Dairy Farm was incorporated in Hong Kong by Scottish surgeon Sir Patrick Manson and five prominent Hong Kong businessmen with 80 heads of cattle and a capital of HK$30,000. The Company's founding objectives were threefold: to improve the health of Hong Kong people by supplying clean and uncontaminated cows' milk; to half the price of milk by breeding a herd of imported dairy cattle locally; and to realize a profit for its shareholders.

The original farm was established at Pokfulam and staffed by British livestock experts. Initially the Dairy Farm pioneers had to contend with disease in the herd and other problems caused by the unfamiliar climate. Undeterred by these challenges, they persevered and soon achieved a thriving enterprise.

The Company established its depot, later to become Hong Kong's most well known ice house, at the corner of Lower Albert Road and Wyndham Street. This move was a result of its continuing success - greatly increased production and demand necessitated curtailing the four-mile transport of milk by handcart from the farm to customers in the Central District. The old depot building is today a Hong Kong landmark and is presently home to the Foreign Correspondents' Club.

With over 15,000 European residents in Hong Kong, demand for Dairy Farm milk rose steadily. The Company achieved profitability again after an outbreak of rinderpest, a lethal cattle disease, in 1896.

Dairy Farm introduced fresh butter imported from Australia to Hong Kong.

Dairy Farm began importing frozen meat and opened its first retail store at the Central District depot.

In addition to a head office and provision store, the Central depot by now had expanded to include a butchery, a pie-making section and a delicatessen. Dairy Farm's 30th year of operations reported a net profit of HK$125,013.

A second store opened at Nathan Road, Kowloon. World War I was raging throughout the world by this time, yet the Company continued to perform well and embarked on a new venture - ice production to service Hong Kong's fishing boats.