Oreo: how a global brand adapted to local tastes

oreoOreo is the world’s favorite cookie in more than 100 countries worldwide. The Nabisco division of Mondelez International had more than $2 billion in global annual revenues for its Oreo brand. In 2012, Oreo celebrated its 100th birthday. While the cookie continues to be the most popular in the United States, new exotic flavors are sweeping the globe. Oreo’s Facebook page has more than 38 million followers from around the globe.

Mondelez’s ability to adapt to local tastes is important as it continues to look for overseas growth. In 2014, Mondelez’s international revenues more than doubled compared to its U.S. revenues. Oreo’s biggest markets ranking in order are United States, China, Venezuela, Canada, Indonesia, Mexico, Spain, Central America and the Caribbean, United Kingdom and Argentina.

Global companies face a critical question when considering to enter a new market: how far should they go to localize their offerings to appeal to the local consumer? Mondelez introduced Oreo cookies to Central and Latin America in 1928 and then to Canada in 1949. In 2006, Mondelez offered a wafer cookie to Chinese consumers to familiarize them with the brand. Three years later, Mondelez worked with a Chinese consumer panel to determine the right combination of color, crunchiness, and bitterness to appeal to their tastes. The company re-engineered the traditional Oreo to be smaller and not so sweet. When Mondelez noticed their sales lagging, they introduced a green tea Oreo flavor in China that evokes eating ice cream by featuring a cooling sensation in the cream. Oreo is now the top-selling cookie in China with a market share of 13 percent.

Asia also has fruit duo Oreo cream fillings which include the side-by-side flavors of oreo chineseraspberry, blueberry, orange, mango, peach, and grape. In Indonesia, Oreo offers a chocolate and strawberry duo cookie. Meanwhile in Argentina, Oreo has introduced cookies with dulce de leche and banana cream filling. In Mexico, Oreo has three different combinations of chocolate with different chocolate flavored wafers as well as a cocoa cream filling.

This is an excerpt from the book by: Michael R Czinkota, Ilkka A Ronkainen, and Michael H. Moffett. Fundamentals of International Business (New York: Wessex, 2015), 19.  

Global Markets for Smaller Firms

With the world’s population now exceeding 7 billion people and more of those people entering middle class status, new and innovative solutions will be needed to provide them food and nourishment.  There is increasing demand for dietary protein sources that include livestock and seafood. As a result of this and the increasing strains on natural fisheries, the aquaculture industry has been the fastest growing food sector globally.  Aquaculture is growing across Southeast Asia, in Vietnam, Thailand, Philippines, India, and Cambodia, and now in Western Africa in Ghana and Nigeria.

Several hundred miles away from the Atlantic Ocean, Gettysburg, Pennsylvania seems an unlikely place for the cutting edge of aquaculture research and development.  Yet, that is where Zeigler Bros, Inc. is researching and producing innovative new products for specialty animal and aquatic diets, particularly in fish shrimp farms.  The company also operates a franchise program that transfers technology to international partner feed mills.

Zeigler Bros. grew from its origins in 1935 as  a local producer of poultry and livestock feed for Pennsylvania farmers. The company began exporting in the 1980’s and now sells its products in over 40 countries.  Since aquaculture has grown in overseas markets so rapidly, international sales now account for more than half of Zeigler’s business.  Zeigler received the Presidential E-Award for Export Excellence from the U.S. International Trade Administration in 2013 for its emphasis on exports.  Chris Stock, the International Sales Manager for Zeigler, described the importance of exports for business:  “It’s a no-brainer.  You should be exporting.  If you’re not, start learning about it, talk to other exporters and just go for it.  I think the key things to exporting are persistence and patience…If you don’t enter the export market, you’re limiting your sales in a big way, no doubt about it.

When asked about new markets for Zeigler Bros., Stock said:  “Africa is on the cusp, I think.  A lot of people see the opportunity, so it’s a great time to get in early, because it’s a huge emerging middle class that’s developing there with spending power.  They need things more than any other part of the world… And, there’s reason to take it slow when entering Africa and be cautious, but the opportunity outweighs the risk.”

Sources:  “Helping Feed the World Through Exports”, Doug Barry, U.S. International Trade Administration, September 13, 2013; http://www.zeiglerfeed.com, accessed November 11, 2013