---
title: "Vitasoy's 80 Years of Glory Hits a Profit Warning Stalemate"
description: "On August 6, Hong Kong's Vitasoy International issued a profit warning, expecting operating profit for the six months ending September 30, 2021, to range between a loss of HK$50 million and a profit of HK$60 million, a decline of about 91% to 107% compared to the same period in 2020, mainly due to a sharp drop in market demand in the second quarter of fiscal 2021/2022. Since early July, Vitasoy's market value has evaporated by HK$4.6 billion, and an inappropriate content release has severely damaged its brand image, leading to consumer boycotts and negative impacts in mainland China."
author: "圆圆"
publisher: "New Distribution"
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published: "2021-08-08"
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# Vitasoy's 80 Years of Glory Hits a Profit Warning Stalemate

> On August 6, Hong Kong's Vitasoy International issued a profit warning, expecting operating profit for the six months ending September 30, 2021, to range between a loss of HK$50 million and a profit of HK$60 million, a decline of about 91% to 107% compared to the same period in 2020, mainly due to a sharp drop in market demand in the second quarter of fiscal 2021/2022. Since early July, Vitasoy's market value has evaporated by HK$4.6 billion, and an inappropriate content release has severely damaged its brand image, leading to consumer boycotts and negative impacts in mainland China.

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On August 6, Hong Kong's Vitasoy International issued a profit warning on the Hong Kong Stock Exchange, stating that for the six months ending September 30, 2021, **the group's operating profit is expected to be between a loss of HK$50 million and a profit of HK$60 million, a decrease of about 91% to 107% compared to the same period in 2020.** The decline is mainly due to a significant drop in market demand in the second quarter of fiscal 2021/2022.
Since early July, Vitasoy's market value has evaporated by HK$4.6 billion. The release of inappropriate content has caused Vitasoy's brand image to plummet, leading to strong consumer boycotts and resulting in "negative impact on the group from mainland Chinese consumers."
Before this, the well-known Vitasoy lemon tea and Vitasoy soy milk had long been familiar and loved by consumers.
Since its inception in 1940, from ordinary soy milk to an international beverage brand, **its 81 years of development history indeed attest to the unique advantages of Vitasoy products and its precise grasp of market control.**
**The Starting Point**
Vitasoy was launched in Hong Kong, China, in 1940, focusing on soy milk beverages. Vitasoy's original intention was to provide affordable, high-protein drinks for ordinary Hong Kong families as a substitute for relatively expensive dairy products.
Before the War of Resistance against Japan, due to the lack of high-temperature sterilization technology, soy milk storage was not conducive, so initial sales were sluggish.
Vitasoy's real rise came after the war; the end of the war and market stability brought a favorable development environment for the beverage market.
At the same time, founder Mr. Lo Kwee-seong successfully obtained the agency for American Green Spot soda in 1950, mastering bottling technology, thus solving the previous problems of soy milk storage and transportation difficulties.
Subsequently, Vitasoy continued to rise, and by 1994, Vitasoy International was listed in Hong Kong, with its first factory opened in Shenzhen, officially entering the mainland market.
According to Euromonitor International data, from 2011 to 2017, China's soy milk sales increased from 5.08 billion yuan to 9 billion yuan, with an average annual compound growth rate of 10%. Vitasoy was riding the wave.
Not only was the soy milk market booming, but the rapid development of ready-to-drink beverages in the mainland also led to the rapid rise of its lemon tea brand, growing swiftly.
**The mainland market gradually became a key pillar for Vitasoy International.**
**Changing Strategies**
Vitasoy's initial product positioning was as a cheap milk substitute, but its product image gradually evolved into a nutritious soy milk beverage and became an international beverage brand. Throughout this, Vitasoy continuously changed its product innovation and market strategies to enhance product advantages and build brand awareness.
Initially, Vitasoy's business was not prosperous, so it broadened investment channels and increased visibility by acting as an agent for American "Green Spot" and "Pepsi-Cola" sodas.
More valuable was the advanced experience in production, operation, and market strategy from world-class beverage brands, which Vitasoy directly applied to its own operations, achieving significant results.
In 1974, due to the oil crisis, soybean prices soared, and the storage and transportation costs of glass bottles were too high, limiting Vitasoy's development. At that time, Vitasoy adopted sterile Tetra Pak packaging to replace the then-popular glass bottles, solving the problem.
Simultaneously, Vitasoy began to change its product image, establishing a "nutritional" and "healthy" beverage positioning to chase the emerging green and healthy consumption trend.
As consumers' spending power and living standards improved, "cheap" and "milk substitute" no longer appealed to consumers. Therefore, Vitasoy began to label its products, linking them to consumers' lives, and from a health and green perspective, promoted the slogan **"Vitasoy, the most important thing is to make you happy"** to build emotional resonance with consumers.
In terms of promotional methods, Vitasoy's slogan design and heavy investment in TV advertising were industry pioneers in that era, firmly capturing consumers.
Vitasoy has unique control and coordination in grasping consumption trends, adjusting market strategies, and upgrading products, which enabled it to grow strong and become an internationally renowned brand.
But no matter how strategies change or promotions emerge, **Vitasoy's advantage lies in its unique social and cultural emotional connection.**
This connection differs from product images built through promotional means; it is not a superficial "health" or "happiness" label. Its core connection is becoming a memory carrier for generations of Hong Kong people. This brand culture, accumulated over history, is Vitasoy's precious spirit.
Throughout its history, Vitasoy's image has been positive and uplifting. Its initial entrepreneurial purpose of benefiting the people and its glorious development after national hardships have given it a strong sense of justice and storytelling. Through decades of ups and downs, accompanying generations of Hong Kong people, Vitasoy has become inseparable from Hong Kong culture and a symbol of Hong Kong.
A brand with a sense of justice and unique sentiment, aligning with market trends and accurate market adjustment strategies, allows the old brand to retain tradition while radiating new vitality.
Vitasoy's success seems expected.
**Reputation Lost, Problems Persist?**
Vitasoy, which has been advancing triumphantly with its time-honored brand, seems to have gradually lost its "craftsmanship" in recent years, becoming a writer of professional blacklists.
As early as 2005, Vitasoy was exposed for using expired coconut milk to produce coconut-flavored Vitasoy. In recent years, this situation has intensified.
From 2017 to 2021, Vitasoy products were removed from shelves by multiple merchants due to quality issues. In 2017, about 8 tons of Vitasoy beverages were found to have excessive use of vitamins B1, B2, and pantothenic acid, and two batches, including Vitasoy honey lemon tea and Vitasoy apple green tea, were not allowed to enter the country due to exceeding shelf life.
From 2019 to 2021, Vitasoy products were restricted from entering the country for several consecutive years due to non-compliant quality inspections, including reasons such as substandard quality and excessive use of nutritional fortifier calcium pantothenate.
Vitasoy, which relies on the mainland market, has never truly considered mainland consumers. The recent practice of shielding employees involved in black violence has lost public support, far deviating from its original entrepreneurial purpose.
**A conscientious enterprise that serves the people has ultimately lost its integrity.**
The consequences are severe. It is expected that by September 30, 2021, Vitasoy's operating profit will be between a loss of HK$50 million and a profit of HK$60 million, a decrease of about 91% to 107% compared to the same period in 2020.
On July 5, Vitasoy fell 11.7%, with market value evaporating by HK$3.6 billion (about 3 billion yuan) to HK$27.7 billion (about 23 billion yuan) compared to the previous trading day. Mainland spokespersons Gong Jun and Ren Jialun also successively announced termination of cooperation with Vitasoy, greatly damaging its brand image.
**An Existing Crisis**
In reality, the ready-to-drink beverage market has been highly competitive in recent years. Innovative brands in fine tracks are emerging endlessly, and new beverages are rising rapidly. Contemporary consumers have a wide range of choices for beverage consumption, leading to a significant decline in user stickiness.
In this fierce red ocean, **product innovation is key, and user experience is the core.**
Vitasoy's product portfolio is relatively single compared to other brands. In the competitive market, Vitasoy soy milk faces Weiwei Soy Milk, and its lemon tea faces old rivals like Tea π, Master Kong, and Uni-President.
All are time-honored brands with similar categories, but other brands have entered new tracks, while Vitasoy has lagged behind. Meanwhile, the rise of sparkling water brands like Genki Forest and Perrier, as well as the impact of other new healthy beverages, also poses a huge market crisis for Vitasoy.
The transformation of consumer habits, reduced stickiness, and strong competition are all difficulties Vitasoy now faces.
At this critical moment, historical accumulation and the reputation of a time-honored brand should have been Vitasoy's advantages, but they have been damaged by inappropriate words and actions. This was avoidable and is regrettable.
**How to Break the Deadlock**
Currently, the public opinion situation is still fermenting, and the ongoing impact on Vitasoy International remains to be observed. Under these circumstances, Vitasoy International Holdings Limited Executive Chairman Lo Yau Lai once issued "A Letter to All Vitasoy Employees" to correct the company's stance, condemn violent acts that challenge legal bottom lines, and establish a patriotic and Hong Kong-loving brand image.
Although consumers remain passionate in their boycott and condemnation amid the incident's heat, Vitasoy International is already trying to reconnect with consumers' emotions through "storytelling," "sentiment," and "positioning" to salvage the situation.
Setting aside this incident, as of March 2021, Vitasoy's full-year revenue for 2020-2021 increased by 4% year-on-year to HK$7.52 billion (approximately RMB 6.221 billion), with mainland China revenue at RMB 5.008 billion (approximately RMB 4.143 billion), up 11% year-on-year, with the mainland market showing the most significant growth.
Therefore, in future market strategies, the mainland market remains Vitasoy's focus and reliance. **Maintaining brand image, in-depth analysis of the mainland beverage track, and product innovation are all key actions for Vitasoy going forward.** In the fiercely competitive FMCG track, most brands follow trends and quickly innovate, but advancing steadily in a competitive market is rare, and Vitasoy has done well in this regard. However, for all quality market strategies to be effective, they must be based on compliance and legality. **Having walked for over 80 years, Vitasoy, an old brand imprinted with Hong Kong's culture, should more strongly output patriotic sentiments, stay true to its original aspirations amid the waves of the times, and be reborn.**
_-END-_
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