Continuing to Be Highly Appreciated for Exports
The export sector has helped Vinamilk become one of the few enterprises that have successfully “reversed the trend” in the face of many difficulties. In 2023, the “big player” in the dairy industry announced that its net revenue from export activities reached over VND 5,000 billion, an increase of 4.4% compared to the previous year, helping Vinamilk’s net revenue increase by 0.7% to VND 60.369 billion. In the fourth quarter of 2023 alone, net export revenue surged strongly with a growth rate of 19.3% compared to the same period in 2022.
In retrospect, it can be said that 2023 was a busy year for Vinamilk, starting with contracts signed at the large Gulfoods Dubai exhibition for the Middle East market. This was followed by China, Japan, South Korea, etc., with a series of continuous trade promotion activities by the company. In the third quarter of 2023, the highlight was the signing of a memorandum of understanding with two leading companies in the import and distribution of dairy and agricultural products in China.
Vinamilk has been continuously present at many major international trade fairs in key markets such as Dubai, China, etc.
Without sharing specific figures, a Vinamilk representative said that export growth in the first quarter of this year remained positive. At the end of the first quarter of 2024, Vinamilk also completed a large order of over 300 containers of infant formula and nutritional powder to be exported to the Middle East.
Many brokerage firms predict that export activities will become a bright spot for Vinamilk this year. KB Securities (KBSV) forecasts that in 2024, as the global economy recovers, consumer demand in Vinamilk’s major export markets (Southeast Asia, Middle East) will increase again, especially in the Middle East market, which is increasingly fond of Vinamilk’s milk..
Exploiting Strengths for Growth
Currently, the growth driver for Vinamilk’s export revenue still comes from key and core markets such as the Middle East, Japan, South Korea, China, Southeast Asia, etc.
For example, in the Middle East, export revenue for this market has nearly doubled in the past ten years, and there is still plenty of room for development. After many years of dominating this market for imported infant formula, Vinamilk has expanded its product portfolio there to 50 SKUs, with many products developed specifically for this high-end market, such as specialized formula, adult milk powder, and nutritional powder. Recently, Vinamilk and its partner have been strengthening the medical channel for specialty products and e-commerce, and testing new forms such as livestreaming to better reach customers.
A solid manufacturing platform, flexible product development capabilities, and dedicated services are the “three pillars” for Vinamilk’s export sector.
Meanwhile, in the Asian market, revenue from condensed milk, fresh milk, and yogurt is also growing positively, as Vinamilk products are increasingly favored by consumers. Positive signals from China, after the signing of the cooperation agreement, Vinamilk’s first durian-flavored yogurt shipment arrived on store shelves in China in the last month of 2023. Earlier, Ông Thọ condensed milk – Vinamilk’s leading product in this billion-dollar market – was also officially available at a major supermarket chain in Guangzhou.
Vinamilk’s durian yogurt exported to the Chinese market.
Potential Remains Abundant
Although milk is not yet a strong export commodity for Vietnam, with the rapid changes in global consumer trends, there is still plenty of room for businesses to exploit. Vinamilk is also stepping up efforts to expand its market share in high-income markets in Asia and some potential new markets such as Central & South America and the Caribbean.
According to KBSV, developed markets are also embracing Vinamilk’s products thanks to the company’s production capacity, consistent quality, and ability to meet ESG (Environmental, Social, Governance) standards. For example, in the Australian market – a region that has set up “green barriers” in imports – Vinamilk’s products use HDPE packaging (easy-to-recycle packaging) and do not have plastic straws, making the lids easier to open to reduce plastic waste in the environment. As a result, the products are available in major supermarket chains such as Costco, Woolworths, Coles, Aldi, and Foodstuff, with sales growth of over 10% per year.
The system of farms and factories across the country, including units that meet “green” standards or have Carbon Neutral certifications, is being utilized by Vinamilk as a competitive advantage in exports, and in anticipation of the trend of major countries shifting production to Vietnam.
Many new products have been added to Vinamilk’s export portfolio to meet the demands of new markets such as Australia and New Zealand.
Alongside the efforts of businesses, the FTAs that Vietnam has signed continue to serve as a lever to help Vietnamese export products reach potential markets more broadly.
With over 25 years of experience in dairy exports, today Vinamilk’s products are present in over 60 countries such as the US, Japan, South Korea, Singapore, New Zealand, Australia, China, and all Southeast Asian countries, with total cumulative export turnover exceeding USD 3.2 billion.
