Vitasoy Australia recently celebrated its 21st birthday having established itself in Albury Wodonga since 2001, however the biggest growth spike in the local business has occurred in the last seven years. Adam McCleery writes.
The rapid growth of the alternative milk sector over the last decade, despite its presence in Australia for decades, has in part been attributed to a range of factors.
The obvious driver behind the growth of the alternative milk sector, as it is across the food and beverage industry, is a change in consumer trends.
Vitasoy partners with Australian farmers source ingredients for its range of alternative milks, which includes soy milk, oat milk, almond milk, and rice milk.
Vitasoy managing director, David Tyack, said the successful growth of Vitasoy in Australia has come off the back of strong local manufacturing relationships with farmers and other ingredients suppliers.
“We started as a joint venture with National Foods Ltd and originally, we were importing from Hong Kong made products into Australia in the early 90s,” he said.
“Like any of the plant-based offerings today we were the new funky offering, but at the time only health food shops, and other fringe styled shops, would take us on board because of the penetration of dairy milk in the mainstream.
“The joint venture took off in sales in the early days and it made sense to have a localised plant in Australia.”
Tyack said that focus on Australian ingredients was a big part of what set Vitasoy apart from its competitors.
“We take Australian produce, the best of Australian soy, almonds, rice, and oats, convert it into our great tasting products at our facility in Wodonga and then we sell it to the marketplace,” he said.
“We aren’t bringing in overseas ingredients, we are trying to leverage brand Australia which around the world is recognised as clean and green and has that great attribute to it.
“For us, the difference is we back ‘Team Australia’ with our factory here, our long-term relationship with our farmers, and we think that is what makes us a great offering in a very fast and ever evolving plant milk market.”
Tyack said sourcing local ingredients presented a host of advantages, but the company also has to have contingencies in place for unforeseen circumstances.
“For example, a few years ago we had a drought in Australia and some crops were compromised so we had to go far and wide for a short period of time to deliver the product to the marketplace,” he said.
Meanwhile, the impact of COVID-19 is an example of the advantages to Vitasoy’s insistence on localised ingredients.
“The supply chain challenges for getting things into Australia during the pandemic created issues,” Tyack said.
“But in this case, we were fortunate that we have a strong and localised supply chain from farmers across New South Wales, Victoria, and southern Queensland, rather than having to rely on freight from Europe or North America.”
Keeping aligned with consumer trends has also been a significant part of Vitasoy’s approach, from providing soy milk to the market when it was the leading alternative milk option, to meeting current trends.
“The consumer trends, acceptance, and their exploration of plant based alternatives has accelerated over the last three to five years,” said Tyack.
“The mainstay had been soy, which has been around in this marketplace for over two decades, and it is quite close to the nutrition provided by dairy milk, from a plant-based offering. It has the unique point of protein, calcium, comparable to dairy milk.
“Then about eight or nine years ago almonds really came from nowhere and became a major player in the marketplace.”
That rise in popularity of Almond milk saw the product become the most popular alternative milk on the market and a similar emergence is occurring with other alternative milk offerings.
“The big trend over the last three years has been with oats,” said Tyack.
Prior to its rise in popularity, oat milk was in a similar segment to rice and coconut milk, a small percentage of the market was purchasing it.
“But its explosion of acceptance off the back of its characteristics being close to that of dairy milk,” said Tyack.
“The creaminess and neutral base are the perfect platform for people to try plant-based milk and we have found oats are going gangbusters across all offerings. To the point you see oat milk specific jugs in café’s where it would usually have been soy, almond, and dairy milks.”
The growth of the alternative milk market has also seen it penetrate the café and barista sector off the back of improved formulations.
Tyack said alternative milks such as soy, almond, and oat, were becoming more prevalent in café’s which was also providing invaluable exposure for the products.
“Penetration into the barista market is very important because it’s a great touch point with consumers out of the home and in their day to day lives,” he said.
“To have the industry try and focus on that area and have that formulation in place for it to perform the same way as dairy milk is critically important.
“When plant-based consumers enjoy their coffee there is no compromise from a dairy option.”
Tyack said while alternative milks had some way to go to perfect formulations to the point that they all retain the same components as dairy milk, the signs so far were positive.
Vitasoy’s manufacturing facility was built in Wodonga, Victoria, because of its prime position close to the Hume Highway and between both Sydney and Melbourne, two of Australia’s largest markets.
‘The site was also chosen because of the easy access to good clean water,” said Tyack.
“Plant-based milk is mostly made up of water so access to good clean water is important to its production.”
The Wodonga facility is Vitasoy’s only manufacturing site within Australia and New Zealand but because of its location the company can scale up its operations to match growing industry and market demands, both locally and now internationally.
“We are starting to see exports grow because of a growing demand for clean and green products from Australia,” said Tyack.
A 12 to 15 per cent growth in the grocery segment and further growth in the coffee market have also helped drive the need to scale up to meet demand.
Tyack said those two factors combined meant the company was always looking at expanding its capacity in Wodonga to address growing demand.
“We have gone from a relatively small facility, with about sub 10 million litres per year, to now up to 70 million litres a year,” he said.
“We are currently looking to invest in unlocking even greater capacity so that we can have a facility greater than 100 million litres per year to meet the needs of that growing marketplace.
“It’s also fortunate that our founder chose a? large greenfield site so even though we consume the real estate inside the building right now, we have lots of greenspace around to expand and put in more lines.”
The facility in Wodonga produces Vitasoy’s soy, almond, oat, coconut, and rice milks. All of which undergo a similar process with only a few key differences at the start point.
“For our soy milk we start with a whole soybean, we don’t use a soy flour or soy protein isolates or anything like that, which we then dehull and then grind up before adding stabiliser and some flavourings to it. From there it’s mixed with water, sterilised, and packed off,” said Tyack.
“Oats are a bit different because they are ground up.
“In relation to our almonds, we use one method which soaks the almonds before we grind them, however we are also starting to recognise consumers like other almond milks which are made from almond paste, so we are currently exploring that avenue with our almond suppliers.”
Vitasoy has also put a renewed emphasis on helping create a more sustainable manufacturing sector.
“In recent years we brought our ‘Let’s Grow a Better World campaign to life, which is more than just a marketing campaign, it is about what drives our business,” said Tyack.
Being a plant-based manufacturer, Vitasoy aims to promote how plant-based is helping to drive sustainability.
“Prior to that most of the marketing communications in the plant-based market has been very functional. We try and use a purpose lead approach? around our sustainability initiatives and what we are trying to achieve,” said Tyack.
“We are always looking at ways to develop more sustainable practices, how we can improve nutrition, reduce sugar levels, reduce fats and use less energy and water. It drives the whole business.”
Tyack said the company wasn’t satisfied with doing only the bare minimum required when it comes to a more sustainable approach to manufacturing, and instead saw it as a competitive advantage to be a key leader.
“It’s very important for us to play that key lead role. To be leaner and greener and tread lighter on the environment, which is anchored to the whole strategy of the business,” he said.
“That means doing things like looking at the ways we make the products and how we bring them to life.
“Demonstrating how we’re growing a better world is paramount, which is why we’ve just launched a 5-year partnership with The Mulloon Institute, one of only five organisations globally recognised by the United Nations as a demonstrator of regenerative agriculture.
“Their goal, with support from Vitasoy, is to bring millions of hectares back to life for a more resilient Australian landscape.
“We are driving that agenda and see it as a competitive advantage because we know consumers are becoming more aware of where their products come from and how they’re made.”