Demand for plant-based milks takes Vitasoy to new export markets

17 November 2021

There was a time when plant-based products were only found in health food stores. Now they’re lining the shelves and freezers of supermarkets everywhere, thanks to the increasing number of health and environmentally conscious consumers turning to plant-based diets.

Vitasoy Australia is in prime position to capitalise on the demand for plant-based milks. The company has already seen sales increase by 10–15% a year since 2019. It is now investing $40 million over the next 5 years in its manufacturing facility in Wodonga, Victoria. The investment will double capacity to meet growth for the next 10 years. It will create 35–40 jobs in the local community.

Vitasoy is also working with Austrade with the ambition to expand its exports from 5% to 20% of business. Austrade’s in-market knowledge has helped the company begin its foray into the Middle East. Vitasoy has appointed a distributor in Saudi Arabia and has more markets in the pipeline.

‘Austrade has been a great partner,’ says Ivy Oh, Vitasoy’s Global Brand Development Manager. ‘We leaned on their local teams for market insights and to facilitate introductions to distributors. They are a trusted source and wonderful to have on our side.’

Demand for plant-based milks lead to increased sales

Vitasoy originated out of Hong Kong in 1940. The company entered Australia through a joint venture with National Foods in 1996. Five years later, the two companies invested in a manufacturing facility in Wodonga. Today the facility processes, makes and ships 60 million litres of plant-based milk each year. Vitasoy has invested more than $25 million over the last 5 years to increase the facility’s capacity and capabilities.

In Australia, the market for plant-based milks has been growing by double digits every year in recent times. Around 40% of households are buying plant-based milks, up from 30% five years ago. Vitasoy’s sales have reflected the growing preference for alternative milks.

‘Our sales have grown 10–15% each year since 2019,’ says David Tyack, Vitasoy’s Managing Director. ‘We expect the same growth in 2021. We don’t see it slowing down for the next few years.’

Vitasoy

Exports to drive future business growth

Vitasoy exports to China, Hong Kong and Singapore through its sister companies. While exports are not currently a major part of its operations, the global demand for plant-based milks has offered an opportunity to expand into new markets. It would also allow the company to de-risk its reliance on the local market.

‘People overseas were reaching out to us, wanting to import our products,’ says Tyack. ‘It prompted us to think “what is possible? What could we do? Where can we go?” We’d like to see exports grow from 5% of our business to 20%.’

In 2019, Ivy Oh came on board to lead Vitasoy’s export strategy. The company identified Asia and the Middle East as its focus markets.

‘The demand for plant-based milks is especially strong in these regions,’ says Oh. ‘Consumers are looking for healthy beverages that are produced safely and sustainably using high-quality ingredients. We fit the bill perfectly.’

Unexpected success in Saudi Arabia

Vitasoy’s first step into the Middle East came from a Saudi Arabian distributor who had seen Vitasoy’s products at a trade event.

Vitasoy turned to Austrade for market insights and information on the distributor and its network. ‘We really leaned on Austrade’s team in Saudi Arabia for their in-market knowledge and expertise,’ says Oh. ‘They were fantastic and gave an extra level of assurance.’

Oh was pleased to find the distributor – World Premium Products (WPP) – met its selection criteria.

‘WPP has extensive experience importing other Australian brands,’ she says. ‘This assured us that they understood Australian brands and our stories. They also had the network coverage to effectively reach our target consumers. Finally, they had the team structure and resources to bring our brand to market.’

Vitasoy signed a contract with World Premium Products (WPP) in May 2021. The company shipped a container of its plant-based milks a month later. The products are now available in 40 stores across Riyadh, Saudi Arabia. Distribution will expand to a further 60 stores by the end of 2021.

‘We’re really pleased to be in Saudi Arabia,’ says Oh. ‘WPP showcased our products at the largest HORECA trade event in Saudi Arabia. We received very positive feedback from potential customers, which is exciting. We are optimistic that Saudi Arabia will be the ideal base for us to expand across the region.’

Vitasoy is also working with Austrade to explore markets in North Asia and Southeast Asia.

Sales growth benefits Australian farmers

Vitasoy’s success has flow-on benefits for the Australian farmers that supply raw ingredients. Its almonds come from the Riverina, Sunraysia, Riverland and Northern Adelaide Plains. Soybeans come from the Riverina region and northern NSW, southeast Queensland and far north Queensland. Rice is sourced from the Riverina region. Oats come from western NSW and Western Australia.

‘We’re proud to source almost all our ingredients from Aussie growers,’ says Tyack. ‘Our growers are our partners. We help them improve water use and better manage their soil. We offer longer-term contracts to give them more certainty so they can invest in their crops.’

Tyack is proud of Vitasoy’s focus on sustainability. ‘We encourage sustainable farming practices wherever possible. For example, we’ve engaged sugar cane farmers in Queensland to plant soybeans after they harvest their crop. This regenerates the soil for their next sugar cane crop. We want to tread lightly on the environment.’

Vitasoy also works to reduce electricity, gas and water use at its facility. It is also looking to switch to fully recyclable packaging.

Creating jobs and security for the Wodonga community

Vitasoy is celebrating 20 years in Wodonga in 2021. It has provided jobs for many members of the community in that time. It currently employs around 75 people.

‘We’re not only providing long-term jobs,’ says Tyack. ‘We’re giving people the opportunity to turn their job into a career.’

Vitasoy is an active member of the community. It donated funds to help the Baranduda CFA buy infra-red cameras for firefighting. It gave free coffees to frontline COVID-19 workers as part of International Coffee Day. It sponsors community events and provides free coffee at Auskick games.

To celebrate its 20-year anniversary, Vitasoy partnered with radio station Triple M to give away $20,000 to the community. It asked listeners to nominate a ‘hero’ to receive $1,000, with one recipient every week for 20 weeks.

In February 2022, Vitasoy will host a dinner to celebrate the community’s contributions to its success. The guests of honour will include 5 staff who have been with Vitasoy since 1996.

‘We love the region and its people, and we’ll be here for a long time,’ says Tyack.

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