Serving diverse appetites

by Meyer Sosland
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Founded 60 years ago as the Hong Kong Flour Mill, Lam Soon Hong Kong Group has grown from a traditional flour milling company into a leading specialty flour manufacturer supplying customers across China, Hong Kong, and Macau. Lam Soon Hong Kong Group is now made up of three divisions — flour, edible oil and detergent — and has many industry-leading brands.

Lam Soon’s flour division has five plants across China with its headquarters in Hong Kong. The five facilities have a daily total wheat processing capacity of 4,800 tonnes. The majority of Lam Soon flour is bagged and sizes range from 350 g, 500 g, 1 kg to 25 kg and 50 lbs.

“Like many other local organizations, Lam Soon has grown under the rapid economic development of Hong Kong,” Joey O’Young, general manager of the Lam Soon flour division, told World Grain in a recent interview. “The unique mix of food cultures due to the increasing diversity of immigrants in Hong Kong has required not only a mere steady supply of food staples but a variety of customized wheat flour to pair with different cuisines.”

Diversity, rapid development and other factors have helped Lam Soon transform itself into the modern food company it is today.

“This achievement is attributable to the emphasis we pay to product quality, customized service standards as well as staff development, which are the key elements of Lam Soon’s corporate culture,” O’Young said.

Today the company’s flour division has a diversified sales network with more than 10 regional and city offices. The Lam Soon flour division uses more than 200 distributors, covering more than 30 provinces and cities in China, Hong Kong, and Macau.

“In order to meet the different demands across various sales channels, Lam Soon has adopted different strategies and service packages to meet with its customers’ demands. Along the course of bulk flour supply to major industrial accounts, Lam Soon secures a steady, good quality wheat supply while at the same time couples with an effective production planning to ensure consistency in product supply and quality for its customers,” O’Young said. “In the retail and food service areas, the R&D and technical services teams of Lam Soon have been operating effectively and through site visits, technical support as well as customer product training. Lam Soon is able to weather challenges brought along by new food trends and new product expectations from these sectors.”

A global trend that is replicated in China is the urbanization of the nation’s population. This massive shift of people from the traditional rural existence to the fast pace of city life has impacted the dietary demands of many Chinese citizens. “Urbanization in China definitely has brought along new food consumption trends,” O’Young said. “For instance, hectic lifestyles generally couple with an increase in fast food consumption. On the other hand, health conscious middle class and those well-heeled businessmen are also looking for functional food items and dietary supplements for nutritional balance in order to nullify the negative impacts generated by fast food and sedentary lifestyle.”

In addition to fast paced economic growth and urbanization of its population, China is also experiencing a shift in demographics that has elicited a stronger demand for higher quality food products and an increased receptiveness to foreign food cultures. Lam Soon said that it has seen an increased emphasis on food safety, functional foods as well as other dietary-balanced food items on the health platform.

“Sizing up the abovementioned trends, Lam Soon is prepared to meet these new market requirements by incorporating cereal technology and ingredient science into flour milling to churn out new series of products with distinct features and functionalities. This is epitomized by new products like multi-grain bread premix, whole meal flour, frozen dough flour, gluten-free bread/cake flour as well as fortified flour,” O’Young said.

Established, growing brands

Lam Soon’s flour division produces three primary types of flour — bakery, noodle and soft — in four levels of quality — premium, high, middle and economy — under 12 core brands.

• Premium grade brands — Golden Statue, Crown and American Roses;

• High grade brands — Golden Coins, Locomotive and L’Arc de Triomphe;

• Middle grade brands — Horse Head, Bicycle and Gold Fish; and

• Economy grade brands — Flying Tiger, Blue Bird and Double Peach.

“Our specialty flour products are produced according to specific customer and market needs and are distributed via different sales channels,” O’Young said. “All of our products in different segments have been designed with unique performances and other requirements are formerly answered including premium products customized for hotels and artisan bakery chains while our cost-competitive products are ideal options for catering and major food manufacturers. In the retail area, the recent launch of our premium premix series for home baking has offered consumers of varying skill levels enjoyment by consistently delivering high success rate.”

While Lam Soon has recently made a push into the business-to-consumer flour and premixes market a priority, the core of its business is in industrial sales.

“The bulk of our sales are from industrial customers, mainly from catering, food manufacturers and key accounts of different industries,” O’Young said. “The rest of the sales are from other special channels and the newly launched consumer packs.”

Lam Soon is a strong player in many of the areas it serves. “We are currently the market leader of Hong Kong and one of the major suppliers in premium segments in China. We provide products and services to international customers as well as local major players.”

In an effort to stay competitive and maintain sustainable growth, over the past nine months Lam Soon has launched several premix formulations and various types of small pack flour for the business-to-consumer sector.

Under the Golden Statue brand, Lam Soon is selling 10 different premixes and flours to the consumer market. The Golden Statue brand products are multi-grain bread premix, rye bread premix, whole meal bread flour, danish bread flour, self-rising flour, noodle flour, milk bread premix, steamed/butter cake premix, cookie premix and pineapple bread premix. Under the American Roses brand, Lam Soon is selling consumers a scone premix and a muffin/cake premix.

Strategically located mills

Lam Soon has created a network of five flour mills in four Chinese provinces — two in Jiangsu province and one each in the provinces of Sichuan, Shandong and Guangdong.

In 1995, Lam Soon’s first flour mill, namely Shekou Lam Soon Flour Mills Co. Ltd., was established in Guangdong Province. The Shekou facility was the first in China equipped with Swiss-built Bühler MDDO-300MM flour milling machines. Subsequently in 2003, Lam Soon partnered with Bühler and built the first premix plants in China at its Shekou facility.

In an effort to expand Lam Soon flour business nationwide into China, Lam Soon established Jiangsu Lam Soon Flour Mills Co. Ltd. in Jiangsu Province in 2002, Lam Soon (Shandong) Food Co. Ltd. in Shandong Province in 2007, Jiangsu Lam Soon Food Co. Ltd. in Jiangsu Province in 2009, and Lam Soon (Sichuan) Food Co. Ltd. in 2011 in Sichuan Province.

The mills are strategically located along waterways, railways and/or express ways, and within deliberate proximity to Lam Soon’s customer base, population centers,
and materials.

Lam Soon’s investments in production infrastructure in well-placed locations and distribution network expansion in China over recent years has positioned it for a more flexible growth path. The company said it is able to optimize utilization of its increased flour production capacity by developing the mid-range and commodity flour segments and bringing forth new innovative products to reduce production cost and increase productivity.