Ong Tho Condensed Milk and its 40-Year Journey

(Baonghean.vn) - Cans of Ong Tho condensed milk, once a luxury item for well-off families, are now available in every region of the country and appear in many countries around the world as a daily necessity for every family...

In early July 2016, Vinamilk's wholly owned Driftwood Dairy Plant in the US introduced condensed milk and creamer at the Fancy Food Show. This is one of the largest food trade shows in the US, attracting thousands of reputable food processing and manufacturing companies from many countries.

After the trade fair, these products were put on sale in supermarkets in Arizona and California. Entering the US market is not easy. Condensed milk and creamer produced in Vietnam must meet quality and food safety standards for the food industry in general and the dairy industry in particular, and must be recognized and licensed for import by the FDA and USDA.

Previously, Vinamilk's condensed milk products were exported to Japan, Canada, South Korea, the Middle East, ASEAN, Africa, etc., under the brand names Ông Thọ, Bestcows, Angle, Captain, Driftwood, Southern Star, etc., accounting for 34% of the company's export volume in 2015.

Ms. Mai Kieu Lien, General Director of Vinamilk, acknowledges that the company's current position is the "sweet fruit" of persistently building the Ong Tho condensed milk brand over 40 years. The company currently owns 13 factories in Vietnam, and 3 factories in the US, New Zealand, and Cambodia. Of these, 4 factories in Vietnam and one factory in Cambodia produce condensed milk products with a total capacity of over 300 million cans per year, meeting both domestic and export demands.

Vinamilk's Angkor Milk factory in Cambodia produced its first batch of condensed milk on its inauguration day.

"During that period, condensed milk was considered a luxury item due to its scarcity and high price. Cans of condensed milk were distributed according to standards, and even though many cans reached consumers with yellowed packaging, they were still highly coveted. Only the sick, young children, and the elderly could afford a cup of condensed milk to improve their health," recalled Ms. Mai Kieu Lien. The journey of condensed milk began after liberation, when Vinamilk took over three factories in the South: Thong Nhat, Truong Tho, and Dielac. The economy faced many difficulties, the equipment and technology were outdated, and there was no foreign currency to import raw materials, so the businesses were completely passive in production. The factories only ran at less than 1/20 of their capacity, producing only a few thousand cans of condensed milk each month.

To overcome difficulties, Vinamilk's leadership proactively formed joint ventures and partnerships with import-export businesses that held strong foreign currency reserves, especially Seaprodex. Simultaneously, the company launched the Ông Thọ condensed milk brand. This was a premium product line sold at Cosevina and Imexco stores for on-site export to generate foreign currency for raw material imports. As a result, from an initial capital of a few hundred million dong, the company increased its equity to 20 billion dong in 1987, boosting production and exceeding revenue targets.

The success that had just been achieved was suddenly lost in the early 1990s. Due to the economic embargo, Vinamilk could not import spare parts for production, resulting in a lack of raw materials. Engineers and workers overcame the difficulties together by designing their own embossed image of the God of Longevity, creatively manufacturing molds for milk can lids, and utilizing war scrap such as tank wrecks and artillery barrels.

"We are 'blind' to information about world market prices, while our raw materials are entirely imported, with no exchange with the outside world, and we are passive in terms of access to foreign currency. How can we reduce the purchase price, and thus reduce the product price? That's a difficult problem," Ms. Lien said.

According to research by Kantar Worldpanel, Ông Thọ and Ngôi Sao Phương Nam are the two most popular condensed milk brands among consumers nationwide.

On the other hand, Vinamilk has planned to develop a domestic dairy farm system to gradually become self-sufficient in raw materials. Since the 1990s, Vinamilk has researched and signed contracts with local countries to directly purchase raw materials such as milk powder and butter oil, at prices several hundred USD cheaper per ton than importing through import-export companies. As a result, product costs have decreased, making it competitive with imported goods.

After the economic embargo was lifted, Vinamilk entered a new phase of development. The company imported modern machinery to boost production and improve quality, meeting the growing domestic demand. The model of partnering with farmers expanded the livestock farming area, while simultaneously establishing its own dairy farms from North to South, helping the total herd increase from 3,000 cows in 1991 to over 120,000 in 2016, producing 200,000 tons of milk annually.

"This was a crucial turning point. Thanks to it, Vinamilk proactively secured its milk raw material supply for production. The strategy of combining modernizing machinery and equipment, using world-leading advanced technology, and securing raw material sources from 1991-2003 helped the company capture up to 75% of the condensed milk market share," Ms. Lien recounted.

After its equitization in 2003, Ong Tho condensed milk remained Vinamilk's flagship product, consistently ranking among the top high-quality Vietnamese products. To keep pace with changing consumer tastes, the company expanded its product portfolio, improved packaging and quality, and diversified its product range to suit various needs.

In the domestic market, many condensed milk products have emerged, such as Ong Tho white with quick-open lid, Ong Tho red, Ong Tho with blue lettering, and Southern Star in green, red, orange, and blue. When exported, Vinamilk's condensed milk products also go by various names such as Bestcows, Angle, Captain, Driftwood, etc.

Vinamilk's condensed milk products come in a variety of packaging options, including tin cans, paper cartons, and plastic blister packs.

Packaging options are also diverse in type and volume, including 380g tin cans, one-liter paper cartons, and 40g disposable plastic blister packs. The can design has shifted from a standard shape to ribbed cans, reducing the thickness of the tin and making stacking easier. Labels on the tin cans have been improved from ordinary paper labels to high-quality glossy paper labels, creating a luxurious and attractive look.

"Over 40 years, Vinamilk condensed milk in general, and Ong Tho condensed milk in particular, has become familiar and beloved by Vietnamese consumers through the image of a hot cup of coffee with milk every morning, or the delicious taste of flan, the image of childhood eating bread dipped in condensed milk, and the refreshing yogurt made at home by housewives. This is also a product included in the nutritional supplement regimen for many workers nationwide," Ms. Lien shared.

It is estimated that of the more than 300 million cans of milk produced this year, approximately 34% will be for export.

PV