A 'Glocal' Approach
Oreo enters 100th year crossing the $2 billion mark
Published in CSP Daily News
NORTHFIELD, Ill. -- Turning 100 on March 6 has not slowed down brand Oreo, which grew nearly 25% in 2011. And that momentum continued into first-quarter 2012, Kraft Foods Inc. said, with Oreo growing double digits in North America and nearly 40% in Europe and developing markets.
Irene Rosenfeld, chairman and CEO, said, "Oreo has had average growth of more than 17% annually since 2006. It surpassed $2 billion in annual revenues in 2011--doubling sales over just five years ago."
For its first seven decades, Oreo was primarily a North American brand, with limited expansion into developing markets. And while the brand grew double digits in developed regions like North America and Europe in 2011, developing markets is now the brand's leading growth engine. Today, Oreo is sold in about 85 developing markets from China and India to Argentina and Mexico. Over the past five years, Oreo has grown nearly 37% on average annually in developing markets, including gains of 50% in 2011. The brand is on track to reach $1 billion in annual revenues in developing markets this year.
The original Oreo cookie has not changed much since its introduction--two round chocolate cookie wafers joined by sweet vanilla creme filling. It remains the top-selling variety of Oreo cookies worldwide.
But using a "glocal" approach that combined the best of global with the best of local, Oreo tapped into local market insights to grow sales incrementally with innovative local flavors, forms and limited-edition seasonal items. Today Oreo comes in a variety of local flavors in markets around the world, such as Oreo green tea ice cream in China or Oreo Duo in Argentina with banana and dulce de leche creme. Oreo also is enjoyed in fun shapes and forms such as Triple Double Oreo in the United States, Oreo Wafer Rolls in China and the Oreo Trio in Mexico. In the United States, Oreo offers seasonal items, including those celebrating Halloween, spring and American football.
Over the years, the makers of Oreo learned that the iconic "twist, lick, dunk" ritual was famous around the world. So the brand launched the first "moments" television advertising campaign in 1989 that captured the unique connections shared over Oreo and milk. But for many years, the campaign in other markets consisted of U.S. ads that were quickly treated with a local voiceover or reshot with local talent. Beginning in 2008, the brand introduced ads that told culturally relevant, local stories, all the while keeping the global "twist, lick, dunk" framework at the forefront.
In 2009, the company took the brand's global appeal to Facebook. Originally an English language community, Oreo soon created a truly global community reaching fans from more than 200 countries in 10 different languages. Oreo then began customizing its messaging to reach consumers in their local language about Oreo news in their local markets. As a result, Oreo is among the top five most popular brands on the social media site, with a Facebook community of more than 25 million fans.
Kraft accelerated Oreo growth with several acquisitions that increased the brand's global footprint across Europe, Latin America and Asia. In 2006, it acquired the Spanish and Portuguese operations of United Biscuits while regaining rights to all Nabisco trademarks, including Oreo, in the European Union, Eastern Europe, the Middle East and Africa. In 2007, Kraft acquired Danone's global biscuit business, giving Oreo a bigger footprint and enhanced biscuit capabilities in critical emerging markets such as China, Russia, Poland, Indonesia and Malaysia. Finally, the acquisition of Cadbury in 2010 increased the brand's global scale and distribution and enabled the launch of Oreo in India.
Northfield, Ill.-based Kraft Foods is a global snacks company marketing biscuits, confectionery, beverages, cheese, grocery products and convenient meals in approximately 170 countries, Kraft Foods had 2011 revenue of $54.4 billion; 12 of the company's brands--Cadbury, Jacobs, Kraft, LU, Maxwell House, Milka, Nabisco, Oreo, Oscar Mayer, Philadelphia, Tang and Trident--generate revenue of more than $1 billion annually.