In the U.S., when most people hear Kraft they naturally may think macaroni and cheese because it dominates the market in the United States. But in developing countries, macaroni and cheese doesn’t have the same popularity and in turn is mostly an afterthought for Kraft.
For packaged food companies, it is a struggle to understand which products will be successful in emerging markets and how to appropriately market them internationally. In these types of food packaging companies, there are challenges because food is typically seen as a large expression of culture.
Mike Mazzeo, a professor of management and strategy at Northwestern University’s Kellog School of Management is speaking about food when he says “It’s much more clearly tied with culture, so it’s much more difficult to penetrate our products in their markets.”
Another factor is that many countries already have strong local brands which are tough competition to food multinationals such as Kraft.
“Kraft, maker of Oscar Mayer meats, Ritz crackers and other household brands, retooled its developing-market efforts three years ago, moving away from a scattershot approach.”
Previously, Kraft was attempting to “plant flags all over the world” but now due to these challenges, Kraft has decided to change their campaign to focus on 10 “power” brands and 10 countries. The aim here is to push brands that are most likely going to be easily translated across borders.
One of Kraft’s power brands is Tang, a powdered-drink which gained popularity in the U.S. around the 1960s and 1970s. Even though its popularity in the U.S. has dropped, in developing markets from Brazil to China, Tang has become an international success with $750 million in annual sales.
In the article they stated, “Mac and cheese is iconic, but it’s not one of our 10 power brands,” Khosla said. That’s not the case for Tang, though, which is one of Kraft’s 10 power brands in developing countries, right up there with the powerhouse Oreo.”
Kraft has learned the importance of focusing products and advertising around the specific culture your company is entering for the best results. To see more specific examples of other major packaged food companies and their experiences internationally, follow the link to this article by Los Angeles Times.