Strategy to lead the market of Vietnam's 'fresh milk millionaire'

Origin and price are among the factors that influence consumers' decisions when choosing to buy fresh milk.

Continue to lead in the "hot" segment: fresh milk

According to the latest market research results of Nielsen Vietnam, Vinamilk 100% Fresh Milk products continue to maintain the leading position in this segment in terms of both output and sales for 12 consecutive months (from March 2018 to February 2019). In addition, other products in the fresh milk industry of this brand such as 100% Organic Fresh Milk, 100% A2 Fresh Milk... are also considered pioneers in the dairy industry in Vietnam.
From a consumer perspective, when asked about the results of this market research, Ms. Thanh Mai (Binh Thanh District, Ho Chi Minh City) said: “In my opinion, the mentality of “preferring foreign milk” has changed a lot in recent years. Having small children at home, my family uses a lot of dairy products, especially fresh milk. In my opinion, because they are produced domestically, they often have new production dates, fresh flavors and affordable prices. Vinamilk has a large distribution system, including online, so you can buy them almost anywhere, anytime. They also have high-end products such as organic or A2 milk, so I don’t have to search for them as hard as before!”

High-tech dairy farming is the key to helping Vinamilk build a competitive advantage over competitors in the market.

One million liters of fresh milk per day

In recent articles on the milk market, economic experts have analyzed that Vinamilk maintains its leading position, especially in the fresh milk segment, thanks to its strategy of developing both international-standard fresh milk raw material areas and increasing production capacity. Vinamilk's internal strength and competitiveness lie in its international-standard fresh milk raw material areas.
According to Vinamilk's latest report, this "dairy giant" owns a system of 12 international standard farms and has linked up with dairy farmers to develop a herd of approximately 130,000 dairy cows, producing approximately 1 million liters of raw milk per day, equivalent to producing about 5.5 million cartons of fresh milk per day (180 ml cartons). It can be seen that this is the strategic lever and also the key competitive advantage that helps Vinamilk surpass other competitors in the fresh milk segment.

The giant fresh milk tank system at Vinamilk's super liquid milk factory in Binh Duong with a capacity of 800 million liters/year.

Not only expanding its scale, Vinamilk continuously improves the quality of domestic raw materials, through the application of international standards in dairy management and farming. Specifically, out of the company's 12 farms, 10 farms meet Global GAP standards, with all cows imported from Australia, the US, New Zealand and 2 farms follow European organic standards. Vinamilk currently owns the largest Global GAP dairy farm system in Asia in terms of number of farms.

Another special point in Vinamilk's raw material development strategy is that instead of concentrating in one locality, the company invests in a system of farms spread across the country, connecting to a system of 13 factories. This will require the company to invest more in managing and operating the entire system, but in return, it helps the company ensure that the source of fresh raw milk from the farms is transported to the factories as quickly as possible. Thanks to that, the milk retains its delicious taste and nutrients.

Vinamilk's newly inaugurated Tay Ninh dairy "resort" has a scale of 685 hectares, 8,000 cows and calves with a total initial investment of up to 1,200 billion VND.

Invest to maintain competitive advantage

Although currently possessing a relatively solid foundation, Vinamilk's leaders said that the raw material area will still be a strategic lever, a key competitive advantage to help Vinamilk overcome other competitors in the fresh milk segment. Since the beginning of 2019, this dairy enterprise has shown a series of their investments in fresh milk raw material areas such as large-scale dairy "Resorts" in Tay Ninh (scale of 8,000 cows), applying the 4.0 revolution comprehensively, importing cows to existing farms, investing in dairy farm projects in Can Tho, Quang Ngai and expanding investment to Laos to build organic dairy farms with a scale of up to 5,000 hectares.

Vinamilk's 100% fresh milk production line.

In parallel with the development of fresh milk materials, Vinamilk's factory system has also increased its capacity and expanded its scale accordingly. In 2018, Vinamilk completed phase 2 of the super liquid milk factory in Binh Duong with a super large capacity of 800 million liters/year. "Factories in the Central and Northern regions such as Da Nang and Tien Son have also been expanded to meet the demand for these areas...", Vinamilk representative added.

Obviously, having a comprehensive investment strategy from input materials, modern production technology, plus an effective distribution and marketing system has helped Vietnamese milk brands compete, even lead in the market share race with strong competitors and, importantly, gain the trust of consumers.