HK beverage giant Vitasoy has withstood the test of time some 80 years after its founding. Chief Executive Roberto Guidetti says his mission is to remain loyal to the roots of a global success story. He talks to Edith Lu.

If you were asked on the streets in your youth what's your favorite drink in winter, your good ole response would probably be: a glass bottle of warm soy milk from Vitasoy.

It's a home-grown story that promises to take one down memory lane and which continues to evoke a strong notion of nostalgia among Hong Kong people.

With its roots in Hong Kong for close to 80 years, the classic local brand - one of the city's ubiquitous beverage giants - was the brainchild of entrepreneur Lo Kwee-seong that has come to represent the collective memory of local people and a part of their culture since its founding in 1940.

"Some of our products have been on the shelves for decades. The image Vitasoy represents among local people is very clear," says Roberto Guidetti, chief executive of Vitasoy International Holdings - Hong Kong's largest beverage maker.

The group's youthful marketing campaigns have always been synonymous with the environment. When the beverage maker was still in its infancy in the 1950s and 1960s, its cheap but nutritious soy milk was deemed the replacement for dairy for the masses who could not afford milk.

"Makes You Taller, Stronger and Fitter" was its chief marketing slogan at that time, with strong emphasis on the products' nutrition value. It then evolved into other hitting themes like "Not Just A Simple Soft Drink" in the 1970s, fully cashing in on the rising popularity of soft drinks, "You've Been A Beautiful Baby" and "Missing You All The Time" in the following decades as changes to the social landscape beset Hong Kong.

In the 2000s, mottos like "Stand By Me" and "Always Real" were the order of the day, reflecting Hong Kong people's relentless pursuit of selfhood in the city's rapid pace of life. The former's commercial jingle has evoked empathy and has been covered by many young people on YouTube.

Italian-born Guidetti, who joined the Lo family business in 2003, says he wants to innovate on the basis of respecting history, having reviewed all the paths the group had taken during his first few months with the group.

"We need to stay loyal to the roots and the core of the brand," he tells China Daily.

But, Vitasoy does not mean just nostalgia. It's an envious global success tale without losing touch with its local identity.

Besides Hong Kong, the group has manufacturing operations on the Chinese mainland and in Australia and Singapore. Last year, it started breaking into the Philippine market through a joint venture with a local food-and-beverage maker to boost its market share.

Strong mainland footing

Vitasoy's annual report reveals its revenue grew 20 percent for the 12 months to March 31 this year. A one-off gain from the divestiture of its North American business lifted the previous year's earnings. The group disposed of its North American Mainstream business, including the San Sui business in 2016 due to heavy losses. This apart, revenue was still up 21 percent, with net profit attributable to shareholders rising 14 percent year-on-year.

The divestment made the Chinese mainland the group's biggest market, accounting for more than 60 percent of total revenue.

Over the years, the classic Hong Kong brand has been expanding steadily but solidly on the mainland. Starting off on a strong footing in Guangdong province in 1994, Vitasoy now owns four plants in Shenzhen, Foshan, Shanghai, and Wuhan, capital of Hubei province.

Guidetti says the new production facility in Dongguan is due to roll out by April 2021.

In fact, Vitasoy's best seller - soy milk - isn't as popular as it has been in Hong Kong. Most people on the mainland are used to drinking "real" milk, and see soy milk's taste as too bland.

According to consulting firm ASKCI, per capita consumption of milk on the mainland reached 19.8 kilograms in 2016 - about 26 times larger than that of soy milk. But, with consumers in pursuit of healthier diets with low fat, the soy milk market is expected to see significant improvement.

Guidetti expects Vitasoy to benefit from this trend most. "The market for soy milk in packaged form is developing, and it'll grow bigger, we believe."

The mainland market has grown the most, recording a 39-percent increase in revenue and 71-percent improvement in profit from operations last year. Sensing the high-end demand for soy milk, the group has launched new products labeled "Health Plus" - the same series as that started in Australia and New Zealand.

Huge beverage market

The strong performance is also driven by the group's instant hit, lemon tea. It's hard to explain the specific reason for this, but Guidetti reckons the larger tea beverage market is a key factor.

"The tea (beverage) market is almost 10 times the size of soy milk on the mainland. Therefore, you'll see a better response to our expansion in tea products," he says.

Online exposure and e-commerce also play crucial roles. "Online portals have been a relatively big factor in arousing awareness of these products on the Chinese mainland. Even in places where we don't have our own physical infrastructure, consumer demands can be satisfied," says Guidetti.

"It also gives us an idea of where people like the products the most."

The group's close collaboration with e-commerce companies began two to three years ago. The sales volume for 24-carton lemon tea sets surpassed 89,000 on Alibaba Group's e-commerce platform Tmall last month, topping the tea beverage category.

However, business is not always as sweet as a bottle of soy milk or a carton of lemon tea. Prices of raw materials are tipped to go up in an uncertain global business and trade environment, which may put pressure on the group's gross profit margins. Faced with a likely rise in soybean and sugar prices, Vitasoy will adjust its product portfolio to offset that.

Guidetti cites sugar as an example. To support a healthy lifestyle, the group is committed to raising beverage offerings with moderate-to-zero sugar levels. Currently, 68 percent of its products are within this low-sugar level. If sugar prices see a relatively limited increase, Vitasoy will continue to launch more low-sugar products.

On the other hand, its strong sales of lemon tea on the mainland can also reduce the impact from surging soybean prices. Guidetti says the group is not planning to raise prices, but if raw-material prices continue to climb, they would consider it.

"Prices are always important, but it's even more important to have high-quality and innovative products to ensure healthy and nutritional benefits," vows Guidetti.

That's the mission the group continues to adhere to today.

Contact the writer at edithlu@chinadailyhk.com

(HK Edition 07/27/2018 page10)