Vitasoy chief milks vision of health

Even after 40 years at Vitasoy International Holdings, Winston Lo Yau-lai still enjoys the soya bean milk drink his company produces. 'I like Vitasoy soya bean milk the most and drink it every morning. I like to add one third of a 250ml pack of Vitasoy to my coffee, making it nutritious and tasty,' he said, with a smile on his face which looked more energetic than his actual age at 65 - the official retirement age in Hong Kong. The executive chairman of Vitasoy admits he has begun succession planning for his company which with a history of 66 years, is one year older than Mr Lo and is the longest serving drink company in Hong Kong. 'I think about retirement from time to time. However, even when I step down from the position of executive chairman, I will continue to provide directions to the board and company,' he said in an interview at Vitasoy's headquarters in Tuen Mun. Mr Lo has already set out the qualifications for his successor. The individual should have 'a broad vision with international exposure'. 'He or she should be able to take Vitasoy to a new level. I won't rule out someone just because he or she is a member of my family but I will give equal opportunity to both family and non-family candidates.' Hong Kong people feel an emotional bond with Vitasoy. Launched in 1940, it has a long history in Hong Kong, a healthy image and it is homegrown. Many people remember having visited its plant when they were young. Vitasoy has long made a point of arranging for student groups to come and see first-hand how its soya milk is made. 'To many local consumers, Vitasoy is more than a casual drink. It represents quality and wholesomeness. There is a strong emotional bond between Vitasoy and our customers. We grew up together,' Mr Lo said. Mr Lo's entire life has revolved around Vitasoy. 'When I was still in secondary school, I started working in different departments in Vitasoy to understand the operations. My degrees in food science have equipped me with the technical knowledge and expertise needed to develop my career in the food industry,' he said. His father, Dr Lo Kwee Seong, established Vitasoy in 1940 with a single soya bean milk product that was delivered by bicycle. It became a listed company in 1994 with 300 leisure drink products on sale in more than 30 markets worldwide, including China, the United States, Canada, Australia, New Zealand and Southeast Asia. Today the company produces 200 million litres of beverages a year in Tuen Mun. It also has factories in Shenzhen, Shanghai, the US and Australia. Its other business line is school catering, providing services for more than 300 school tuckshops. The Lo family as a whole have been important players in the Hong Kong food industry. Victor Lo Tang Seong worked at Vitasoy for 17 years before leaving to found Cafe de Coral in 1968. Cafe de Coral is now the world's largest publicly traded Chinese fast-food operator with 520 outlets worldwide. Dennis Lo Hoi-yeung established his own fast-food chain, Fairwood, in the 1980s. It, too, is listed in Hong Kong. Instead of following his relatives' example and setting up his own company, Winston Lo remained faithful to his father's vision which was to provide the public with healthy drink products. 'In the 1940s, malnutrition-caused diseases such as pellagra and beri-beri were proliferating in Hong Kong and China. My late father was once on a business trip to Shanghai and attended a seminar conducted by Julian Arnold, a commercial attache with the US Embassy in China,' he said. 'The title of that seminar was, 'The Cow of China - Soya Bean'. My father was very excited to learn of the nutritional benefits of the miracle bean in that talk - so much so that he dropped every other business to start Vitasoy, whose mission was to provide high-protein milk substitutes for the common people of Hong Kong and China.' Dr Lo set up a plant with HK$25,000 and began delivering soya bean milk door-to-door by bicycle. On the first day only nine bottles were sold at six cents each. When the Japanese invasion halted production in 1941 sales of Vitasoy were about 1,000 bottles a day. At the end of the war in 1945 production resumed. In 1948 the company recorded its first profit - HK$56,000. It was Winston Lo who led Vitasoy to diversify into different product lines and expand internationally. He may owe his global vision to having studied at Cornell University in the US, from which he emerged with a master's degree in food science in the 1960s. 'During the 60s, Vitasoy was still a growing food company. My father encouraged me to study food science as he hoped the knowledge I acquired would help him to run the factory and enhance the company's product development. I joined Vitasoy in 1968 and my studies in food science provided me with solid scientific training in the areas of logical thinking, problem solving and management skills.' Life, however, was not always as sweet as a bottle of soya bean milk. In its 66 years the company has ridden many ups and downs of the economic cycle. Mr Lo figures the most serious hit occurred in 1974. 'There was a surge in global oil prices and this in turn led to price rises in sugar and soyabean. The business of Vitasoy was seriously affected,' he said. To cope, Mr Lo introduced Tetra Pak packaging technology in 1975. This meant that ultra high temperature sterilisation could be used, allowing the company to keep its products in storage without refrigeration for months and to ship them abroad easily. 'This technology helped Vitasoy to explore overseas markets and also widened the product range. At the same time, the company repositioned itself. With the help of some innovative advertising, the products came to be identified as leisure drinks instead of milk substitutes. Sales of Vitasoy products soared and profit returned to the level of 1973,' he said. Mr Lo has always been keen to promote Vitasoy internationally. It was a Pepsi Cola distributor from 1957 to 1977. 'From our partnerships with other international companies we not only learned their skills and technology but also established mutually beneficial relationships with them,' he said. These days the business is in good shape. In the six months to the end of September its net profit stood at HK$100 million, up about 10 per cent over the same period a year earlier. Despite having 300 different products, including distilled water, lemon tea and other special flavours, the traditional soya milk products are still Vitasoy's best sellers. They contributed 40 per cent of turnover in the first half. But Mr Lo said plenty of challenges remain for him and his eventual successor. 'Customers nowadays are sophisticated and demand more than just drinks. The health consciousness of consumers is also on the rise. This complements the vision of our founder - producing nutritious drinks at reasonable prices. This prompted Vitasoy to introduce new categories of health-promoting products. 'Speedy innovation to address consumer preferences is critical for us to excel in today's competition. The launch of our new products is also complemented by innovative marketing and advertising. In fact, we consider all local and overseas non-alcoholic drinks to be our rivals.' Another challenge is environment-related - the company uses more than 45,000 kilometres of tetra-pack paper each year. Some green activists have called on the company to turn back the clock and once more package its drinks in returnable bottles. However, Mr Lo rejects this idea. 'Many people think glass bottles are reusable and environmentally friendly. In fact, the process of reusing glass bottles consumes energy which also brings damage to the environment. Therefore, we believe using tetra-packed products consumes less energy and is more environmentally friendly.' Its school catering services, which now serve over 300 schools daily, also give priority to students' health, though the students may think differently. 'School children usually like tasty food, while parents and teachers demand highly nutritious food. We always work towards the goal of providing food that is both healthy and tasty,' Mr Lo said. 'Since the start of the new school term this year, we have been supplying more healthy snacks like dried fruits, sandwiches and soya milk at schools.' Staying in the industry for nearly 40 years, Mr Lo said the best rewards were not the profitability of the company but comments from satisfied customers. 'The best thing for us is that we often hear from our customers that drinking hot Vitasoy soyamilk drink in winter can give them a warm feeling from the bottom of their heart. It is not only a recognition of our product quality but also a reward to our efforts in providing high-quality products to consumers.' enoch.yiu@scmp.com 'We have a strong emotional bond with our customers. We grew up together' Winston Lo Vitasoy International Holdings