One of America’s favourites – the Oreo cookie was first created back in 1912 in a Nabisco bakery in New York City. Over 101 years, it has grown to global annual revenues of $1.5billion and is available in more than 100 markets. However, back in 1990’s ‘America’s favourite cookie’ had reached maturation in the US market and the owners, Kraft, decided to expand east to China in 1996. Nine years after the launch, the biscuit was not a success and they decided to research why not. A number of findings were concluded:
One of America’s favourites – the Oreo cookie was first created back in 1912 in a Nabisco bakery in New York City. Over 101 years, it has grown to global annual revenues of $1.5billion and is available in more than 100 markets. However, back in 1990’s ‘America’s favourite cookie’ had reached maturation in the US market and the owners, Kraft, decided to expand east to China in 1996. Nine years after the launch, the biscuit was not a success and they decided to research why not. A number of findings were concluded:
- The Chinese were not big cookie eaters and therefore had no affiliation with the shape nor the tradition of eating cookies
- They found the product recipe was a little too sweet and a bit too bitter
- Price was also an issue, with the packs of 14 cookies retailing for 76c.
Following the research, the product, price and positioning was changed. Twenty different varieties were researched and a modified recipe was introduced which differed substantially from the US version. The ‘Chinese’ Oreo is now four layers of wafers filled with vanilla and chocolate cream, coated in chocolate. New varieties for the market were launched and exist today – Oreo green tea ice cream and Oreo double fruit.
Kraft introduced smaller pack formats at a lower price point.
A key insight from the research was the trend towards eating more dairy in China. Kraft undertook a localised campaign to educate the Chinese about the tradition of eating Oreos with milk. It worked – China is now the number two market for the brand.
The company used these learnings to enter the Indian market, click here for more information on this and the Chinese launch.
Hershey’s undertook to launch their first ever new product outside the US in China. The key learning from these big brands is the importance of doing the groundwork before entering a new market and one size does not fit all.
Source: BordBia – Going Global Means Going Local
