Can you imagine a world without Oreo cookies? Anyone who has taken one and dipped it into a glass of milk before popping it into his or her mouth to savor the flavor would shudder at the thought of such a scenario.
But when Irene Rosenfeld returned to Kraft Foods in 2006, she found that the company was on verge of delisting the Oreo brand in China.
“We took a U.S. product and jammed it down the throats of the Chinese consumer,” Rosenfeld says. “We were losing money, and it was a very unattractive proposition. We had a $60 million factory in Beijing, which was sitting empty because sales had not materialized. So we were about to delist the product.”
Rosenfeld and her team at Kraft decided to reach out to people in China before taking such a drastic move. They asked what it would take to make the Oreo brand a success in their country.
“They very quickly told us that the product was too big and too sweet for the Chinese consumer,” Rosenfeld says. “When we allowed our local managers to redesign our product for the local taste and local customs, we had a phenomenal turnaround.”
The Chinese Oreo is smaller and less sweet and actually comes in a green tea flavor. It’s not at all what American consumers want when they open their package of Oreos, but different cultures have different tastes. Rosenfeld knew in that case she needed to adapt to earn the business of the Chinese consumers.
The effort has paid off thanks in part to China’s own Yao Ming, a former star basketball player in the United States.
“Who is the best symbol in China but Yao Ming?” Rosenfeld says. “He’s our spokesman, and we actually go to the local guy. It has been a phenomenal business in China with almost $800 million of the $2 billion business from Oreo worldwide,”
The willingness to adapt played a large part in the move completed last fall to split Kraft into two groups. Kraft Foods Group now holds the company’s North American grocery business, which is led by iconic brands such as Oscar Mayer and Maxwell House.
Kraft Foods Inc. is now Mondelez International Inc. and will focus on high-growth global snacks.
“Our dream for this company is to create delicious moments of joy,” says Rosenfeld, chairman and CEO for Mondelez. “The opportunity for us is to create a $36 billion start-up. It’s an opportunity to take an incredible roster of brands that are household names, brands like Oreo, Ritz, Chips Ahoy, Trident and Cadbury, and put those together.”