How Vitasoy Creates Global Growth With Sustainable Practices

With me today here we have Lydia, Head of Group Marketing for Vitasoy. Would you like to introduce yourself first? Hi, good afternoon, everyone. It's my pleasure to be here today and to share about Vitasoy success story as a very iconic Hong Kong brand, homegrown and bred Hong Kong brand that goes globally right now. I personally have been a marketer for over ten years. I started with P&G, I've been with Tencent, and now I've been really focusing my career to work on sustainability and purpose driven companies. So thank you for having me. Thank you and thank you, Lydia. I think there's no one who doesn't know about this brand and I'm sure, like a lot of us actually grow up together with this brand so would you want to maybe talk a little bit about your brand? Okay. Just a show of hands. I really am interested in knowing whether there are anyone who haven't heard about Vitasoy. I will make it my personal work to treat you each and every SKU and product we have in the company. Okay. Where are you from? Okay we have more work to do in Germany, but a little bit of introduction of our company. We started in Hong Kong in 1940s during wartime. So our founder who has passed away, he really started the company because he wants to provide affordable, high protein, nutritious products to people in Hong Kong. Back then, people still delivered our products via bicycle, door-to-door but now we've expanded to a B2B mainly business model. And we have built on his purpose to champion sustainability movement across the globe by providing nutritious, tasty, and sustainable products across the world. And I think what I'm going to share more today is really about how a traditional family business embraces modernity on all fronts. For example, there are a lot of firsts that Vitasoy brought into Hong Kong especially. So our most famous or popular drinks as in paper box with Tetra Pak. So that is actually the first brand that we brought the solution into Hong Kong using ultra high temperature sterilization. We are also the first non-fizzy soft drinks in Hong Kong as well. So I hope if you haven't tried our products, I'll make sure I send you some. And if there's any interest in understanding our products, we have a wide portfolio. So our products as well as tea products. I'm really happy to share more about our products with the audience. Yeah, I'm sure that Vitasoy has already created a very strong brand image in everyone's mind which also has a very strong foundation on how it was built. So with this, our markable success as being a local Hong Kong brand, how do you compete with today's highly competitive market and how do you differentiate yourself with all these newcomers beverage brands? I think one of the edge is inherently because of the heritage of the company. Our heritage, our history is naturally Hong Kong's heritage as well. So given the history of the brand, we have built credibility, trust, warmth, and also familiarity. So I think this also gives us an edge when we try to market and advertise our products. And then second of all, I'm only actually with the company for around six months. One of the things that I am most impressed with would be how they put ESG or sustainability at the heart of the business. Our CEO always in all the meetings and discussions, when we look at the PNL, he would say, "Okay, let's do something that is sustainable" because he always wants to drive growth, not short term growth, but really sustainable growth, but not at the expense of the long term growth. So I think this is something that I, myself and also a lot of my colleagues take pride of, it's about sustainability. And this has become a core purpose and our core work. So not only really being compliant to what the Hong Kong Stock Exchange asked us to do in the guidelines, but really more than that and brainstorming in terms of energy resources, the supplier we use, the packaging we use, how can we become more sustainable and help our Earth move towards that direction? So I think some figures I also feel very impressed with when I was at the onboarding session is how best-in-class Vitasoy demonstrated in the sustainability aspect. So for example, in the 2023 Corporate Knights Index, we actually the top 100 company in terms of sustainable revenue and also sustainable investment, not only corporate Knights but Hang Seng Index and also Dow Jones Index and many more. These notable organizations that talk about sustainability. We are climbing up the chart despite being top of the chart already. So I think that is definitely concerted effort of the whole company to drive that towards the direction. Yeah. Thank you. I really love the direction of being sustainability because I think nowadays with all the younger generations, they all care about the environment and also like how to give back to the society. So looking at a brand with such a long history and also moving towards that direction, it's definitely creating an impact for other marketers to look up to. Yeah, I think a lot of the audience today here is from Hong Kong or from Mainland and also definitely Germany as well. I also want to share maybe a few cases that is outside of Hong Kong that we are doing, I think, amazing work. So, for example, we have a very sizable business in Australia. We have our own warehouse and factory where we source and produce locally as well. So some products that you might not be familiar of, for example, yogurt or latte, we produce them in Australia. And we are doing some very interesting initiatives with organizations like the Mulloon Institute, where we enable customers to drive sustainability with us. So if they buy one litre of our products, we will rehydrate one meter of the land because hydration is definitely a problem in Australia and we are trying to work on that together with organizations. And also I think having young people employed in Australia is currently one of the major problems there as well. So we work with one of the top notch baristas in Australia, setting up a barista academy to train young unemployed Aussies because according to figures, actually 25% of young Aussies are likely to be unemployed versus the other generations of Aussies. So we spend resources to train them, become baristas, and help them to look for jobs and definitely at the same time promote our products because we have baristas, soy milk or plant milk as well. So with such a wide range of products and also these strategies on sustainability. So what role does the marketing play in to make sure that this message is going out to the audience? I think definitely as marketers we work with our other functions, so for example, our R&D (research and development) team. We work very closely. We have an upstream innovation marketing team that we look at trends and also sustainability guidelines and best in class cases to see how we can move our products from packaging to formula to be even not only compliant, but even over the standard of ESG. So ESG actually comprises not only about recycling, but when it comes to formula, how we can be more healthy, lower sugar level. That is also one direction. So actually, I was at Chinese University yesterday at the Korea fair. So a lot of young people came to me and when I offered them a low sugar version of Vitasoy or our lemon tea, they refused. They said, "Can I have the high sugar version?" So even though our hero products are these high sugar version, but we are really trying to gradually lower the sugar level content and offer other options and solutions to encourage consumers to live a more healthy lifestyle. So I think definitely that is one of the work our marketers are currently doing. And also for packaging, we are moving from plastic straws to paper straws as well. And also how to make the whole products, the packaging from bottle caps to the bottle body to become like 100% sustainable and recyclable. I see. So similarly to Emarsys, I think we are always thinking on how we can think from the customer perspective and also innovating your products to make sure that we are up to the tastes and standards. So apart from that, I know that you also touch base in like different channels and also like going to see use. How are you using different channels or touchpoints to engage with your customers at the moment? So primarily Vitasoy is a B2B business because we don't have our own stores, so we sell our products alongside supermarkets or e-commerce platforms. So I think one of the touch points or strategies I would say maybe is the zero moment or first moment of truth. I think the reason why our consumers keep coming back is because of the product quality. So definitely that is something we consistently work on. And on the other hand, on how we can innovate our product portfolio to fit the trend of, for example, health and wellness. So we do offer a lot of no sugar, cold brew tea or even we tap into new segments recently. In the past we do not have carbonated drinks. So to drive growth and to really draw in new customers, we have currently our own sparkling tea as well and this is doing really well. And also fresh products like we have fresh tea and tofu and also soy milk that you have to put in the fridge. So I think having the right products is the essential and first step. And then touch points, definitely we have to equip ourselves with the latest marketing knowledge. So, for example, not only traditional media, but on how the media split has been moved across, for example, from TV to more OOH nowadays in Hong Kong, or even try new solutions. I think everybody is trying AI at the moment, how can it uplift the efficiency of our marketers work as well, as well as deliver more quality work that can communicate with the consumers better? But with the touch points are you also collecting data that helps you to improve your product development? Right now we don't really have a structured CRM system, but we do collect first party data via our website and do simple like retargeting on our databases for campaigns. Then in the future, maybe you could consider; once you collect a bit more first party data like we have discussed during lunch, I think like with the brands where you're relying a lot on distributors, on selling, it's also important to hear back from the customers on first hand basis on their comments, and that will definitely help you to continue improving their products. And once again, you just touched on about AI as well. So I think everybody is looking into how to enhance their business efficiency with the help of AI so is Vitasoy for doing anything on this part? Right now, I think the majority of AI solution we use focuses on generative AI, so Midjourney or Chat GPT, I think these would not be a stranger to everyone who is sitting here today. I think the core focus is how can we leverage these tools to do better storytelling when we work on our annual reports, the visuals or our social media or even doing social listening, how to leverage AIs to give better suggestions on how we can target our audience or segmentation better. I think these are definitely very useful tools, but at the end I think we always remind ourselves to go back to our brand equity because we are a genuine brand so how can we strike a balance between leveraging these new shiny digital tools but also always being true to our brand? I think that would be the million dollar question. Yes, I totally agree with you. I think there is also some input that cannot be replaced from a human being perspective and also at Emarsys, we are also working on having Chat GPT on making our life easier, on providing, like you said, segmentations and recommendations, data analysis to help our customers or our marketers when they use Emarsys, it helps them to identify where the opportunities are. Yes, definitely. Even my boss is trying to use Chat GPT to write a more polite or formal email on how to turn down a lot of requests or invitations from a lot of agencies nowadays. But definitely Emarsys is not one that we are using that solution to. We are definitely exploring on how we can partner with Emarsys better and I think this is the beginning of the journey. Yeah. Thank you very much. Shall we open some questions for the floor? At FMCG company it's very difficult to do CRM kind of things. But as you know, Yili and Mengniu in China actually did a lot of successful digitalization of the channel, their customer data. Have your company ever done anything connecting the whole channels from the factory to distributor to retailers and users? How do you position the value of the consumer data to your company? Can you identify the KOC key of any consumers for you? I think because our product portfolio is quite complicated, so we have different kinds of strengths and the target audience of each drink is quite different as well. So we do have an internal product strategy for portfolio to identify the right target audience. When we do our day-to-day, not only for CRM but also for marketing campaigns as well. Just now you mentioned definitely Mainland China is doing very well in terms of CRM. I'm comparing to maybe Hong Kong on most of the brands we see right now. But I do think one of the drivers is having a very different ecosystem in China versus the rest of the world. So there's a very seamless ecosystem, maybe using WeChat mini programs to deliver similar results, when we have apps in Hong Kong, which the acquisition cost is quite high. So at the moment, we don't really have such a mechanism in place connecting from factories to end-to-end when these products arrived at the consumers ends. But we are working on something that connects sustainability with purchase. So right now we have a prototype of a CRM system that encourages consumers to buy our products, recycle, and then we will provide rebate to these customers. And alongside our vending machines present in Hong Kong, I think we are going to drive more and work on how we can perfect and also refine the system in the future.