The Oreo cookie is now the bestselling snack biscuit in China, but it took the iconic American brand five years—and a recipe overhaul—to reach this status. Irene Rosenfeld, CEO and chairman of Mondelēz International, maker of Oreo, shared the story behind the snack's success with students at the Yale School of Management and elsewhere in the Global Network for Advanced Management on April 19.
Taking an established American brand into an emerging market requires a careful assessment of the local landscape and tastes and a flexible approach to your product's place in it, Rosenfeld said. Oreo failed when it was first introduced in China because Chinese consumers found it too sweet and too big, she said. So Mondelēz International tweaked the snack, making it less sweet, incorporating a familiar wafer format, and introducing a popular green tea flavor. Over the past five years, Oreo revenues have grown more than tenfold in China.
The secret to success in all global markets is tailoring your product to meet local tastes, Rosenfeld said. "There's got to be a balance. We call it 'glocal.' It's the global together with the local that's the winning brand."
Rosenfeld spoke as part of the Leaders Forum lecture series, in a talk streamed live to schools in the Global Network. Students at Renmin University in Beijing participated in the conversation via videoconference.
Rosenfeld began her career in consumer research before joining General Foods, which later became part of Kraft Foods. She left in 2004 to serve as chairman and CEO of Frito-Lay, but returned to Kraft as CEO in 2006.
When she came on board as CEO, Rosenfeld said, Kraft's stock price was flat and its market share had stagnated. "The lifeblood of a consumer company is innovation, and it really had slowed dramatically," she said.
In 2012, Rosenfeld spun off Kraft's North American grocery operations into an independent company. That company retained the Kraft Foods name, while the global snacks business was rechristened as Mondelēz International, which markets its snacks in 165 countries with billion-dollar brands such as Cadbury and Milka chocolate, Jacobs coffee, Nabisco cookies and crackers, and Tang powdered beverages.
Rosenfeld said she split Kraft so the two companies could better focus on their unique markets: the North American warehouse grocery business and the global snack foods business. The split enabled the newly created Mondelēz International to expand its snacking footprint in emerging markets.
"It's played out essentially the way we thought," Rosenfeld said. Pre-split, about 13% of Kraft's business was in emerging markets; today, emerging markets represent about 40% of Mondelēz International's revenues.
Rosenfeld's strategy to revitalize the company also involved changing top leadership, setting higher benchmarks for productivity and accountability, and creating a culture based on a shared sense of purpose as well as honest, open communication. "Our core values are very simple, but they have a very profound impact on helping to guide people," Rosenfeld said. "The right people and clarity of purpose were really important."
Watch the talk: