Julian Arnold was the U.S. commercial attache to China in 1936, when he gave a talk about the virtues of the soybean.
He called it “The Cow of China,” explaining that the legume packed just as much nutrition as milk. The speech so inspired Lo Kwee-seong that he founded his own soy milk company four years later in Hong Kong, billing it as a nutritional supplement because the working class couldn’t afford milk during war time.
Today, Vitasoy International Holdings Ltd. sells its products in 40 markets, from the U.S. to Australia, with mainland China accounting for more than half of its revenue. Shares of the soy milk maker have surged more than 3,500 percent since the company’s 1994 initial public offering, and eight members of the Lo family are reaping the rewards. They’re worth a combined $1.5 billion, according to the Bloomberg Billionaires Index.
A spokeswoman for the company declined to comment.
The global soy milk market reached $15.3 billion in 2018, and sales of flavored soy milk are expected to grow 6.3 percent annually from 2019 to 2025, according to an April report by Grand View Research Inc.
Vitasoy, a supplier for coffee giant Starbucks Corp., is now one of Hong Kong’s most recognizable brands with its products sold in convenience stores, supermarkets and online. Its shares, which climbed to a record last week, have surged 44 percent this year, trouncing the 3.5 percent gain for the benchmark Hang Seng Index.
Vitasoy posted revenue of HK$4.45 billion ($567.6 million) for the six months ended Sept. 30, a 22 percent increase from a year earlier, and a “promising growth outlook” should attract more institutional investors, said Alice Leung, a Hong Kong-based analyst at KGI Securities Co. “The company has demonstrated a solid track record.”
Lo died in 1995, a year after the IPO, when Vitasoy had a market value of about $200 million. Several other family members are still involved in the firm, including his son Winston, who’s the chairman. Winston’s sister Yvonne, nephew Peter and daughter May are directors. Peter is also chief executive officer of restaurant operator Cafe De Coral Holdings Ltd. Today, Vitasoy is worth about $5.8 billion.
As the company approaches its 80th birthday, Hong Kong has become a mecca for billionaires and multimillionaires. Vitasoy has re-branded its soy milk products as a healthy and natural food just as many Asians are finding they struggle with lactose intolerance, according to the U.S. National Library of Medicine. It has also diversified to offer tofu, purified water, juices and lemon tea, a must-have summer quaff for young consumers in Hong Kong and mainland China.
Victoria Mai, a 25-year-old civil servant from Dongguan in southern China, said she buys 24-count packs of soy milk and lemon tea every three months.
“Vitasoy drinks have a magical effect on me,” she said. “It refreshes me whenever I feel exhausted from work.”