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Classic U.S. munchies get odd twists overseas
Question of the Day
Russians prefer their Lay’s potato chips dusted in caviar and crab flavors. The Chinese like their Oreos stuffed with mango and orange cream. And in Spain, Kellogg’s All-Bran cereal is served floating in hot coffee instead of cold milk.
Americans might get squeamish at the thought of their favorite snacks being tweaked, but what works in the U.S. doesn’t always work everywhere else.
In other words, Lee Linthicum, a market researcher, said: “It can’t be some generic mix of spices that might fool an American.”
Food makers long have tinkered with their products to appeal to regional tastes, but getting the recipe just right is becoming more important than ever. That’s partly because people in developing nations such as China and India are gaining more of an appetite for American-style “on-the-go” foods as they work longer hours and have less time to cook. But it’s mostly because snack makers increasingly are looking for growth in other parts of the world as sales slow at home.
Growth in the snack food industry has been virtually flat in the U.S. for the past two years, according to market research firm Euromonitor. Meanwhile, combined sales in China, Brazil and Russia — three major developing markets — rose 15 percent in 2010 and 11 percent last year to $17 billion. That is half the size of the U.S. market, but it’s growing.
The challenge for snack makers is that people in other countries have different tastes. Consider the Oreo, which Kraft Foods Inc. introduced in China in 1996. Sales of the vanilla-cream-filled chocolate cookie sandwich were respectable there, but the Chinese didn’t completely take to it.
So Kraft decided to tweak the Oreo. But executives of the Northfield, Ill.-based company knew they had to proceed with caution. “When you have a brand that’s 100 years old, you don’t mess with the recipe thoughtlessly,” said Lorna Davis, head of the company’s global cookies business.
In 2006, Kraft began offering the Oreo as a wafer, a popular cookie throughout Asia. It is made up of cream sandwiched between crispy wafers. The plan was to help familiarize more Chinese customers with the brand. Three years later, the company went a step further.
Kraft worked with a panel of consumer taste specialists from around the world to identify the characteristics of the Oreo — including color, crunchiness, bitterness, color — that were likely to appeal to Chinese consumers. Executives learned through research that the Chinese don’t like their treats as big or as sweet as Americans do. So the company rejiggered the recipe to create a cookie that was a tad smaller and a touch less sweet.
To test the recipe, hundreds of Chinese consumers tasted the new Oreo. It was a hit.
“It made us realize the smallest of details make a big difference,” Ms. Davis says.
But the company wasn’t finished. After noticing sales of Oreos were lagging in China during the summer, Kraft added a green tea ice cream flavor. The cookie combined a popular local flavor with the cooling imagery of ice cream. The green tea version sold well, and a year later, Kraft rolled out Oreos in flavors that are popular in Asian desserts — raspberry and blueberry, and mango and orange.
The result? Over the past five years, Kraft said, sales have grown an average of 60 percent a year, although it declined to give revenue amounts. The Oreo now is the top-selling cookie in China with a market share of 13 percent. The previous top cookie was made by a Chinese company.
Kellogg Co., the world’s largest cereal maker, also has intensified its focus on catering to local tastes as it attempts to expand its snack business overseas.
Last year, the company’s revenue in Latin America topped $1 billion for the first time. In February, Kellogg said it agreed to buy the Pringles chip brand from Procter & Gamble Co. for $2.7 billion. The deal will nearly triple its international snack business, making it the world’s second-largest snack maker behind PepsiCo Inc.
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