CONTINUES TO EXCEL IN EXPORT
Export has helped Vinamilk become one of the few businesses that have successfully “reversed the trend” when the general situation faced many difficulties. In 2023, the “big guy” in the dairy industry announced that its net revenue from exports 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 Q4/2023 alone, net export revenue surged by 19.3% compared to the same period in 2022.
Looking back, it can be said that 2023 was an exciting year for Vinamilk when it started with contracts signed at the Gulfoods Dubai expo for the Middle East market. Following that were China, Japan, South Korea, etc., with a series of consecutive trade promotion activities from this enterprise. In Q3/2023, the highlight was the signing of a memorandum of understanding for cooperation with two leading businesses in the field of importing, distributing milk and agricultural products in China.
Without sharing specific figures, a representative of Vinamilk said that export growth in the first quarter of this year is still at a positive level. At the end of Q1/2024, Vinamilk also completed a large order of more than 300 containers of infant formula and nutritional powder for export 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, when the global economy recovers, consumer demand in Vinamilk’s major export markets (Southeast Asia, Middle East) will rebound, especially as the Middle East market increasingly favors Vinamilk’s milk.
EXPLOITING STRENGTHS FOR GROWTH
Currently, the driving force behind Vinamilk’s export revenue growth still comes from key and major markets such as the Middle East, Japan, South Korea, China, Southeast Asia, etc.
For example, for the Middle East, export revenue in this market has nearly doubled over the past 10 years and there is still much room for development. After many years of dominating the market in the imported infant formula segment, Vinamilk has expanded its product portfolio here to 50 SKUs, with many products being R&D specifically for this market in the high-end segment such as specialized milk powder, adult milk powder, nutritional powder, etc. Recently, Vinamilk and its partners have promoted the healthcare channel for specialized product lines and e-commerce, experimenting with new forms such as livestream sales, etc. to better reach customers.
Meanwhile, in the Asian market, revenue from condensed milk, fresh milk, and yogurt products also grew positively as Vinamilk products became increasingly popular with consumers. Positive signals from China, after the signing of the cooperation agreement, the first batch of Vinamilk’s durian-flavored yogurt was put on shelves in China in the final month of 2023.
Before that, Ong Tho condensed milk – Vinamilk’s flagship product in the billion-dollar market – had just officially appeared in a large supermarket chain in Guangzhou.
POTENTIAL STILL ABOUNDS
Although milk is not yet a major export item for Vietnam, there is still room for businesses to exploit, given the rapidly changing consumer trends around the world. Vinamilk is also stepping up its market share expansion activities in high-income markets in Asia and some potential new markets such as Central and South America, and the Caribbean region.
KBSV also said that developed markets are embracing Vinamilk’s products due to its production capacity, consistent quality, and meeting ESG (Environmental, Social, Governance) standards. For example, in the Australian market – an area that has set up “green barriers” in imports – products supplied by Vinamilk use HDPE packaging (easily recyclable packaging) and do not have plastic straws, with easier-to-open lids to reduce plastic waste in the environment. Therefore, the product has been present in major supermarket chains such as Costco, Woolworths, Coles, Aldi, Foodstuff, etc., with sales growth of over 10%/year.
The system of farms and factories located throughout the country, including units that meet the “green” standards or certifications for carbon neutrality, etc., is being leveraged by Vinamilk as a competitive advantage when exporting, in anticipation of the trend of shifting production of major countries to Vietnam.
Along with the efforts from businesses, the FTAs that Vietnam has signed continue to be a lever to help Vietnamese export products gain broader access to potential markets.
With over 25 years of experience in exporting milk, Vinamilk’s products are now present in more than 60 countries including the USA, Japan, South Korea, Singapore, New Zealand, Australia, China, and all Southeast Asian countries with a total accumulated export turnover of over USD 3.2 billion.
