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Chobani founder Hamdi Ulukaya says it’s about time businesses started shifting away from simply chasing profits and instead focus on social responsibility.

The founder of the multibillion-dollar yoghurt brand says the success of his company, which started with him buying a disused yoghurt factory in upstate New York in 2005, is proof that it’s possible to run a business that puts communities and consumers before profits and shareholders.

Since its humble beginning, Chobani has become the No.1 Greek yoghurt brand in the United States and runs the largest yoghurt facility in the world. For Ulukaya, it has given him a platform to pursue his passion to democratise access to quality food globally.

“I want this idea of Chobani to impact other businesses as a proof point of saying this narrow view of focusing on only profit is yesterday’s idea — and there is no place for companies in the future to be in this narrow mindset.

“Through yoghurt, we want to make a difference [to] people’s lives,” he said while visiting his company’s Australian team last week.

As the world has emerged from the pandemic to face soaring inflation, including in grocery prices, Ulukaya’s focus on access to food has taken on a greater importance.

He is critical of other global food giants who are posting record profits at a time when many shoppers are struggling to get food on the table, and notes companies were keen to pass on price rises immediately but have been slower to wind these back when input costs have moderated.

“During the pandemic and post pandemic ... the underprivileged community’s access to food became more challenging. Yet companies are focused on extreme profits during this time,” he said.

“You see an enormous amount of profit records from food companies – it’s real, it’s out there, they publish it. Yet, there is this problem of hunger, and not being able to afford food – that is a big problem.”

Inflation has hit food makers across the globe, however, and Chobani is by no means immune from the reality of rising supply chain costs.

The company’s Australian managing director, Lyn Radford, says she has had several long conversations with Ulukaya about the impact of rising ingredient prices in Australia, and how to balance these soaring costs with price increases.

The company has put prices up for some Australian products, but Radford says Ulukaya’s message was to find a balance and keep the brand accessible to consumers.

“The one thing that he said to me that really stuck with me is, ‘Don’t make the short-term decisions that will impact the long-term business. Don’t damage the business now … this is a longer-term journey that we’re on,’ ” Radford said. “We are not taking the same quantum of price increases that our competitors are.”

Ulukaya said it was critical that the company’s core consumers still felt they could afford Chobani products.

“I want to make sure when someone buys this yoghurt, it doesn’t make a pain in their gut [and they say], ‘Well this is too much.’ I want them to buy it with a smile and say, ‘I can’t wait to take this home and feed my children,’ ” he said.

The company’s approach to manufacturing has provided some degree of control during difficult trading conditions, including the pandemic.

“One of the advantages we have is that [from] day one, we believed contract manufacturing was not something that we liked,” Ulukaya said.

The business has instead invested heavily in its own manufacturing hubs, including its new facility in Dandenong South, which opened in 2022, with a view to having more control over how it makes its products.

The strength of Chobani’s growth during the pandemic sparked plans for a sharemarket listing in the US, but Chobani pulled plans for the float in 2022, citing tough market conditions.

Ulukaya said he was happy the business made the decision to focus on continuing its growth instead of getting distracted by the ups and downs of the market, though he is still open to the idea of listing in future.

“We paused it because we didn’t think it was a good moment. I’m proud of the intelligence Chobani had [to do that],” he said.

Whether the company stays public or private, Australia remains a key growth market for the brand, which has expanded its product portfolio significantly over the past few years.

Chobani’s most recent financial documents filed with the corporate regulator show that it generated $191 million in Australian sales in 2021, up from $189 million in 2020, and profits increased to $1.8 million, compared with $787,000 the year before. The company’s US listing prospectus, lodged in 2021, revealed the company hit global sales of $US1.4 billion ($2.1 billion) in 2020.

“If you didn’t know it, you would think this company was an Australian start-up – it is built in an Australian way,” Ulukaya said.

Radford said Ulukaya has always trusted the Australian team will do the right thing by the Chobani brand, which has given local employees the freedom to come up with new ideas and products.

The idea for a dog yoghurt, for example, came from an Australian employee who could see how many consumers were giving Greek yoghurt to their pets. When Radford called Ulukaya to launch the product, she was surprised by his openness and enthusiasm.

“He said, ‘Of course, Lyn, dogs are part of our family and they deserve better food too. Why wouldn’t we do that?’ ”

Julie Mathers and a New Zealand-based online wellness retailer HealthPost have acquired the Flora & Fauna and Nourished Life brands from BWX, the beauty giant that collapsed a month ago.

Mathers, who established Flora & Fauna in 2014, has teamed up with HealthPost, to register a new company in New Zealand called The Future Collective.

The new entity will acquire the assets of BWX Digital including IP, websites, data, goodwill and stock across both brands.

“There is a lot of work to do and we will be working at speed to get Flora & Fauna back up and running as soon as we can,” said Mathers.

She added both companies’ values and ethics align and that together with their combined experience, team and infrastructure, the acquired businesses will thrive.

CEO of HealthPost, Abel Butler, said: “We have admired both Flora & Fauna and Nourished Life for a long time and wanted to help these businesses flourish into the future.

“We recognise there is a lot of work to be done; with our experience in e-commerce, health, wellness and natural beauty, we are confident we are the right custodians of these purpose-driven brands.”

HealthPost turns over NZ$35 million per annum and has more than 200,000 customers. The acquisition will triple the current customer base to more than 600,000 customers.

Treasury Wine Estates is stepping up a cost-cutting and restructuring push centred mainly on its division selling commercial wines under $10 per bottle as it braces for tougher economic times and repositions further towards the luxury segment.

The company, which has a workforce of about 2500 people, last week foreshadowed the looming restructure in internal communications and a series of meetings.

The main area being targeted is the Treasury Premium Brands division which oversees affordable labels including Wolf Blass, Lindemans, Squealing Pig, Pepperjack, Wynns, Seppelt and 19 Crimes.

The $15 per bottle (or less) price bracket is under the most pressure across the wine industry as households cut back because of cost-of-living pressures and rising interest rates.

There was speculation that the restructuring could result in up to 200 jobs being removed in a reshaping by 2025. The company declined to comment on specific job numbers, saying it was at an early stage and that part of the process was connected to an existing “2025” strategy.

Treasury Wine Estates chief executive Tim Ford confirmed to The Australian Financial Review that a review is under way. “Like any business, we continually assess our structure and cost base to make sure we’re in the right position to continue to deliver on our strategy,” he said.

“We’re now at the halfway point of our five-year strategy and faced with changing consumer preferences and economic uncertainty in major markets, we’re reviewing the structure in our Treasury Premium Brands division, as well as some other parts of our business”.

He said a new program of work in the review would step up over the coming weeks.

Treasury Wine Estates shares closed on Friday at $13.68. They reached $14.28 in mid-April after a 13 per cent climb over the four weeks from $12.63 on March 20 on the back of optimism about a potential early unwinding of the punishing tariffs slapped on Australian wine exports in late 2020 by the Chinese government.

Australian wine companies, led by Treasury’s big-selling Penfolds brand, built a $1.3 billion annual export business to China but the heavy tariffs cut that back to just $12 million in calendar 2022.

MST Marquee analyst Craig Woolford said last month after an investor roadshow in the US by Mr Ford and his management team, that in the Treasury Premium Brands division, only 61 per cent of revenues is derived from wines above $10 per bottle.

“The dilemma in Treasury Premium Brands is the division accounts for 60 per cent of group-wide volumes, mostly from Australia,” he said at the time. “While exiting some low-end wines may be desirable from a revenue perspective, Treasury Premium Brands helps fractionalise manufacturing overheads across the group.”

He expects there to be “minimal” volume growth in the division, and profit margins in Treasury Premium Brands to be around 13 per cent in 2022-23, compared with Penfolds at 44 per cent. The third division, Treasury Americas, is expected to produce profit margins of 23 per cent. Mr Woolford currently has a 12-month price target of $14.90 on the stock, with future upside largely predicated on whether there is an unwind of China tariffs.

UBS analyst Shaun Cousins has a price target of $15 on the company and also suggests the main near-term catalyst for a share price rise is the potential for changes in China wine tariffs.

Treasury Wines has pursued a diversification strategy, pushing harder in Malaysia, Thailand, Vietnam and Singapore, and then began selling in September last year a locally made version of Penfolds in China, known as One By Penfolds. It is made with grapes from the Ningxia region and sells for around $50 per bottle.

Last year, Sydney entrepreneur Rhian Allen sold The Healthy Mummy business that she founded in her kitchen back in 2010 for $17 million. Now, she is on a mission to help pet owners rethink pet nutrition for dogs and cats.

Allen’s new business venture Healthy Active Pet offers appropriate meal plans, raw dog and cat food, and recipes to help pets live long and healthy lives.

Healthy Active Pet customers can access programs, recipe books, shopping lists and step-by-step cooking guides for a monthly subscription fee of $6.95. Everything is Australian-sourced and Australian-made, including the packaging.

Close to 50 per cent of dogs and 35 per cent of cats are considered overweight in Australia, according to Healthy Active Pet, the premise of which is that to be healthy and live a long life, pets need the correct nutrition. The number one way to deliver the best nutrition for your animal, according to the company, is feeding them a species-appropriate diet, not kibble.

For dogs, this means a fresh food diet that is high in protein and low in carbohydrates.

Healthy Active Pet on a mission to make a difference

Allen, who helped more than 1.5 million mums get healthy and learn about nutrition through The Healthy Mummy, says she is passionate about the health of pets. Her mission is to help educate and inform pet owners about the best health and nutrition choices for their pets.

“I’ve got two dogs and two cats. I’m very passionate about the healthcare space. I think that whether it applies to animals or humans, I think the health and nutrition of our pets and ourselves as humans is so important,” she told SmartCompany.

“Just over 12 months ago I got two puppies and found out they were allergic to chicken. It was a completely new thing for me because I’ve had dogs and cats all my life and never had a problem with chicken.”

Allen said the discovery was eye-opening and inspired her to look into the pet care and pet health industry with food and nutrition. 

“Coming from my background with The Healthy Mummy, I’ve always been so focused on the health of humans, but it never occurred to me about what I was feeding my pets,” she said.

Allen says she wants to make a difference in the pet health and nutrition space.

“The response has been amazing,” she says. “I went into this to do something that I was passionate about and I loved and obviously you always hope that it’s gonna resonate with the consumer. That’s what your hope is and it’s been amazing. 

“It’s only four months in and it already has so much interest, so many customers are purchasing and repeat purchasing as well.

“I’ve got my kids involved in it and getting them to understand how to create a business and teaching them about how to launch and set up and build a business and a brand.

“I think the biggest thing I’ve learned is that there is such an appetite for this. But people need to be educated on it because people don’t know, just like I didn’t know, that what we feed our pets via the big pet food industry isn’t necessarily the best thing to feed our pets.”

Research is key

When asked by SmartCompany what she is doing differently this time with her second business, Allen says she’s chosen a different e-commerce platform, which enables business owners like herself to do so much more in a more cost-efficient way. 

“The great thing for me is that I’ve got a lot of experience in the e-commerce and customer space,” she says.

“So, I do feel that from a starting a business perspective there’s a lot of benefits of having someone like myself who’s got a lot of experience because you don’t make a lot of those mistakes that you’ve probably made the first time round. 

Allen says it is important for any business owner to do their research before embarking on their business journey, even if it’s not their first venture.

“I think that it’s always really worth doing your research before you launch your business because you want to make sure that what you’re going into is something that is going to be sustainable for you,” she says.

“I think a lot of people jump into a business and discover the pitfalls later. So I think it’s really important to research. Also, make sure you get your trademarks done and invest in your trademarks.

“When you’re doing your business, you have to understand that it’s gonna take time to make a profit. You have to invest, you have to invest in your idea, you have to invest in the customer and the reality is it takes businesses a long time. 

“Do your research, know what you’re doing is the right thing, building your customer base, building your brand and really getting behind marketing.”

BoozeBud, the online liquor retailer, has collapsed and entered administration joining a growing list of e-commerce-based delivery services going under.

Established in 2014 by Alex Gale, Mark Woollcott, and Andy Williamson, the company sold a range of beer, wine and spirits products online before being acquired by Carlton United Breweries in 2017.

In 2020, it was sold back to its original founders, Catcha Group and some individual investors.

On Tuesday, the company appointed Michael Brereton and Sean Wengel of William Buck as joint administrators to oversee the sale of the business and its assets. It has stopped taking orders online.

“We have made the difficult decision that the company has insufficient funds to continue operating,” Brereton told News.com.au.

“We have accordingly been forced to stop taking future orders via the online portal… We have also made the difficult decision to lay off staff.”

The administrators aim to secure an investment of funds with expressions of interest sought by May 9.

In December 2021, BoozeBud acquired Get Wines Direct as an independent business which is believed to be unaffected by the decision.

Two weeks ago, BoozeBud’s CMO Dan McMillan, announced on LinkedIn that the brand had completed its site migration to Shopify.

He added the move will enable BoozeBud to become “a leaner, meaner, and more efficient operation with the robust and user-friendly platform.” However, the retailer subsequently abruptly collapsed.

The company’s demise follows the collapse of food-delivery startups Milkrun and Colab last month.

The online pet supplies store Pet Circle has launched an insurance service which offers policies for dogs with coverage of up to $30,000 annually.

Pet Circle co-founder and CEO Mike Frizell (pictured above) said there is a “clear opportunity” as pet parents are “underserved by other pet insurance providers”.

“Our Pet Circle Vet Squad which works in veterinary clinics, told us that many pet insurance policies were not up to scratch, with sub-limits catching out pet parents.

“In fact, about 85 per cent of Australian pet insurance products impose sub-limits that could restrict pets from receiving the best possible treatment.”

The company’s Insurance policies can be personalised with different annual limits for various pets, reimbursements of up to 90 per cent and annual excesses variable from $0 to $150.

To help pets heal from an accident or illness, a 360º Care Optional Extras package can also be added which covers dental illnesses, behavioural problems and supportive therapies like physiotherapy, acupuncture and hydrotherapy.

Marcus Blackmore, the major shareholder in Australia’s largest vitamins company, Blackmores, will sell his 18 per cent stake into a $1.9 billion takeover by beverages giant Kirin Corporation, which wants to diversify away from a shrinking beer market in Japan.

His strong personal backing, and a separate endorsement from the Blackmores board, is crucial for Kirin, which is offering $95 a share via a scheme of arrangement because it reduces the risk of any rival player emerging.

The acquisition, flagged by The Australian Financial Review’s Street Talk column, is part of a major pivot by the Japanese brewer to reinvent itself as a healthcare and pharmaceutical giant as beer demand shrinks in its home market where the population is ageing.

It also wants to shift its emphasis away from alcohol as part of efforts to be seen a more socially responsible company.

Blackmores shares climbed 22 per cent on the ASX to $93.65 by mid-afternoon on Thursday as the prospect of a second big Australian vitamins company being sold to offshore buyers became highly likely.

Big rival Swisse was bought out by Hong Kong-listed group Health & Happiness in a two-step transaction for $1.7 billion in 2015 and 2016, at a time when Blackmores shares charged through $200 each after a profit bonanza as Chinese consumers sought “clean and green” Australian vitamins brands.

“I’m sort of relieved,” Mr Blackmore said on Thursday.

He is the son of Maurice Blackmore, a pioneer naturopath who established Blackmores in 1932.

Marcus Blackmore took the helm in 1975, two years before his father died, and played a crucial role in building the group to be Australia’s No. 1 vitamins brand.

He stepped down from the board in 2020 and has been involved in a bitter battle with most of the board and management since then, lamenting the progress of the company.

He told The Australian Financial Review on Thursday that he was relieved that a good corporate citizen with a strong culture in Kirin would be the new owner, and that the angst between himself and the board and management of Blackmores over the direction of the company would come to an end.

He said he was also glad it would not be owned by one of the private equity groups that had made regular buyout overtures over the past couple of years. His stake is worth $334 million.

“I got fairly comfortable with them [Kirin]. They’re ethical, they’re strong on culture,” Mr Blackmore said. “Private equity, they would have slashed and gone around sacking people.”

Mr Blackmore, who has just turned 78, has been critical of the board and management of Blackmores over the past few years, and said under the current regime it was unlikely that the company would have delivered the growth it was capable of.

“The company just doesn’t have the resources or the strength. I think Kirin is the best bet,” he said.

New Blackmores chairwoman Wendy Stops said the offer price represented “appropriate long-term value”.

The Blackmores board is recommending that shareholders vote in favour of the scheme in the absence of a higher offer. An independent expert will be appointed to assess the offer and shareholders will vote at a meeting to be held in July.

Over the past few weeks there had been continued speculation about Blackmores being a takeover target for private equity groups, or large Japanese players. Mr Blackmore has received overtures from time to time over the past few years because his stake was crucial to any buyout.

He said his late father had always had a long-term vision of turning Blackmores into the No. 1 vitamins company in the world, and with Kirin’s backing that had more chance of becoming a reality.

The bid documents show his personal stake is 3.52 million shares in the company, worth $334 million at the bid price. There is also a smaller holding in a charity foundation.

Asahi, the Japanese beverages giant that also runs a health science division, made approaches some time ago, but those talks stalled.

Kirin, which owns the Lion beer business in Australia, producing brands including XXXX Gold, Tooheys, West End and Furphy, has been expanding overseas into health drinks and probiotics. It is listed on the Tokyo Stock Exchange and has a market capitalisation of $23 billion.

Kirin announced a three-year business plan last year to invest heavily in research and development and expand in health sciences. Blackmores also offers a strategic advantage because it gives Kirin access to markets in China and South-East Asia where it is not so strong.

“In the health sciences area, Kirin is strong in Japan while Blackmores has a strong presence in Australia, China, and South-East Asia,” senior executive Takeshi Minakata told reporters in Tokyo.

The takeover will need Foreign Investment Review Board clearance.

‘Pretty difficult past couple of years’

The bid comes after an extended period of disquiet last year between Mr Blackmore and the Blackmores board when it was run by previous chairwoman Anne Templeman-Jones.

“It’s been a pretty difficult time for me over the past couple of years,” Mr Blackmore said. During the COVID-19 pandemic, he said, the company had terminated the employment of a lot of its in-house naturopaths who refused to be vaccinated against COVID-19.

“That took a lot of good people out of the business. It was just devastating for me to see that happen.”

Ms Stops, who became chairwoman on November 25, extended the olive branch to Mr Blackmore.

She replaced Ms Templeman-Jones, who had been at the head of the boardroom for two years and with whom Mr Blackmore had what he describes as a “poisonous” relationship.

Ms Stops is also on the board of supermarket giant Coles Group.

Private equity groups seized on the disharmony and early in 2022 there was an approach to try to prise away Mr Blackmore’s shareholding, but that went nowhere because of the upheaval caused by the Russian invasion of Ukraine.

Blackmores was a sharemarket darling in 2016 as booming sales to China pushed profit to a record and lifted its shares to $220. But the ban on tourists to Australia at the beginning of the pandemic in early 2020 and the exit of daigou traders resulted in the stock slumping to about $60 each in early September 2020.

Blackmores chief executive Alastair Symington took the helm in late 2019 at Blackmores after working in Dubai with Coty, owner of brands such as Max Factor and Cover Girl. He had previously worked in executive positions in the consumer goods and health and beauty segment with companies including Nestle, Gillette and Procter & Gamble.

The United Nations food agency’s world price index rose in April for the first time in a year, but is still some 20 per cent up on a record high hit in March 2022 following Russia’s invasion of Ukraine.

The Food and Agriculture Organization’s (FAO) price index, which tracks the most globally traded food commodities, averaged 127.2 points last month against 126.5 for March, the agency said on Friday. The March reading was originally given as 126.9.

The Rome-based agency said the April rise reflected higher prices for sugar, meat and rice, which offset declines in the cereals, dairy and vegetable oil price indices.

“As economies recover from significant slowdowns, demand will increase, exerting upward pressure on food prices,” said FAO Chief Economist Maximo Torero.

The sugar price index surged 17.6 per cent from March, hitting its highest level since October 2011. FAO said the rise was linked to concerns of tighter supplies following downward revisions to production forecasts for India and China, along with lower-than-earlier-expected outputs in Thailand and the European Union.

While the meat index rose 1.3 per cent month-on-month, dairy prices dipped 1.7 per cent, vegetable oil prices fell 1.3 per cent and the cereal price index shed 1.7 per cent, with a decline in world prices of all major grains outweighing an increase in rice prices.

“The increase in rice prices is extremely worrisome and it is essential that the Black Sea initiative is renewed to avoid any other spikes in wheat and maize,” said Torero, referring to a deal to allow the export of Ukrainian grain via the Black Sea.

In a separate report on cereals supply and demand, the FAO forecast world wheat production in 2023 of 785 million tonnes, slightly below 2022 levels but nonetheless the second largest outturn on record.

“(The) 2023/24 prospects for rice production along and south of the equator are mixed, largely due to the regionally varied impact of the La Niña event,” FAO said.

FAO raised its forecast for world cereal production in 2022 to 2.785 billion tonnes from a previous 2.777 billion, just 1.0 per cent down from the previous year.

World cereal utilisation in the 2022/23 period was seen at 2.780 billion tonnes, FAO said, down 0.7 per cent from 2021/22. World cereal stocks by the close of the 2022/2023 seasons are expected to ease by 0.2 per cent from their opening levels to 855 million tonnes.

Fine-dining restaurant meal delivery platform Providoor, founded by celebrity chef Shane Delia at the start of Covid-19, has been forced to close its doors and is likely to be plunged into liquidation.

The shock closure leaves dozens of staff out of a job and high-end restaurants across Melbourne, Sydney and Canberra without the popular home delivery service.

Investors and administrators behind the meal delivery business were working overnight to rescue the company – which was cash flow positive and had only recently raised millions of dollars in new funding – but the decision by one backer to retrieve their investment looks to have sunk Providoor and forced it into immediate liquidation.

It is expected Providoor’s 15 employees will be told this morning that the company was closing, despite the best efforts of founder Mr Delia and other high-profile investors in the company such as the co-founder of employment website Seek, Andrew Bassat, and its chief executive, former eBay boss Tim Mackinnon.

It is also unclear what will happen to the huge number of Providoor vouchers customers are holding and if they can be redeemed.

Providoor had quickly established itself as a high-end restaurant meals delivery service in the weeks following the first pandemic lockdowns in Melbourne in 2020 and soon spread to Sydney and Canberra where it sold meals prepared by well-known premium restaurants for people to enjoy at home.

Top restaurants that used Providoor as their meal delivery service included Mr Delia’s Melbourne eatery Maha where the idea began and other restaurants backed by celebrity chefs including Supernormal, Rockpool, Gwen, Spice Temple, Grossi, Three Blue Ducks, Chiswick, Xopp, The Fold and dozens of other popular establishments.

Providoor was the brainchild of well-known chef Shane Delia who kickstarted the meal delivery business in late-April 2020 in Melbourne as a response to the sudden Covid-19 pandemic restrictions and lockdowns which saw in-house dining banned in restaurants for an extended period.

“It is with a heavy heart that I announce the closure of Providoor, a business borne out of the very worst days the hospitality industry has ever seen,” Mr Delia said.

“While today is a very sad day, I am proud of Providoor and what it has achieved. When people kept using Providoor after social restrictions were lifted, it showed us that it was a really good idea. I just wish it had been given the opportunity to work through the challenging economic conditions, the same facing so many in the restaurant and hospitality sector right now.

“Sadly the Providoor story comes to an end. I want to acknowledge the team, the advisers and our valued restaurant partners who all worked so hard to make Providoor a success.”

Mr Delia, a chef and restaurateur, came up with the idea two days after the cancellation of the 2020 Melbourne Grand Prix after he was forced to send his restaurant staff home due to the restaurant closures.

The owner of well-known Melbourne restaurant Maha had spied a gap in the market where meal delivery services such as UberEats were servicing fast-food and other basic restaurants but that many consumers were looking for a high-end meal experience from their favourite premium eateries.

Since commencing operations, Providoor has made more than 1.2 million meals deliveries and became a major player in Australia’s meal kit sector with 70 restaurants on its platform delivering tens of thousands of meals a week.

Cashflow positive and eyeing off an expansion into Brisbane and the possibly overseas, in November 2021 Providoor went to the market for a selective capital raise seeking between $3m and $15m to fund international expansion plans.

It is believed Providoor had over $5m in the bank when one of the investors exercised a contractual caveat to claim those funds back and despite drawn out negotiations and attempts to save the business this week and which went late into Thursday night it has been tipped into liquidation.

When Mr Delia spoke to The Australian in November 2021 on the appointment of a full-time professional CEO for Providoor, he was upbeat about the huge opportunities for the expansion of the fine-dining meal delivery platform that delivered high quality restaurant meals to people at home.

“We have ambitions to be a global delivery platform and so we need a global player, we want to create a world class team.

“I’m a chef, I’m a restaurateur, I’m a founder of Providoor and my skills set is based on customer experience and relationships.”

Vitasoy, one of the earliest brands to introduce soy milk to the Australian market, recently found itself in the centre of a corporate kerfuffle between two global food and beverage giants that created headlines.

The company’s Hong Kong parent company Vita International blindsided Australian dairy giant Bega in October by suddenly announcing it was exercising its right to acquire Bega’s 49 per cent stake in the plant-based milk company, a joint venture between the two struck up in 1999.

However, local chief executive David Tyack is confident not much will change as a result of the new ownership restructure.

But Tyack is hoping to make a splash in other ways. Vitasoy will have to pull off something shy of a brand reinvention if it is to overtake key competitors in the soy milk market – Vitasoy’s “heartland” – against popular rivals Bonsoy, So Good, PureHarvest and Australia’s Own.

And then there is the broader challenge of soy milk’s declining popularity in the face of gathering momentum behind oat milk, which industry leaders (Tyack included) believe will one day overtake soy and almond.

The chief executive, who has led Vitasoy’s Australian operations since September 2019, is under no illusions about the challenges the brand and the business face.

“We were late to the party and we’re trying to play catch-up,” Tyack said of almond milk. Vitasoy introduced an oat milk product 16 years ago and enjoys market leadership in supermarkets but not in cafes. Since Tyack joined the company four years ago, he’s watched the oat milk business expand tenfold in a strong signal that oat, not soy, is key to the future growth of the brand and its stable of products.

Developing brand equity will be Tyack’s biggest challenge. Vitasoy, backed by the $2.7 billion listed parent company, is a well-known brand in Hong Kong, China and other Asian markets, but it has struggled to develop the same currency among Australian consumers despite establishing a local presence 25 years ago.

“We got some work to do to make sure we can still compete with the new, shiny hip people on the block, too,” Tyack said.

“We think there’s value in that master brand for us, even though it includes the word ‘soy’, as being a trusted and known brand.”

The plant-based beverage business has enjoyed high single digit growth over the past few years, according to Tyack, but Vitasoy will have to pick up the pace if it is to hold its own against a competitive landscape and create demand in a declining category.

“We have to be at that level of growth. Otherwise we’re falling away with relevance and [lose] market share.”

The profitability of Vitasoy’s Australian operations is slipping. Its latest annual report lodged to ASIC reveals profits after income tax for the 2022 financial year was $3.7 million, down from $4.2 million in 2021.

Yet, there’s a reason why Vita International paid Bega $51 million to claim full ownership of the company. Despite the market headwinds, Vitasoy Australia punches above its weight within the Vitasoy business itself. Mainland China represents the majority (60 per cent) of Vita International’s turnover, followed by the Hong Kong market at 25 per cent. Australia takes bronze with 8 per cent.

“We’re the most developed Western market for the group,” says Tyack. “We also lead in some other ways.”

Vitasoy Australia has been expanding its plant-based products outside of milk and has found success in its soy yoghurt range, sold in Woolworths, and a range of ready-to-drink bottles of coffee and chocolate with plant-based milk.

The local operation, which has a manufacturing site based in Wodonga, is also a production powerhouse: it exports products back to Hong Kong, Singapore, the Philippines, Taiwan and the Middle East.

But Tyack is devoting most of his energy to making a splash Down Under.

“We recognise that with the influx of global brands, new entrants, you’ve got to keep pace with what the sensory experience is. We’re constantly in internal comparisons with new offerings,” he says.

“Are we at the marketplace with our service, price and quality offer? If we’re not, reformulate.

“We know we’ve got some room to grow in improving our soy offer ... Bonsoy is a very good milk coffee offer ... We’ve got room to improve our almond offer ... There’s still room to improve the oats offer, too.”