Roel Van Neerbos, president of consumer dairy global at FrieslandCampina, speaks about the challenges in the dairy business and his companys business strategy in Viet Nam.

What is the biggest challenge the dairy business faces today and how can it be overcome?

It is estimated that the global demand for dairy will go up by 2.5 per cent a year up to 2020. The biggest challenge for us, therefore, is making affordable nutrition available to everyone on the planet. This is in line with FrieslandCampinas mission of nourishing by nature.

A fast growing population and environmental pressure are the blocks that we are bound to encounter, but we have a well thought-out strategy and a strong global presence to make this a reality.

Acknowledging the importance of change, we have planned several themes and enablers in order to attain our objective, the intent being to win with nutrition, serve the 24/7 consumer and customer, lead with sustainability, and elevate our essentials.

Further, we will make sure our supply chains are secure. We must build trust in our consumers and, to do that, we have to be open and transparent and provide our customers with relevant information. Our company lays a lot of stress on food safety and sustainability, and this should be communicated to them.

The dairy business is today witnessing an increase in consumption per capita and we at FrieslandCampina are ready to meet the challenges in all markets, including Viet Nam.

What are the challenges you face in terms of market penetration and competition in Viet Nam?

The average milk consumption in Viet Nam is not even half of that in Thailand, one-third of Singapores and far less than that of Europes.

We have to, therefore, work on the consumers perception and motivate them to drink milk as Viet Nam is not a milk-drinking country. A joint effort by dairy manufacturers and stakeholders is needed to educate people to consume a sustainable dairy diet for health benefits.

Vietnamese currently drink only 12 litres of milk a year though we anticipate higher demand in future.

It is encouraging to note that Vietnam has had impressive economic growth in recent years and thus has a great potential market.

Enterprises from the Netherlands are investing heavily in Vietnams agricultural sector. When the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect in Viet Nam, import tariffs on dairy products from New Zealand, Singapore and Japan were cut to zero, making these product lines more competitive.

A major challenge that we face here is the countrys unsettled regulation of milk and milk-based products. There is no regulation to define fresh milk vs. UHT milk. The Government had issued a fresh milk regulation in 2017 but it was withdrawn just two months later.

What does Dutch Standard mean and how is FrieslandCampina applying that to Dutch Lady in Viet Nam?

Dutch Standard refers to high-quality fresh milk made from proven Dutch dairy expertise. FrieslandCampina, with a rich heritage of over 145 years, ensures that its products are secured with the same quality of milk globally. Our reach now extends to more than 100 countries.

FrieslandCampina has its own integral quality system called Foqus, with which we offer consumers, customers and the authorities the guarantee that our products and processes throughout the entire production chain meet stringent standards in terms of quality and food safety.

We also make sure that we provide balanced and good nutrition to our consumers and target to have 70 per cent of our products globally complying with nutrition guidelines.

We plan to build on our relationship with Vietnamese farmers to produce the best fresh milk supply, starting with the setting up of a milk collection system to ensure they can sell their products.

We will also offer regular technical support and veterinary services.The company intends to train farmers in the construction of sheds, planting grass, selection and processing of food, care of calving cows and calves, preventing common diseases and so on.

FrieslandCampina Vietnam always offers a purchase price based on milk quality to encourage farmers to pay attention to this important aspect of our industry.

Dutch standard is considered more advanced and better than Asian, especially Vietnamese. How do you plan to convince people to buy a product with Dutch standards but produced in Viet Nam?

The Netherlands is famous for its excellence in the dairy sector and is also the market leader in terms of food safety and quality. The Dutch dairy industry has achieved its strong competitive international position based on high standards of technology and quality.

Dutch legislation is aimed at guaranteeing safety and adheres to a strict interpretation of EU legislation.

With a heritage of over 145 years, FrieslandCampina knows milk well and delivers the best milk quality. Our products are secured with the same quality of milk globally.

We apply the same standards and regulations to all our production and distribution companies, wherever they are located in the world. One significant example is that we are the only company in Viet Nam that pays and rewards farmers based on total count (micro-organisms).

And our standard is 10 times stricter than the Vietnamese legislation. Not only do we have our own inspection teams, we also use independent external institutions to perform inspections.

Was it difficult for FrieslandCampina to resolve challenges when applying Dutch standards in the Vietnam market?

It is, inevitably, a huge task for the dairy industry and the Government to work together to improve efficiency in dairy production and at the same time promote sustainable consumption and protect the environment. The Vietnamese diet depends heavily on sugar. In fact, the sugar consumption of its people is four times what is recommended by the World Health Organization. Our company needs to work hard to find solutions to balance a sustainable diet with the consumers motivation to drink milk. In addition, there is no legislational endorsement. We target to have 70 per cent of our products globally complying with the nutrition guidelines while recognising the challenge in changing local taste preferences.