Malaysia Milk diversifies to increase reach

LOVE your tummy every day. Vitagen! — is perhaps one of the most memorable jingles on television these days. And Vitagen is a product well-known in the local market.

Vitagen is the brainchild of Malaysia Milk Sdn Bhd and the cultured milk brand has been loved by young consumers for many years.

Malaysia Milk was founded in 1969 mainly to act as a distributor for condensed milk produced by its Singaporean partner, Malaysia Dairy Industries Pte Ltd.

However, the small-scale distribution business was not enough for the company and Malaysia Milk went about developing its own products.

The company established its manufacturing plant in 1977 to produce cultured milk, a product new to the local market then.

“The health awareness level 36 years ago was not really there yet.

“We were the first to introduce ready-to-drink cultured milk to the local market and there was a lot of educating to do. We needed to educate consumers about digestive health before we could educate them about the product,” said Contra Enterprises Sdn Bhd deputy general manager Michael Ong.

Contra Enterprises is a subsidiary and the trading arm of Malaysia Milk.

Malaysia Milk launched its education programme, Vitagen Healthy Tummies Programme, as a vehicle to promote greater awareness on good digestive health which quickly became a platform to also promote Vitagen.

Vitagen has since become a household brand with more than 30 years of history.

Ong added that after much effort, Vitagen has captured over 60% share in the local cultured milk pie and the product is widely distributed in Malaysia and Singapore.

The company has not stinged on its advertising and promotional (A&P) efforts to keep Vitagen top-most on consumers’ minds. It was reported that the company spent no less than RM10mil on A&P in 2009.

Diversifying for growth

As Vitagen became an acceptable product in the market, Malaysia Milk started developing other products along the value chain to cater to different consumers.

Ong explained that some consumers preferred yoghurt or yoghurt drinks and other types of healthy beverages like fruit juices.

Through Malaysia Milk’s diversification strategy, the company spun off another successful brand — Marigold.

Under the Marigold brand, the company has a line-up of milk products, yoghurt and other desserts.

Ong noted that its Marigold HL Milk is the leading brand in the low-fat milk segment and its Marigold PEEL Fresh has been a Gold Award winner of the Readers Digest Trusted Brand Award for many years.

Malaysia Milk has also produced variants of the Vitagen drink to reach a wider group of consumers. It introduced the less sugar and collagen options to appeal to adult consumers.

“Over the years, somehow Vitagen became perceived as a kids’ product. But that is not true.

“Even adults need to take care of their digestive system. So we have been running campaigns to also encourage adults to consume Vitagen and these new products would help with that campaign,” Ong said.

He added that reaching out to health-conscious adult consumers enabled Malaysia Milk to penetrate a new market which would inevitably lead to bigger growth for the company.

Growing with the market

Although Malaysia Milk has other products under its stable, Vitagen remains its core produce.

Ong noted that the growth of the cultured milk market is pro-mising as Malaysians are getting more health-conscious and this is expected to push up demand for such products.

“The market has grown bigger over the years with increased consumption. And as the level of health awareness increases, we will see the market get bigger. Volume is still growing,” he said.

He estimated that the local cultured milk market grows at about 5% to 10% per annum.

And as with most markets, the prospect of growth has drawn more players into the arena.

According to Ong, there are about five major brands of cultured milk in the market.

“We welcome healthy competition. When there are more players, we will have to improve ourselves to move ahead,” Ong said.

But Ong believes that there is enough room for every player to grow given the many untapped segments in the market.

Malaysia Milk has been actively identifying opportunities in the market to continue reaching out to new segments.

The market’s growth is, however, constrained by the lack of chiller facilities in the retail market.

There are generally two categories of products manufactured by Malaysia Milk, chilled products and non-chilled products.

Ong said the market can only grow hand-in-hand with the growth of chiller facilities on the distribution and retail side as the lack of facilities limits the amount of products manufactures are able to push out.

One option that Ong said can be explored by the industry is to co-invest in such facilities with retailers to ensure the quality and freshness of products are maintained.

Malaysia Milk tries to introduce a new product every year to keep up with the market and to maintain excitement among consumers for its product range.

Ong added that it is a strategy adopted by every player in town and if it does not keep up, other players will fill the market with their offerings.

“What we want to do more is to innovate our product range to create more excitement in the market and cater to different tastebuds. And we will definitely continue to invest in promoting our products,” Ong said.


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