January 2024

Dr. Chi Hieu Nguyen

CASE STUDY1

Sustainability At Vinamilk

Overview
Established in 1976, Vietnam Dairy Products Joint Stock Company (Vinamilk) has been leading
Vietnamese domestic market, especially in the domestic liquid milk segment. With a long-standing
history and a proud legacy of one of the very few strong national brands, Vinamilk has gone on
to conquer the global map of the dairy industry, landing among the Top 40 largest dairy companies
globally in terms of revenue (by Plimsoll Statistics, UK) while getting ranked as No. 6 among the
Top 10 most valuable milk brands globally (by Brand Finance) with a brand value of 2.8 billion US
dollars in 2022 (See Appendix 1).
Its vision is to become a world grade brand in food and beverage industry, where people put all
their trust in nutrient and health products. Its mission is to deliver valuable nutrition to community
with respect, love, and responsibility. After nearly half a century, Vinamilk has recently launched
a brand campaign with a new strategic positioning that instantly went viral and marked a major
milestone of transformation. The brand identity embodies the "bold, determined, always being
yourself" personality of Vinamilk and the youthful energy packed with desires of Vietnamese.
Figure 1
Change in its logo as part of the transformative brand campaign

1 This case is written for use in Round 1 of Vietnam Business Innovation Challenge 2024. The author
gratefully acknowledges the support of Vinamilk and its team for providing materials, discussions, and
feedback throughout the process of case writing. Any individual or institution that wants to use this case
must obtain an approval in advance. This case is not intended for any commercial use.
Vietnamese Products of International Quality Standards Vị thế của sản phẩm Vinamilk trên thị trường và các
thành tựu đạt được
Vinamilk owns a diverse product portfolio with over 250 SKUs including powdered milk, nutritional
liquid milk, condensed milk, ice-cream, cheese, yogurt, beverage… Its products have claimed
prestigious global awards. Vinamilk’s dairy products are the first ones in Vietnam to be rated three
stars in taste at the Superior Taste Award (Michelin of the Food Industry). At the World Dairy
Innovation Awards 2023, Vinamilk’s Super Nut, a plant-based milk alternative, won the Best Dairy
Alternative Award. In the same year, Vinamilk became the first company in Asia to win the US
Purity Award for its optimal gold infant power.
Figure 2
A diverse product portfolio with international quality and reasonable price

To deliver international quality standards on purity and food safety, Vinamilk products must
undergo a rigorous process to ensure compliance with 400 criteria. Since its first exports in 1997,
Vinamilk products have been researched and developed in strict accordance with international
standards and successfully tapped into even the most selective markets, such as US, Canada,
New Zealand, Japan, South Korea, and Singapore. In addition, 100% Green Farm and Organic
fresh milk products of Vinamilk have been certified by Clean Label Project (CLP)–a US-based
non-profit organization conducting product tests and evaluations with a series of strict criteria on
residues of heavy metals, microplastics, as well as other harmful chemicals in products, which
can affect consumers' health.

Post-Covid Industry Trends Xu hướng hành vi người tiêu dùng

Since Q2/2022, amidst an estimated rise of Vietnam’s GDP by 8.02%, the domestic consumer
goods and services segment witnessed a much stronger growth of nearly 20% compared to the
previous year. In 2022, the FMCG industry had a good 2-digit recovery after two consecutive
years of negative growth at -7% (2020) and -5% (2021), while the dairy industry also recovered
at a single digit rate, also after two years of negative growth.
In 2022, five major consumer trends hit the dairy industry. First, with an increased inclination of
consumers choosing to relocate from urban to rural areas in conjunction with continuous massive
job cuts in industrial zones, the dairy industry witnessed a growing proportion of rural
consumption. Second, despite similar interests in nutritional drinks, different age categories
prioritized different criteria in selection. While Generation X preferred products promoting health
and resistance, Generation Y went for detoxing and skin beautification, and Generation Z leaned
towards products that would improve digestion and physique.
The other three key trends were seen in distribution, sales, and marketing channels. While
traditional distribution channels recovered after years of stagnancy amidst no further growth of
modern channels, sales channels witnessed the rise of both multi-channel shopping and online
platforms, expanding both in urban and rural areas. In response to such fundamental shifts, digital
channels started blossoming and called for more personalized content for each consumer group.

Vinamilk Towards Sustainability

Over the past few years, with an impressive development in domestic markets and expansion to
international markets, Vinamilk has been increasingly aware of its influences on society and its
social responsibilities (See Appendix 2). Therefore, Vinamilk has become more focused on
creating a connection between business targets and social responsibilities, leveraging
sustainable development principles to guide its operation. With a firm commitment to creating
sustainable values for all stakeholders (See Appendix 3), Vinamilk's sustainable development
focuses on the following five points:

Environment & Responsibility

Energy for Products

Community
Responsibility
Development
for Employees
Support

Local
Economic
Development
Building Core Competency towards Sustainability
Known as the "Brand for the Community,” Vinamilk has been a pioneer in sustainable
development with three pillars–Product, People, Nature (See Appendix 4), becoming the first dairy
enterprise in Vietnam to participate in Pathways to Dairy Net Zero (a global initiative of the Dairy
Industry on Net Zero) and the first in Asia to deliver a program to assess and identify sustainability
aspects at Vinamilk and in Vietnamese dairy industry in general.
Vinamilk's system of 15 farms is built in an environmentally friendly manner, in line with a
sustainable business development strategy, including Vinamilk eco-farms (Green Farm) in Tay
Ninh, Quang Ngai, Thanh Hoa provinces and Vietnam's first European-standard organic farm in
Da Lat. Vinamilk's factories are built and equipped with advanced automation technology to meet
international quality standards, such as FDA, Organic EU, HACCP and Halal. With such
investments, Vinamilk has become the first business to have dairy factories and farms achieve
carbon neutrality according to PAS2060:2014 standards.

Sustainability Performance in 2022

In 2022, the global economy witnessed many events and factors that severely affected social
security, food security and energy worldwide, thereby further highlighting the roles and
responsibilities of food manufacturers. Throughout its history of growth, Vinamilk believes that
even the most volatile and challenging periods present huge opportunities for breakthrough and
improvement, emphasizing the need for responsible business operations and quality products.
Besides a good growth momentum out of 2022 and into 2023, in terms of sustainability
performance (See Appendix 5), Vinamilk has successfully launched the Vinamilk Green Farm
system, focusing on four key aspects: Regenerative Agriculture; Circular Economy; Animal
Welfare and Renewable Energy, proudly delivering products from green agricultural practices and
green production in alignment with international quality standards.
Such results are made possible due to Vinamilk’s persistent investment with a long-term mindset
in sustainable development solutions during recent years. In 2022, Vinamilk pioneered in
greenhouse gas inventory under ISO 14064 for factory and farm systems; successfully adopted
44 circular economy initiatives; promoted green energy consumption in production; installed solar
energy systems on 100% of its farms; increased investment in environmentally friendly
technologies, diversified initiatives to use sustainable resources, biodiversity, and tree planting to
neutralize greenhouse gases.
Besides, Vinamilk has developed a range of social responsibility and community engagement
programs, including a series of community health care activities for the elderly, awareness
campaigns of environmental protection among school students, donations of 40.6 million glasses
of milk to nearly 500,000 children in 63 provinces and cities. With its tireless efforts in investment
in sustainability initiatives and social responsibilities, Vinamilk has proudly received the First-class
Independence Medal from the Party and State for enterprises with outstanding contributions to
national development.
Vinamilk has defined sustainable development as the foundation for its development strategy for
the period of 2022-2026, including: promoting sustainable development path based on successful
models of the global dairy industry; applying science and technology in agriculture and production
towards sustainability; increasing renewable energy, aiming to achieve net zero emissions by
2050.

Current Challenges
Challenge 1. Promotion of Waste Management Practices
With an aim to pursue both economic growth and environmental conservation, Vinamilk aims to
transform its operational model from a linear economy to a circular economy, ensuring optimal
consumption of resources, minimizing, and eventually eliminating all wastes that can potentially
pollute the environment. Therefore, Vinamilk has put relentless efforts into improving the level of
reusing and recycling waste from product design stage to distribution and consumption stages
(See Appendix 6). Vinamilk is aware that its corporate responsibility, besides strictly complying
with legal regulations on waste management, must include long-term initiatives, instead of one-
off campaigns, to raise systemic awareness and promote sustainable practices of waste
management among its consumers, including retailers, schools, households, and individuals.
Challenge 2. Promotion of Sustainable Consumption Habits
With a wide range of products that offer international quality standards at affordable prices,
Vinamilk has always embraced its mission to deliver valuable nutrition to community with respect,
love, and responsibility. While the company is proud to see its products continuously enhance the
physical and intellectual capacity of Vietnamese people over the years, it has also become aware
of how sales and marketing practices of retailers as well as habits of over-purchases and
overconsumption of consumers can, albeit not intentionally, exacerbate the problem of food
waste. With its commitment to transparent communication as well as honest and responsible
marketing, while still aiming for economic growth, Vinamilk also aspires to promote sustainable
consumption habits among the public in the long run.

Requirements
Your team must prepare a slide deck of maximum 20 slides and a video presentation of maximum
10 minutes to propose solutions for the two challenges aforementioned. Slides or video
presentations that exceed the corresponding limit will be penalized. Both slides and video
presentation must be in English, and all team members must speak, with roughly equal time for
each, in the video presentation, otherwise the team will face point deduction. Vinamilk is a public
company, so you are free to use any other information or data available besides what has been
provided in the case.
 Appendix 1
Vinamilk’s 2022 Highlights

Source: Vinamilk Annual Report 2022

 Appendix 2
Vinamilk’s Sustainability Journey

Source: Vinamilk Sustainable Development Report 2022

 Appendix 3
Vinamilk’s Commitment to Stakeholders

• Provide the best and safest products.

• Diversify products and create new product
Consumers values to improve and increase human health.
• Provide products with reasonable price.

• Ensure a safe and sustainably profitable

Shareholders investment.

• Comply with the State policies and regulations

State in the operating fields

• Create satisfaction in safe working conditions,

Employees personal development and competitive income.

• Collaborate and develop on the basis of

Suppliers common benefit, transparency, and social
responsibility

• Be responsible, share values and jointly develop

Community community

Source: Vinamilk Sustainable Development Report 2022

 Appendix 4
Sustainability Pillars

Source: Vinamilk Sustainable Development Report 2022

 Appendix 5
Vinamilk’s Sustainable Development Activities in 2022 in line with
United Nation’s 17 Sustainable Development Goals
Source: Vinamilk Sustainable Development Report 2022
 Appendix 6
Waste Management at Vinamilk

Source: Vinamilk Sustainable Development Report 2022