consistency.
- This is the most chosen sweetened condensed milk and also the secret to a good cup of milk coffee.
- Condensed creamer with sugar helps smoothies, fruit, yogurt, have a sweet, aromatic flavor Plant milk - Milk with
- Fresh soy milk with nuts
- Made from 9 types of high- quality nuts that are good for the brain, body and skin.
This unique blend of non-GMO soybeans and nuts, including red beans, walnuts, and almonds, offers double the calcium to enhance bone strength, providing adults with increased flexibility and vitality throughout the day.
- The choice of reliable beverage to help take care of health every day in every meal of the Vietnamese family.
- Twin Cows Premium Ice Cream
- 6 delicious ice cream flavors enjoy the cool ice cream taste.
- 12 flavors of Vinamilk ice cream are suitable when used with friends and family, creating a lively atmosphere when enjoying together.
- Using ingredients selected from leading suppliers, rich in fat from pure fresh milk gives you a cool and passionate feeling.
Sugar - Vietsugar - New premium refined sugar, with 3 no standards: no GMOs, no additives, no preservatives.
- Help your baby grow healthy, rich in calcium and energy to grow taller.
SWOT Analysis
- Famous and long-standing brand in Vietnam.
- Unable to control the source of raw materials
- The market share of powdered milk is not high.
- Large number of potential customers.
- The demand for milk of
- Customers have a need to consume healthy products.
- The source of raw materials is not stable
- Vietnamese customers tend to prefer imported milk
ANALYSIS OF BUSINESS ENVIRONMENT
Macro Environment (PEST)
Vietnam's stable political and legal environment has fostered economic growth, resulting in job creation and increased worker incomes, which in turn boosts societal consumption demand This positive climate significantly influences the strategic development of Vietnamese companies, particularly in the dairy sector, enhancing market expansion and attracting foreign investment As a result, dairy enterprises benefit from improved income, access to advanced technology, modern production lines, and increased labor productivity However, this growth also intensifies competition with imported foreign products Currently, Vietnam relies on imports for over 70% of its raw milk powder due to insufficient domestic supply and lower import taxes compared to WTO standards.
As economic integration progresses both regionally and globally, the National Assembly is actively enhancing legislation to support a stable political environment and clear legal framework, which are essential for fostering equitable competition among businesses Furthermore, the government's incentive policies promote dairy farming and processing, ensuring a steady supply of raw materials for companies in this sector, while also encouraging consumers to utilize milk for improved health and well-being.
The market is significantly influenced by the economic environment, which encompasses various factors such as the economic growth rate, inflation rate, and income structure Additionally, changes in consumer spending habits and the quality of economic infrastructure, including transportation and postal services, play a crucial role in shaping market dynamics.
In November 2020, Vietnam's estimated per capita income reached approximately 2,750 USD, reflecting a growth of nearly 35.6 USD compared to 2019 This increase, however, is lower than the 144 USD rise seen in 2019 and the nearly 500,000 billion VND increase from 2018 As purchasing power improves, the rising average income is shifting consumer needs and preferences, leading to a greater demand for quality, variety, and ease of use in products, with consumers willing to spend more for these attributes.
In July 2020, the country's consumer price index (CPI) rose by 0.4% from June 2020, while it decreased by 0.17% compared to December 2019 and increased by 3.39% year-over-year, as reported by the General Statistics Office The stability of most dairy prices, coupled with low inflation, enabled consumers to make more purchases and encouraged businesses to increase production.
Economic infrastructure significantly influences market purchasing power Inadequate infrastructure raises production and consumption costs, leading to higher product prices and decreased competitiveness Additionally, slow promotion and distribution services resulting from poor infrastructure hinder product accessibility, making it challenging for consumers to obtain company offerings promptly.
In Vietnam, there is a growing consumption of sweets, canned goods, and dairy products, driven by an increasing demand for health and wellness This trend is fueled by easier access to information through various media, including phones, computers, and television Vinamilk's advertising focuses on promoting a healthy lifestyle and fostering comprehensive physical and intellectual development, positioning itself as a model for dynamic and creative individuals.
One characteristic of Vietnamese people is that they rarely change and often use what they believe in Vinamilk Company can attract loyal customers by creating trust in quality reputation.
As society evolves, the demand for high-quality nutrition tailored to human needs intensifies Milk serves as a convenient and nutritious option, particularly for working adults and students, while powdered milk is commonly consumed by children This growing demand presents an opportunity for the dairy industry to innovate and expand its product offerings, thereby enhancing business scale and market distribution.
The dairy industry faces both opportunities and challenges in developing effective marketing strategies, as technology plays a crucial role in the production process This impact directly influences marketing efforts and product consumption in the marketplace Modern technological advancements have enabled the dairy sector to innovate and create high-quality, well-designed products, allowing companies to strengthen their brands and enhance production efficiency.
The milk production facility utilizes state-of-the-art equipment and advanced technology to produce pasteurized fresh milk, adhering to international standards This factory operates on a fully automated closed production line, ensuring quality from raw materials to final products.
Thanks to the combination of factors: Advanced processing technology, UHT sterilization technology and aseptic filling technology keep the fresh taste for 6 months without preservatives.
The LGV robot exemplifies the integration of automation in production by efficiently transporting finished pallets to the smart warehouse area Additionally, it autonomously delivers packing rolls and materials to the machines, enhancing operational efficiency This advanced robot system is designed to automatically recharge without requiring human intervention, showcasing the future of streamlined manufacturing processes.
The Tetra Plant Master automation solution seamlessly integrates all aspects of a plant, from raw materials to finished products, enabling comprehensive management of factory activities This system facilitates continuous monitoring and quality control, providing essential data that supports ongoing improvements in production and maintenance processes.
Micro Environment
Vinamilk primarily serves two key markets: the consumer market, where individuals and households purchase goods and services, and the agency market, which includes supermarkets and dealers that acquire products for resale at a profit.
The consumer market is witnessing a growing interest in health and nutrition, leading to an increased demand for plant-based milk alternatives like soy, walnut, and almond milk, as well as yogurt and premium organic A2 liquid milk Conversely, the demand for whole milk is on the decline.
In the dealer market, consumer behavior is significantly shaped by retail outlets like supermarkets and nutrition centers Domestic dairy companies and exclusive foreign agents vie for key distribution points, primarily leveraging discounts and reseller commissions This competitive strategy empowers them to sway consumers' purchasing decisions, enhancing their influence over rival businesses.
Vietnam's dairy industry is highly competitive, featuring over 238 companies, with the top five—Vinamilk, Nestle, Nutifood, Frieslandcampina, and TH True Milk—holding 85% of the market share This concentration of market power intensifies competition across product categories and advertising strategies.
Vinamilk faces significant competition from strong industry players like Dutch Lady, TH True Milk, and Nutifood, as well as major global brands such as Nestle, Abbott USA, IDP, Frieslandcampina, and Mead Johnson The robust advertising, research, and product development capabilities of these companies pose a continual threat to Vinamilk's market position.
Powdered milk is currently the most competitive product between domestic and imported products Currently, Vinamilk leads the market with 40.6% (in 2019), followed by Abbott with 17% and Frieslandcampina with 12%.
Over the past three years, Abbott and FrieslandCampina have maintained their market share, while Nutifood is emerging as a significant competitor to Vinamilk in the affordable liquid milk segment Despite foreign companies like Abbott, Mead Johnson, Nestle, and FrieslandCampina dominating the powdered milk market, domestic firms are finding opportunities in the liquid milk sector The industry has experienced a robust average compound annual growth rate of 14.6% over the last year, with a 3% increase noted in 2018 Key players in the liquid milk market include FrieslandCampina, TH True Milk, Nestle, IDP, and Moc Chau.
In 2017, yogurt accounted for approximately 14% of Vinamilk's total revenue and 16% of its gross profit Despite Vinamilk's previous dominance in the yogurt market, competitive pressures have intensified, leading to a decline in its market share from 90% to 84% during the same year.
2012 Frieslandcampina is the second largest player in this segment, accounting for about 8–9% market share.
Vinamilk dairy company uses raw materials from domestic cow farmers, imported materials and raw materials from domestic cow farms.
Vinamilk proudly sources its fresh milk exclusively from its own farms, eliminating reliance on imported raw milk The company imports breeding cows from Australia, the USA, and New Zealand, operating ten farms that are the first in Southeast Asia to meet Global Good Agricultural Practices (G.A.P.) standards In March 2017, Vinamilk's Dalat organic dairy farm became the first in Vietnam to achieve European organic certification from Control Union With a total herd exceeding 120,000 cows, Vinamilk ensures a consistent supply for producing over 3,000,000 glasses of milk daily.
Fonterra, a leading multinational in dairy product trading, supplies high-quality milk powder to Vinamilk, holding one third of the global dairy market Hoogwegt International, a key partner in the milk powder supply chain, supports producers and consumers worldwide with nearly 50 years of industry experience Vinamilk's powdered milk quality is competitive with international suppliers, and the company achieves self-sufficiency in fresh milk using only milk powder Additionally, Vinamilk emphasizes stringent quality control on raw materials to ensure superior product standards.
BUSINESS ACTIVITIES
Business strategy
Vinamilk's Board of Directors has announced that the company's business plan aims to retain its leading position in the Vietnamese market while striving to be recognized among the Top 30 largest dairy companies worldwide by revenue.
Vinamilk highlighted three key pillars that must be put into practice to meet that objective, including:
Vinamilk Milk Company, a leader in the Vietnamese market, offers over 250 diverse products and has a presence in more than 56 countries and territories.
- Brands of liquid milk include ADM GOLD, Flex, and Super SuSu
- SuSu and Probi are brands of yogurt
Dielac, Alpha, and Pedia are specialized milk powders designed for both infants and adults, while products like Grow Plus, Optimum Gold, and Ridielac offer essential nutritional support Additionally, Diecerna is formulated for diabetes management, and other offerings such as Sure Prevent, Calcium Pro, and Mama Gold cater to specific dietary needs, ensuring comprehensive nutrition for various age groups and health conditions.
- Ong Tho and Phuong Nam feature in condensed milk
- Ice cream and cheese brands include Subo yogurt, Delight, Twin Cows, Oze, Ice Cream Kid, and Bow Tie Beef Cheese.
- Vfresh juice, Icy bottled water, and GoldSoy soy milk are all beverages made from soy.
To meet increasing customer demands, Vinamilk offers over 250 distinct product categories, employing strategies for product diversification and multi-branding Key products include high-quality liquid and powdered milk, alongside value-added items such as condensed milk, yogurt (both eating and drinking), cream cheese, and fruit juice All products are nutrient-dense and delicious, ensuring customer satisfaction.
Vinamilk is committed to continuous improvement and innovation, focusing on expanding its product offerings to effectively serve the mid- to high-end market segments Among its popular products are 100% fresh milk, organic fresh milk, pasteurized fresh milk with bird's nest, and the newly introduced Vinamilk Green Farm fresh milk.
Vinamilk is enhancing its strong brand by introducing new product lines and experimenting with packaging and flavors, particularly focusing on its flagship 100% Vinamilk Fresh Milk To meet consumer demands, the company is also offering health-conscious products with reduced sugar and fat content.
Vinamilk has established itself as a market leader by simultaneously increasing the size of dairy cows and enhancing the quality of raw materials, showcasing its ability to take the initiative in raw milk production.
Vinamilk's dairy cows now produce over 1 million liters of milk daily, thanks to a system of 13 expanding farms that implement advanced 4.0 technologies in animal husbandry and management, adhering to international standards like Global G.A.P and European Organic With ongoing development projects and the importation of dairy cows, Vinamilk aims to grow its total dairy herd to approximately 170,000 by 2022-2023.
Vinamilk has enhanced its herd by importing 1,550 purebred HF dairy cows from the US to its Vinamilk Green Farms in Thanh Hoa and Quang Ngai This addition is part of a larger effort to strengthen the eco-farm system and the Vinamilk Lao-Jagro farm complex in Laos, bringing the total number of imported cows to over 2,500.
At the 2022 Global Dairy Conference in France, Vinamilk showcased its Green Farm ecological model, highlighting its commitment to sustainable dairy farming The company has significantly invested in expanding its herd size and increasing milk production, recognizing the growing demand for dairy products in Vietnam and aligning with global trends in the industry.
Vinamilk stands out in the dairy industry through its innovative communication strategy, effectively leveraging advertising to maintain a competitive edge By creating vibrant, humorous, and unique portrayals of dairy cows, the brand successfully captures consumer attention and leaves a lasting impression.
The phrase "100% pure fresh milk" is effectively communicated to consumers through multimedia marketing techniques, enhancing their understanding of the benefits of dairy products This approach fosters a perception among customers that the milk is "fresh, pure, and directly from nature," increasing their trust in the brand.
Vinamilk has adopted a consistent advertising strategy across various mass media platforms, featuring a striking illustration of delicate cows set against a beautiful, vibrant natural landscape The campaign prominently showcases the slogan "Milk 100% fresh and pure," emphasizing the quality and freshness of their product.
Vinamilk has introduced promotions, discounts, and incentives for its members, allowing them to accumulate gift stamps for various rewards, including a 15% discount on powdered milk, a VND 150,000 reduction on purchases, and free carrot pig snacks with milk powder The program has received widespread acclaim for its success Beyond marketing efforts, Vinamilk actively engages in social responsibility through initiatives like "6 Million Glasses of Milk for Poor Children in Vietnam," the "Standing Up Vietnam" Milk Fund, and the "Nurture Vietnamese Young Talents" scholarship On August 5, 2021, Vinamilk supported frontline units in the Ho Chi Minh City Police force by donating 1,000 cartons of milk and 1,000 barrels of drinking water for Covid-19 pandemic prevention efforts.
Vinamilk integrates personal selling into its marketing strategy, emphasizing direct communication between employees and clients to enhance customer care The company focuses on building a skilled sales team equipped with in-depth product knowledge and an understanding of customer psychology Key attributes of this team include professionalism, effective communication skills, enthusiasm, and a willingness to share knowledge and address customer inquiries This approach fosters trust in Vinamilk's products and services, significantly boosting customer purchasing behavior A testament to this strategy's success is Vinamilk Milk Kid, which achieved the highest sales among dairy products for children aged 6 to 12 in December 2007.
Supply chain & distribution
Vinamilk is the top dairy brand in Vietnam, renowned for its diverse product range, including fresh milk, powdered milk, condensed milk, yogurt, ice cream, and cheese The company is also focused on expanding its market by exporting products to various countries, including the United States, France, and Canada To ensure the production and trade of high-quality products that meet international standards, Vinamilk has developed a comprehensive supply chain model.
Figure 3: Vinamilk's supply chain model(chc.com, 2023 )
Vinamilk's supply chain comprises several critical elements, each playing a fundamental role in its operations The company's input consists of two key components essential for its dairy production.
Sourcing of raw materials from abroad
Vinamilk sources its imported materials from countries with advanced agricultural practices, ensuring that safety, hygiene, and product quality adhere to international standards Key suppliers of raw materials include those from Europe, the United States, and New Zealand.
Vinamilk's fresh milk purchasing centers play a crucial role in sourcing raw milk from farmers and dairy farms, aligning with the company's strategic goal of investing in dairy farms This initiative aims to enhance product quality and increase the localization rate of raw materials Currently, Vinamilk sources milk from approximately 150,000 cows, including those from its farms and contracted agricultural households, providing over 1,000 tons of fresh raw milk daily to meet production demands.
Figure 4: Sustainable integrated value chain (bachhoaxanh.com, 2023)
The input supply chain is crucial for producing high-quality products that satisfy consumer demands Vinamilk's primary objective is to establish long-term, sustainable development goals with strategic suppliers both domestically and internationally, ensuring a consistent supply of high-quality raw materials at competitive prices.
Vinamilk stands out as the sole company in Vietnam equipped with advanced spray drying machinery from Niro, a leading brand in industrial drying technology With milk factories located in New Zealand, the USA, and Poland, along with 13 state-of-the-art dairy facilities in Vietnam, Vinamilk showcases its significant production capabilities Among its largest facilities are the Vietnam Dairy Factory, which produces an impressive 800 million liters of liquid milk annually, and the Vietnam Powdered Milk Factory, further solidifying Vinamilk's position in the dairy industry.
Vinamilk operates a highly efficient factory with a production capacity of nearly 54,000 tons per year, utilizing fully automated, closed production lines from input materials to final products Additionally, all of Vinamilk's laboratories hold ISO 17025 certification for both chemistry and biology, ensuring high-quality standards Furthermore, the company's production facilities are equipped with an environmental management system that meets ISO 14001:2004 standards, highlighting Vinamilk's commitment to sustainability.
Figure 5: Vinamilk's factory in Vietnam(sbiz.vn, 2022)
Automated robots designed for delivering finished goods to pallet warehouses can handle up to 27,168 shipments and are built to be earthquake-resistant Equipped with eight advanced storage systems and state-of-the-art loading and unloading machines, this innovative system offers enhanced speed, reduced weight, and improved energy efficiency compared to older models.
Schafer, a German company, has developed an advanced smart warehouse system, which has been adopted by Vinamilk as one of its pioneering customers This innovative system features a directional rail (RGV) pallet handling and conveying mechanism, encompassing 370 meters of rails and 15 dynamic load trays, each designed to carry two pallets efficiently.
The automatic pallet storage system enhances space efficiency and features conveyors that assist workers in loading and unloading It offers automated pallet sorting and traceability, with the sorting system at the loading area automatically dividing pallets for streamlined operations.
16 lanes according to the principle of gravity roller conveyor The whole system is controlled and managed by a core software of SSI Schafer Called Wamas Warehouse Management System.
The integration of automated systems and robotics in the production of Tetra Plant Master and the Wamas warehouse management system has propelled Vinamilk dairy factory to impressive achievements This modernization has established Vinamilk as the leading dairy factory in Vietnam, capable of meeting substantial market demand.
Figure 6: Warehouse & Logistics(fasgroup.vn, 2018)
Growth of points of sale (POS)
Vinamilk boasts an extensive distribution network with over 250,000 sales points across traditional and modern channels, supported by more than 200 exclusive distributors By the end of 2021, the company's online revenue surged threefold compared to the previous year, a growth driven by pandemic trends and years of strategic investment by Vinamilk.
According to the Kantar Worldpanel report, Vinamilk products achieved a remarkable consumption rate of 99% among households in urban areas in 2021, while in rural areas, the consumption rate was approximately 90%.
In Vietnam, an impressive 90% of households utilize at least one product from Vinamilk, with urban areas seeing a staggering 99% usage rate This trend highlights the significant growth in dairy product consumption, particularly in cities, over recent years.
Vinamilk's distribution network has domestic and foreign headquarters, branches and 3 main operating channels: supermarkets, distributors and key accounts.
Supermarket channels that order directly with Vinamilk's branch representatives include big supermarkets: Big C, Metro, and small supermarkets like Five Mart, Citi Mart, Intimex,
The key account channel includes restaurants, hotels, schools, agencies, etc These units also order directly from Vinamilk's branches in large quantities.
Vinamilk relies on a strategic network of over 200 distributors across various provinces and cities in the country, effectively managing the distribution of its products to agents and retailers This traditional channel plays a crucial role in ensuring the accessibility of Vinamilk's goods nationwide.
Revenue
The year 2021 posed significant challenges for businesses worldwide, primarily due to the Covid-19 pandemic, which severely disrupted global supply chains and hindered import and export activities.
Vinamilk faces challenges that simultaneously present an opportunity to showcase its international business strength, achieving a revenue of VND 6,128 billion, reflecting a 10% increase from 2020 Additionally, exports have risen by 9.4%, reaching approximately 45,000 tons.
In the past year, international business efforts successfully launched two new markets in the Americas and Asia, expanding the total export reach to 57 countries and territories, with cumulative export turnover surpassing 2.6 billion USD.
In 2021, the total comprehensive income exceeded 60 trillion dong for the first time, specifically reaching 61,012 billion dong, up 2.2% over the same period and completing 98.2% of the year's plan.
In the latest financial report, domestic net income increased to VND 51,202 billion, reflecting a 0.7% year-on-year growth Additionally, net income from direct exports rose significantly to VND 6,128 billion, marking a 10.2% YoY increase Furthermore, net income from foreign branches outside the country reached VND 3,589 billion, representing an 11% growth compared to the previous year.
Profit after tax of MCM reached VND 2,926 billion, up 3.6% over the same period last year and completing 95% of the year's plan.
Profit margin and cost structure analysis:
In 2021, the total comprehensive income of MCM surpassed 60 trillion dong for the first time, reaching 61,012 billion dong, marking a 2.2% increase year-on-year and achieving 98.2% of the annual target Domestic net income was 51,202 billion dong, up 0.7% YoY, while net income from direct exports rose to 6,128 billion dong, an increase of 10.2% YoY Additionally, foreign branches contributed a net income of 3,589 billion dong, reflecting an 11% year-on-year growth Profit after tax reached 2,926 billion dong, up 3.6% from the previous year, completing 95% of the annual plan However, Vinamilk's consolidated gross profit margin decreased to 43.1%, down 326 basis points compared to the same period last year.
In 2021, the consolidated profit after tax reached 10,633 billion dong, achieving 94.6% of the annual target, with earnings per share of 4,517 dong and a net profit margin of 17.4% MCM reported a profit after tax of 319 billion dong, marking a 13.7% increase from the previous year and fulfilling 100% of its annual plan, resulting in earnings per share of 2,891 dong and a net profit margin of 10.9%, up 96 basis points year-on-year Consolidated selling and general administrative expenses accounted for 23.8% of net revenue, reflecting a significant optimization of operating expenses compared to 25.8% last year, effectively adapting to the prolonged market challenges posed by the epidemic while ensuring revenue growth.
By the end of 2022, Vinamilk is projected to sustain a consolidated revenue exceeding 60 trillion dong, matching the previous year's figures and achieving 94% of its annual plan Consequently, the company is expected to report a consolidated pre-tax profit of VND 10,496 billion, fulfilling 88% of its yearly target.
In 2022, Vinamilk achieved consolidated net sales of VND 50,704 billion and a gross profit of VND 20,556 billion Despite encountering short-term challenges due to macroeconomic conditions, the company is proactively implementing sustainable distribution strategies from Q2 to Q4, laying the groundwork for medium and long-term growth.
In 2022, the GiacmosuaViet store chain is expected to achieve significant growth, with revenues increasing by over 20% due to the launch of nearly 40 new stores Additionally, special customer channels are projected to see a revenue rise of more than 10%, fueled by the recovery in the tourism and service industries.
Vinamilk's e-commerce channel experienced remarkable growth, exceeding 30% in the past year By December 31, 2022, the company’s distribution network expanded to over 230,000 points nationwide, featuring nearly 650 GiacmosuaViet stores across Vietnam.
The plant milk industry, though relatively small, continues to experience robust double-digit growth Notably, the super nut product line, introduced in 2022, has rapidly emerged as a pivotal offering within this sector.
Profit after tax of Moc Chau Dairy Cow Breeding Joint Stock Company reached VND 3,133 billion, up 7.1% over the same period, mainly thanks to:
- Develop effective traditional channels, and
- Expanding the system of self-owned stores, by the end of 2022, the revenue will increase by over 50%, there are nearly 60 points of sale.
Net sales in foreign markets reached VND 9,252 billion, of which foreign branches reached VND 4,424 billion, exports reached VND 4,828 billion Gross profit in foreign markets reached VND 3,342 billion.
Foreign branches are the driving force for Vinamilk's international business growth in
In 2022, Driftwood anticipates a revenue growth exceeding 30%, driven by the diversification of distribution channels, despite schools not yet recovering to pre-epidemic levels The company has also successfully introduced several Vinamilk products to the US market Meanwhile, Angkormilk achieved over 10% revenue growth through new product development and expanded distribution The joint venture's offerings, including liquid milk, drinking yogurt, and milk tea, have demonstrated a high rate of return customers, indicating significant growth potential.
BUIDING A SALES PLAN
Build sales goals
4.1.1 Base for building goals a Overview market situation
The global milk and dairy products market is expected to grow at an annual rate of 2.5% from 2019 to 2024, according to the EMR report Despite facing various challenges, the dairy processing sector maintains an optimistic outlook due to consistently increasing consumer demand.
Milk is a crucial component of the human food chain and significantly impacts dietary trends across various food categories The increasing global demand for milk is driving growth in the dairy industry, as more consumers in developed countries are shifting towards healthier eating habits, leading to a resurgence in the popularity of dairy products like butter, yogurt, and cheese.
The anticipated increase in dairy product consumption in developing nations is driven by rising incomes, population growth, and the influence of global diets Additionally, improvements in the efficiency and stability of milk production are further propelling the growth of the dairy processing sector in these regions.
However, it is anticipated that emerging economies would continue to have significantly lower per capita milk and dairy product consumption than industrialized ones.
In emerging economies such as India and Pakistan, there is a higher consumption of fresh dairy products, while wealthier nations tend to prefer processed dairy options In developed countries, the majority of milk is transformed into products like cheese, butter, skim milk powder (SMP), and whole milk powder (WMP).
Asia is the largest dairy market in the world, significantly impacting global dairy trends Within this region, China, India, and Pakistan are the top players, with India and Pakistan driving the growth in milk production Meanwhile, the United States is recovering from a prolonged drought that previously hindered its milk output.
A recent Rabobank study predicts that the global dairy market will remain stable over the next six months, driven by strong demand that may offset limited supply Starting in early 2020, milk production from the world's top seven dairy exporting countries—namely the US, EU, New Zealand, Australia, Brazil, Argentina, and Uruguay—is expected to increase by 0.8%.
Unsweetened dairy products are expected to significantly drive the growth of the dairy market in the coming years, as over 5% of the US population, 10% in Europe, and 90% in China do not consume sweetened milk The rising popularity of sugar-free dairy options is largely attributed to the perception of these products as healthier choices among consumers.
Figure 8: Milk consumption of Asian countries in 2020
In 2020, Vietnam's dairy export turnover reached $302.7 million, marking a 10.5% increase from 2019, as reported by the Ministry of Industry and Trade The positive growth in Vietnam's dairy exports is attributed to significant investments in advanced equipment and technology by businesses, leading to many farms meeting GlobalGAP, VietGAP, and organic standards This progress has enhanced production quality, food safety, and product diversification, allowing deeper access into both domestic and international milk and dairy markets Despite the challenges posed by the pandemic, companies like Vinamilk and Vinasoy maintained regular exports to major markets, including China, the Middle East, Korea, and Japan, offering a diverse range of products such as yogurt, condensed milk, nut milk, and organic milk Notably, Vinamilk secured a $20 million dairy contract for the Middle East and successfully exported nut milk and milk tea to Korea, while Vinasoy's products were featured on leading online sales platforms and in numerous supermarkets across China.
Figure 9: Milk consumption growth(vndirect.com.vn, 2020) b Actual resources of enterprises
In the post-COVID economy and shifting global geopolitics, Vinamilk continues to navigate uncertainties effectively, maintaining its leadership in business rankings and excelling in various industries A recent recruitment survey highlights the dedication and commitment of the company's leadership team.
Vinamilk not only provides effective business strategies but also fosters an advanced working environment The company is committed to building and developing a dedicated team of employees who are highly engaged with the organization, all while striving towards sustainable shared values.
At Vinamilk, human resource strategy is considered as one of the important pillars for the company to achieve great success in the past and firmly step into the future.
Ms Bui Thi Huong, CEO of Vinamilk, emphasized that dedicated and talented staff are crucial for the company's sustainable development She highlighted the importance of a robust human resource policy and competitive compensation, along with a focus on developing and nurturing financial talents.
Vinamilk's key strategy for ensuring high-quality human resources and cultivating a strong successor team aligns with its new development goals, as highlighted by Ms Bui Thi Huong.
In the wake of the COVID-19 pandemic, businesses have recognized the crucial importance of adaptability and innovation to thrive in an ever-changing environment Emphasizing internal transformation is essential for sustainable development in today's context.
Vinamilk, a prominent dairy enterprise, recognizes the necessity of adapting to the swift changes in the economy and evolving consumer awareness and needs, viewing this evolution as an essential progression for every business.
The company aims to enhance its working environment and equip its workforce for the ongoing transformation towards sustainable development.
Sales excution
Recruitment a Standard of sales management
- Preferred majors in Economics, Business Administration, Marketing, Commerce
- At least 02 - 03 years of working experience in a similar position in large-scale companies in the FMCG industry;
- Having knowledge and experience in managing business activities related to supermarkets/chain of convenience stores; especially purchasing department, purchasing department
- Knowledge of management of brands and categories at supermarkets/convenience store chains.
- Communication, negotiation, negotiation and presentation skills.
- Skilled in building and developing cooperative relationships with customers and partners.
- Under high work pressure and overtime. b Standard of sales staff
Degree: Graduated from high school
- Priority is given to those who have experience in FMCG sales, sales staff of brands: Nutifood, TH True Milk, ;
- Male, Female, agile; Agility, hard work, good communication;
Graduated from high school or higher;
- Basic operations on computers, POS machines for sales and payment;
Total salary: 7,000,000 - 8,000,000 VND (Basic salary + sales achieved).
Bonuses during the year: 3-4 months salary/year:
- Performance bonus: 2-3 months salary/year (according to the business situation of the Company);
- Other bonuses in the year: Tet gifts, March 8 gifts, Mid-Autumn Festival, International Children's Day, Employee commendation for having children who are good students,
We offer open monthly training sessions that focus on product introduction, teambuilding, and case study analysis to enhance soft skills for sales professionals Additionally, we provide free sales skills classes with expert supervision At the end of each week, sales managers will meet with their teams to identify weaknesses and establish goals for the upcoming week.
Probationary work with 100% official salary;
Full labor contract after 2 months of probation;
Social insurance, health insurance, unemployment insurance, full after 2 months of probation;
4.2.2 Giac mo sua Viet – Vinamilk
Vinamilk, a prominent player in Vietnam's fast-moving consumer goods (FMCG) sector, has expanded its reach by establishing e-commerce channels alongside its extensive network of introduction and sale stores, supermarkets, and retail locations.
Vinamilk eShop offers a variety of products including milk powder, nutrition powder, condensed milk, liquid milk, yogurt, beverages, ice cream, and cheese, all adhering to high-quality standards Customers can easily access detailed nutritional information and choose from convenient payment methods such as cash on delivery or online credit and debit card payments.
Same-day delivery is available for orders placed before 10 AM, while orders confirmed after that time will be delivered within 24 hours Customers can enjoy free delivery on purchases of 300,000 VND or more This service is currently offered to users in the inner districts of Ho Chi Minh City.
The company aims to innovate and improve customer convenience while expanding its market share and maintaining its leadership in the dairy sector Customers can easily visit the Dream Dream Vietnamese Milk website at any time to order their preferred products, which will be delivered directly to their location, as stated by the company leader.
In October, customers shopping on the Vinamilk eShop can enjoy a range of special incentives, including discounts like 5% off, buy one get one free offers, and attractive freebies available at the Product Introduction Store system Additionally, the Dream Dairy Vietnam website enhances the shopping experience by including presents with every order.
Vinamilk will eventually roll up online sales channels across all of the country's provinces and cities after Ho Chi Minh City.
In the second quarter, consolidated financial accounts revealed net sales of VND 12,449 billion, reflecting an 18.6% increase compared to the same period last year Vinamilk's sales surged to VND 22,782 billion, also marking an 18.6% growth over six months, while profit after taxes rose by 33% to reach VND 4,972.6 billion.
The company aims to achieve VND 44,560 billion in revenue and VND 8,266 billion in profit after tax for the year After the first six months, it has successfully reached 51% of its revenue target and 60% of its profit goal.
Figure 14: Vinamilk's Gia Mo sua Viet store chain (vinamilk.com, 2021)
4.3 Supporng markeng acvies
Vinamilk has been recognized as the leading brand in the dairy sector for the 10th consecutive year, according to the Brand Footprint Report 2021 This remarkable achievement highlights the strong affection and trust that Vietnamese consumers have for Vinamilk products in their everyday lives.
Vietnamese consumers prioritize the ease of consumption when choosing milk, making it a key selling point While milk is essential for a healthy diet, trust in high-quality products is crucial, particularly for higher-income individuals Quality and health concerns significantly impact companies' ability to expand their customer base.
Vinamilk releases their low-sugar nut milk products, Vinamilk Super Nut 9.
Vinamilk Super Nut Milk is a nutritious beverage made from nine premium nuts, including imported walnuts and almonds from the US, along with high-fiber nuts With 94% nut milk, it is rich in Omega-3 fatty acids, fiber, and essential vitamins that support brain, body, and skin health.
Table 3: Swot Analysis of nut milk market
The combination of 9 types of nuts with a grain content of over 94% will be full of essential nutrients for the body.
Nut milk is an excellent choice for vegans, individuals avoiding dairy and animal products, and those with allergies to animal milk, offering a rich source of essential nutrients.
Nutrients: Nut milk can be rich in fiber, protein, unsaturated fats, vitamins and minerals For example, almond milk is rich
Allergies: Although nut milk is less allergenic than animal milk, some people may be allergic.
Nut milk should be stored in cool, fresh conditions to prevent rapid spoilage, which can complicate storage and transportation, particularly during travel or when refrigeration is unavailable Additionally, nut milk is rich in fiber, vitamin E, and unsaturated fats, making it a nutritious choice.
Soy milk provides protein and calcium, while rye milk is rich in fiber, B vitamins and antioxidants.
The global nut milk market has been growing rapidly in recent years.
Vietnam also has the number of consumers wanting to use nut milk up to 66%.
There are many distribution channels across the country that are easy to find and buy products.
There are too many big competitors in the country.
Nut milk products will be more expensive than cow's milk products, so the choice to buy is limited.
4.3.3 Objectives of supporting marketing activities
The global nut milk market is projected to reach VND 34 billion by 2024, reflecting a growing trend worldwide In Vietnam, 66% of consumers express a desire to incorporate nut milk into their diets Despite facing competition from larger corporations, Vinamilk is experiencing a relatively rapid growth rate in the nut milk sector.
As consumers increasingly favor natural foods, concerns about product quality arise due to the overwhelming variety of nut milk options available Each individual's unique health needs drive the demand for convenient nut milk products that provide essential nutrients, making the selection of a nutritious option more challenging than ever.