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1. 1
Research on secondary data and report on the crisis that Vietnamese brands or enterprises
faced in 03 periods:
๏ 1990-1999;
๏ 2000-2009;
๏ 2010-2019;
(*) Select 01 industry to report
2. 2
Member of Intel:
1. ฤแป Quแปณnh Chi โ 21080111
2. Ngรด Thuแปณ Linh โ 21080139
3. Nguyแป n Thu Trang โ 21080185
4. Nguyแป n Thร nh Cรดng โ 21080114
5. Phแบกm Hoร ng Dลฉng โ 21080118
6. Phแบกm Phฦฐฦกng Anh โ 21080107
7. Nguyแป n Uyแปn Nhi โ 21080163
8. Nguyแป n Trung Hiแบฟu โ 21080126
3. 3
Table Of Content
1. Introduction.....................................................................................................................4
1.1.Industry background..................................................................................................4
1.2. The importance of dairy industry.............................................................................5
1.3. Reasons to choose and invest in Vietnam's dairy industry.......................................5
2. Overview and Data analysis of the crisis in 03 stages....................................................6
2.1.Period 1990-1999......................................................................................................6
2.1.1 Crisis: Vinamilk - Ong Tho Condensed Milk.................................................................8
2.2.Period 2000-2009......................................................................................................9
2.2.1 Crisis number 1: Vinamilk: Crisis of poor quality milk, yellow scum..........................11
2.2.2 Crisis number 2: Vinamilk: Case of dehumidifiers and iron filings mixed in Vinamilk milk
products..........................................................................................................................11
2.2.3 Crisis number 3: Hanoimilk: The โjudgment of dirty milkโ is related to the melamine toxin
in IZZI............................................................................................................................12
2.3.Period 2010-2019.....................................................................................................13
2.3.1 Crisis number 1: TH True Milk: ''Cat hanging bell''......................................................14
2.3.2 Crisis number 2: Vinasoy: More than 23 students were hospitalized after drinking Vinasoy's
Fami Kid milk................................................................................................................15
2.3.3 Crisis number 3: Vinamilk: Inaccurate rumors about raw material sources for milk
production.......................................................................................................................15
3. Part 3: Discussion about research results.......................................................................16
3.1.Disadvantages...........................................................................................................16
3.2.Advantages...............................................................................................................16
3.3.Summary...................................................................................................................17
4. 4
Part 1: Introduction
Reasons for choosing the dairy industry for research:
Fresh milk is linked with our childhood. Many dairy firms have become good friends of
ours. We grew up, and Vietnam's dairy sector is flourishing, both locally and globally. However,
several well-known companies have progressively gone from the market, raising concerns. As a
result, Intel chose to investigate the crises that occurred in Vietnam's dairy sector in three stages
in order to answer this question and complete the research. Intel believes that by combining
studied knowledge and personal perspectives, you will get the finest understanding of this issue.
1.1. Industry background
In the thirty years since 1990, Vietnam's dairy production, processing, and dairy industry
have achieved dynamic growth, providing abundant products for the national economy and financial
life, and distributing essential goods domestically. Gradually replace and repair imported dairy
products, and participate in exports with a variety of models and types. In addition, the department
has made significant contributions to the national budget, creating many employment opportunities
for workers, helping to protect people's lives and not changing social conditions, becoming an
important link in Vietnam.
Because they belong to the group of essential products, even during the gloomy business
years of businesses in the entire economy, dairy businesses still maintain strong growth at double-
digit levels. From 2010 to 2019, population growth and people's income increase lead to more
spending, and Vietnamese people's growing interest in health care products and the dairy industry is
5. 5
expected to continue. continue to maintain this growth momentum. Vietnam's dairy industry has
great potential for development and deserves attention from domestic and foreign investors.
1.2. The importance of dairy industry
Vietnam's dairy production, processing, and dairy industry provide a variety of products for
the national economy, meet domestic demand, gradually replace imported dairy products, and
participate in exports in various models and types. In addition, the department has made significant
contributions to the national budget, creating many employment opportunities for workers, helping to
ensure people's livelihoods and social stability, and becoming an important link in Vietnam's
agriculture.
1.3. Reasons to choose and invest in Vietnam's dairy industry
The geographical characteristics and tropical climate mixed with the temperate belt in
Vietnam are very favorable for the development of dairy herds. Grasslands such as Ha Tay, Moc
Chau, Binh Duong... provide abundant and abundant food sources and good growing conditions.
Vietnam is considered a potential milk consumption market. This is because Vietnam is a
populous country with a young population structure with a high population growth rate of about
1.2%/year, GDP growth rate of 6-8%/year, and average income per capita. increased 14.2%/year.
These factors combined with the trend of improving the health and stature of Vietnamese people
cause the demand for dairy products to always maintain a high growth rate.
6. 6
Part 2: Overview and Data analysis of the crisis in 03 stages
Period Crises
1990-1999 Vinamilk:: Ong Tho Condensed Milk: Crisis of trademark
infringement between Vinamilk and Foremost
2000-2009 Vinamilk: Crisis of poor quality milk, yellow scum
Vinamilk: Case of dehumidifiers and iron filings mixed in
Vinamilk milk products
Hanoimilk: The โjudgment of dirty milkโ is related to the
melamine toxin in IZZI
2010-2019 TH True Milk: ''Cat hanging bell''
Vinasoy: More than 23 students were hospitalized after drinking
Vinasoy's Fami Kid milk
Hanoimilk: The โjudgment of dirty milkโ is related to the
melamine toxin in IZZI
2.1. Period 1990-1999
Vietnam's dairy industry began in 1920, but from 1920 to 1986, Vietnam was in a difficult
period and it was difficult to develop the dairy industry. Since 1986, Vietnam has started the
"innovation" movement, and only three years later, there was food export from Vietnam, a country
with food shortage. The development of economy has created a growing demand for milk. Therefore,
the number of dairy cows in neighboring provinces such as Ho Chi Minh City, Pingyang, Tongnai,
Long 'an and the suburbs of Hanoi also increased rapidly. From 1986 to 1999, the average annual
growth rate of dairy cows was 11%. The private dairy farming movement has been formed and
proved tobe effective.
The domestic production of raw milk reached 36,000 tons in 1998 and 39,000 tons in 1999.
According to the data of NN-PTNT, the per capita milk consumption in Vietnam was only
0.47 kg in 1990, increased to 2.05 kg in 1995 and exceeded 5 kg in 1998.
7. 7
Statistical table of domestic milk production (1998-2005)
- Number of businesses/brands researched: 1 (Ong Tho Milk belongs to Vinamilk)
- Number of crises: 1
100%
Type of crisis 1990-1999
Organizational Crisis
Financial Crisis
Personnel Crisis
Technological Crisis
Natural Crisis
Confrontation Crisis
Workplace Crisis
Crisis of Malevolence
8. 8
2.1.1. Crisis: Vinamilk - Ong Tho Condensed Milk: Crisis of trademark infringement between
Vinamilk and Foremost:
Ong Tho Milk appeared in Vietnam and marked with consumers a brand of sustainable
quality products. At 1990, this was a brand introduced by the multinational dairy company Foremost
with the Longevity brand, the typical image is an old man holding a peach fruit, the Vietnamese
name is Ong Tho milk. In the 1990s, Foremost company decided to return to the Vietnamese market,
so a trademark dispute occurred
between two large dairy
companies to claim ownership
of the characteristic old man
image. As a result, Foremost
won the lawsuit and continued
to produce Longevity milk, later
changing its name to Truong
Sinh milk. On the other hand,
Vinamilk had to change to the
image of an old man and two
little boys. The name Ong Tho, which was already familiar to the people, was kept by Vinamilk. (1)
Result: Vinamilk lost the lowsuit and had to change to the image of an old man and two boys.
Foremost received violently reaction because Vietnamese people are familiar with Ong Tho.
Although there were no major consequences, the image of Ong Tho Milk was somewhat affected.
๏ฐ CONFRONTATION CRISIS โ Responsive Crisis Management
9. 9
2.2. Period 2000-2009
The dairy industry in Vietnam faced many crises in product quality, affected by flaws in
production and processing, leading to consequences that directly affected people. product
consumption.
2001: The Government had a policy to strongly develop Vietnam's dairy industry with the
adoption of Decision 167 / 2001 / QD TTg on dairy farming development policy in the period 2001
to 2010. According to the owner of this school From 2001-2010, some localities such as Ho Chi
Minh City, An Giang, Binh Duong transformed into Tuyen Quang, Son La, Hoa Binh, Ha Nam.
Imported a fairly large quantity: over 10,000 cows from the US and New Zealand to raise.
At the end of 2006, the country's dairy herd was over 113,200 cows, with total commercial
milk output reaching nearly 216.000 tons.
In 2009, total revenue reached more than 18,500 billion VND, an increase of more than 14%
compared to 2008.
Chart: Vietnam Milk Sales
10. 10
- Number of businesses/brands researched: 3 (IZZI, Vinamilk and Hanoimilk)
- Number of crises: 3
100%
Type of crisis 2000-2009
Organizational Crisis
Financial Crisis
Personnel Crisis
Technological Crisis
Natural Crisis
Confrontation Crisis
Workplace Crisis
Crisis of Malevolence
11. 11
2.2.1 Crisis number 1: Vinamilk: Crisis of poor quality milk, yellow scum:
On May 9, 2001, Mr. Tran Thanh Tu (Hai Phong), a regular customer of Vinamilk, said that
he had bought a lot of canned milk brand "Ong Tho" (lot 2C-05H1) with some cans having yellow
scum, quality is not guaranteed. When complaining to Vinamilk Dairy Company, I did not receive a
satisfactory answer. Mr. VTT on Ngo Van So street, Hanoi, also said that his family celebrated his
birthday and bought white boxes of sterilized fresh milk, priced at 2,600 VND/box, for use. After the
birthday party, all the participants were poisoned. Some other customers also reported that when
using Vinamilk's fresh milk or yogurt, there was an unusual smell.After many complaints, on
Vinamilk's side: Ms. Le Thi Bich Lien, Deputy Director of Hanoi Dairy Company (part of Vinamilk)
in charge of milk production techniques, said that the company's milk production and inspection
process is extremely strict. For canned fresh milk, although the canning is food safe and has good
quality, during transportation the can can be dented or broken, which can cause milk to precipitate.
The box lid may be damaged due to transportation and storage. During transportation, impact can
also cause the joints between the can edge and the can lid to open and so within just 24 hours the
milk can be spoiled. She said: "After Mr. Tu's complaint, we sent officers to Hai Phong to resolve it
and are ready to exchange Mr. Tu for new milk boxes." (2)
Result: The recall of the shipment caused consequences affecting Vinamilk's revenue,
causing loss of customer trust in Vinamilk.
๏ฐ ORGANIZATIONAL CRISIS: Crisis of Deception => Responsive Crisis Management
2.2.2 Crisis number 2: Vinamilk: Case of dehumidifiers and iron filings mixed in Vinamilk milk
products:
Product destruction On March 14, 2007, responding to the recall of Dielac milk products
mixed with dehumidifiers and iron filings, Mr. Tran Bao Minh - Deputy General Director of Vietnam
Vinamilk Dairy Joint Stock Company - said the total number of finished products controlled and
isolated after the above two incidents was 17,800 boxes (including 10,872 boxes of Dielac Alpha 1,
2,228 boxes of Dielac Alpha 3 and 4,700 boxes Dielac Star 3) and 30 tons of semi-finished milk (46
tons total) were stored for destruction. Mr. Bao Minh said that to ensure absolute safety for
consumers and ensure objectivity, Vinamilk has extended the recall of a number of shipments (about
10,000 boxes) produced after January 14. (3)
๏ฐ ORGANIZATIONAL CRISIS: Crisis of Deception => Responsive Crisis Management
12. 12
2.2.3 Crisis number 3: Hanoimilk: The โjudgment of dirty milkโ is related to the melamine toxin
in IZZI:
Before 2008, IZZI milk producer was regarded as a symbol of Hanoimilk's successful brand
building. At one time, IZZI was "liked" by children by its impressive TVC advertisement "Rain,
Wind" in the market. However, this series of successes ended temporarily at the end of 2008. In
October 2008, after the "melamine storm" swept through Viet Nam, the Ministry of Health
announced 18 kinds of products contaminated by melamine, among which two raw milk powders of
Hanoimilk came from China: Full Cream Milk Powder Grade A and Blue Cow-Full Cream Milk
Powder Used for UHT Milk.
The media crisis of Hanoimilk and IZZI milk brands officially began. Reports on suspicious
dairy products related to melamine have surged in the mass media, and hundreds of articles compete
for "many" hazards of this
substance to users' health. On the internet
forum, enthusiastic mothers talk about
milk containing melamine. In this
information cycle, Hanoimilk's IZZI
milk suffered serious losses. Results:
One day after the release of
melamine bonded milk sample
information, many dealers, shops,
supermarkets and consumers
"abandoned" and "resisted" the
company's products. Many stores try to
return the imported IZZI milk to
suppliers because of the fear that milk contains toxins. On the shelves of some supermarkets, IZZI
milk was removed due to the alienation of customers. Under the influence of the media, consumers'
confidence in Hanoimilk products and IZZI milk has dropped to a very low level. Sales fell sharply,
and no matter how the salesperson explained it, many consumers refused. (4)
๏ฐ ORGANIZATIONAL CRISIS: Crisis of Deception => Responsive Crisis Management
13. 13
2.3. Period 2010-2019:
While the production and business situation of many other industries is affected by the global
economic crisis and recession, Vietnam's dairy processing industry still achieves impressive growth.
According to EMI's assessment, Vietnam's dairy industry revenue in 2015 is estimated to reach
92,000 billion VND, up 23% compared to 75,000 billion VND in 2014. Accordingly, the compound
growth rate of the dairy industry in the period 2010 - 2015 was 14%. Also according to EMI, the two
main segments driving the growth of the domestic dairy industry are liquid milk and powdered milk
with a total market value of about 75%, of which the value of powdered milk accounts for 45%. (5)
growth
Scale of Vietnam's liquid milk market 2014 - 2018
14. 14
With strong investment from businesses, in 2017, Vietnam's milk export turnover reached
300 million USD, mainly yogurt and milk. moves in the markets of the Middle East, Myanmar,
Cambodia,... The growth in dairy industry revenue in 2017 compared to 2016 is estimated at about
10% with 2 main segments and also the 2 most important products: liquid milk and powdered milk.
The total market value of these two segments alone accounts for nearly 3/4 of the market value. Of
which, fresh milk reached 1,333.4 million liters, an increase of 6.6% compared to 2016, powdered
milk reached 127.4 thousand tons, an increase of 10.4% compared to 2016. Particularly, Vietnam
Dairy Products Joint Stock Company (VNM) Contributing approximately 50% of total industry
revenue last year, reaching over 51,000 billion VND.
According to Euromonitor statistics, the total size of Vietnam's milk market in 2019 reached
121,000 billion VND, an increase of 8.9% compared to the previous year. Consumption of drinking
milk and yogurt showed outstanding growth (up 9.9% and up 11.6% according to output), while
powdered milk and condensed milk grew by 2.1% and 2.7% respectively.
- Number of businesses/brands researched: 3 (TH True Milk, Vinasoy, and Vinamilk)
- Number of crises: 3
2.3.4 Crisis number 1: TH True Milk: ''Cat hanging bell''
In July 2012, after one year of entering the Vietnamese dairy market, TH True Milk released
a promotional clip with the message "Natural essence is kept intact in TH True Milk's clean fresh
milk." Immediately, this advertising clip caused a strong wave of opposition, with many people
believing that TH True Milk intentionally made consumers think that "their milk is clean, while other
milk brands are not clean." This debate has arisen with strong criticism, especially that TH True Milk
may have created a misunderstanding that other dairy companies do not guarantee quality and
cleanliness.
34%
33%
33%
Type of crisis 2010-2019
Organizational Crisis
Financial Crisis
Personnel Crisis
Technological Crisis
Natural Crisis
Confrontation Crisis
Workplace Crisis
Crisis of Malevolence
15. 15
Result: This controversy has created suspicion and negatively impacted the company's
reputation.At the end of July 2012, the Dairy Association even sent a complaint to the Ministry of
Health, the Ministry of Industry and Trade and other relevant agencies, asking these agencies to
review and check TH's advertising content. True Milk. This demonstrates the seriousness of this
debate and the dairy industry's interest in the issue. (6)
๏ฐ ORGANIZATIONAL CRISIS: Crisis of Deception => Responsive Crisis Management
2.3.5 Crisis number 2: Vinasoy: More than 23 students were hospitalized after drinking Vinasoy's
Fami Kid milk:
At noon on March 15, 2019, more than 23 students of Nha Long Primary School (Nha Long
commune, Phu Binh district, Thai Nguyen province) had to be hospitalized for treatment after
drinking Fami Kid milk at school. Thai Nguyen Provincial Department of Food Safety and Hygiene
also worked with representatives of Phu Binh district authorities. Verification results showed that the
school gave students Fami Kid soy milk (The batch of milk has information: Fami Kid soy milk
Chocolate flavor. Production date March 5, 2019, expiration date is September 5 /2019, batch
number is 032I, produced by Vietnam Soymilk Company - Vinasoy) under the school milk program
for elementary school students in the 2018-2019 school year.
Result: After the incident happened, leaders of the Phu Binh District Education Department
immediately directed to stop all use of this type of milk for students in Phu Binh district (7)
๏ฐ CONFRONTATION CRISIS => Responsive Crisis Management
2.3.6 Crisis number 3: Vinamilk: Inaccurate rumors about raw material sources for milk
production:
In 2019, false and inaccurate rumors about Vinamilk's raw material import activities have
caused misunderstanding and confusion among consumers and had a great impact on businesses.
Specifically, a personal Facebook account posted Some images are said to be the list of imported
ingredients of Vinamilk Company, most of which are skim milk powder, leading to negative shares
and comments about product quality.
Result: to avoid misleading consumers about the quality of Vinamilk dairy products, on
November 30, 2019, Vinamilk CEO Phan Minh Tien issued a transparent announcement about the
company's raw materials for milk production. Accordingly, to produce powdered milk products
(children and adults) and nutritional powder, in addition to using domestic ingredients, Vinamilk also
imports raw materials for production, meeting meet the needs of domestic and export markets. (8)
๏ฐ CRISIS OF MALEVOLENCE => Proactive Crisis Management
16. 16
Part 3: Discussion about research results
3.1. Disadvantages:
Besides some dairy businesses that always put product quality first, there are still many
businesses that are unclear about product quality and do not really care about this issue. There still
exists a situation where businesses produce dairy products with extremely low protein content or are
contaminated with substances harmful to consumers' health. The desire for high profits and the
negligence and irresponsibility of some businesses have harmed the health of children and the elderly
- those who need the most health care.
3.2. Advantages
Through the above analysis, we can see that compared to the world milk market, the
Vietnamese dairy market has achieved impressive growth in terms of value and production. The
domestic dairy market is currently in favorable development conditions. Consumers' demand for
quality and richness is constantly increasing. With the government's policies, the scale of dairy
processing enterprises continues to expand, and many manufacturers have participated in competitive
market share. Vietnam's dairy industry has broad prospects for development.
17. 17
3.3. Summary:
Comparison between 3 stages
Period 1990-1999 Period 2000-2009 Period 2010-2019
Similarities The dairy industry in particular and the food industry in general often
encounter crises related to food hygiene and safety, labels, packaging
and communication and advertising campaigns.
Differences ๏ท Crises that
occurred
often
revolved
around the
issue of
packaging
labeling
issues
๏ท Businesses in
general and
the dairy
industry in
particular did
not pay
attention nor
had the
conditions to
create a
beautiful
packaging or
logo
๏ท Packaging
was given
more
attention
๏ท Came the
problem of
food hygiene
and safety
๏ท Enterprises
neglect the
quality of
their
products,
affecting not
only their
own
businesses
but also
consumers'
health
๏ท Along with the
development
of the internet,
the
communication
crisis about the
dairy industry
becomes more
complicated
๏ท It requires
businesses and
brands to
handle things
more quickly
and wisely
Although we can ignore the weaknesses of the dairy industry in the market, but they can all be
overcome and the strengths of this industry are extremely prominent and clear. In addition, at the
beginning of the 21st century , businesses began to have communication campaigns to promote their
products closer and stronger to the public.