One test of Kraft Foods' ability to integrate Cadbury into its food-and-beverage family could be the Oreo cookie.
Speaking Tuesday morning after the $19.44 billion deal was announced, Kraft Chief Executive Irene Rosenfeld singled out the Oreo as one Kraft product that could flourish in the places such as the U.K., Greece and other markets where Cadbury is strong, or in her words: that a good portion of revenue synergies from the deal would come from "white space distribution … the opportunity to put Oreo into the U.K., for example, the opportunity to put Oreo into Greece."
In fact, a big reason Kraft was attracted to Cadbury was the U.K. chocolate maker's presence in emerging and other international markets, giving Kraft entry without the expense of breaking into such markets on its own. (There isn't all that much overlap between the two companies: Kraft has relatively small chocolate division, which includes European brands such as Toblerone, Milka, and Cote D'Or.)
But does her own example augur stumbling blocks? For not everybody loved the Oreo when Kraft launched a big advertising campaign for the cookie in the U.K. in 2008
Biscuit expert Stuart Payne told BBC Magazine in May 2008 that the Oreo was "a very sickly-sweet, dark biscuit. … It's like someone rudely coming into your home and telling you how to arrange your settee. It arrives here and says: 'I'm Oreo and this is what you do with me.' Well we've had biscuits for a long time and we know what to do."
Diehard British tea drinkers commented to the BBC that they could never get used to dipping their biscuits in milk.
Kraft has learned to adapt. When the Chinese turned up their noses at Oreos, Kraft lowered the sugar content and the price. Sales soared. Oreo is now one of China's best-selling cookies, according to the South China Morning Post.
Kraft's international Oreo odyssey shows how to make its Cadbury deal succeed, it must navigate the shoals of international taste buds.
Source : http://online.wsj.com/article/SB10001424052748703837004575013480913906488.html?mod=googlenews_wsj
Speaking Tuesday morning after the $19.44 billion deal was announced, Kraft Chief Executive Irene Rosenfeld singled out the Oreo as one Kraft product that could flourish in the places such as the U.K., Greece and other markets where Cadbury is strong, or in her words: that a good portion of revenue synergies from the deal would come from "white space distribution … the opportunity to put Oreo into the U.K., for example, the opportunity to put Oreo into Greece."
In fact, a big reason Kraft was attracted to Cadbury was the U.K. chocolate maker's presence in emerging and other international markets, giving Kraft entry without the expense of breaking into such markets on its own. (There isn't all that much overlap between the two companies: Kraft has relatively small chocolate division, which includes European brands such as Toblerone, Milka, and Cote D'Or.)
But does her own example augur stumbling blocks? For not everybody loved the Oreo when Kraft launched a big advertising campaign for the cookie in the U.K. in 2008
Biscuit expert Stuart Payne told BBC Magazine in May 2008 that the Oreo was "a very sickly-sweet, dark biscuit. … It's like someone rudely coming into your home and telling you how to arrange your settee. It arrives here and says: 'I'm Oreo and this is what you do with me.' Well we've had biscuits for a long time and we know what to do."
Diehard British tea drinkers commented to the BBC that they could never get used to dipping their biscuits in milk.
Kraft has learned to adapt. When the Chinese turned up their noses at Oreos, Kraft lowered the sugar content and the price. Sales soared. Oreo is now one of China's best-selling cookies, according to the South China Morning Post.
Kraft's international Oreo odyssey shows how to make its Cadbury deal succeed, it must navigate the shoals of international taste buds.
Source : http://online.wsj.com/article/SB10001424052748703837004575013480913906488.html?mod=googlenews_wsj
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