The Innovation Diaries

To sell its classic Oreo cookies in China, Kraft foods realised that a ‘one size fits all’ approach wasn’t going to work.

The company reformulated the brand for Chinese tastes and also capitalised on the country’s growing appetite for milk by pushing the behaviour of having cookies with milk. Not too proud to compromise the product, Kraft remade the Oreo itself, introducing for the first time an Oreo that looked almost nothing like the original. The new Chinese Oreo consisted of four layers of crispy wafer filled with vanilla and chocolate cream, coated in chocolate. Kraft even developed a proprietary handling process to ensure that the chocolate product could be shipped across the country, withstanding the cold climate in the north and the hot, humid weather in the south, yet still be ready to melt in the mouth.

Unusually for a multinational, Kraft also bet on the instincts of its local managers and allowed them significant input into the marketing. Kraft began a grassroots campaign to educate Chinese consumers about the American tradition of pairing milk with cookies. The company created an Oreo apprentice program at 30 Chinese universities that drew 6,000 student applications.

Three hundred of the applicants were trained to become Oreo brand ambassadors. Some of the students rode around Beijing on bicycles outfitted with wheel covers resembling Oreos and handed out cookies to more than 300,000 consumers. Others held Oreo-themed basketball games to reinforce the idea of dunking cookies in milk. Television commercials showed kids twisting apart Oreo cookies, licking the cream center and dipping the chocolate cookie halves into glasses of milk.

Kraft CEO Irene Rosenfeld calls the bicycle campaign “a stroke of genius that only could have come from local managers. The more opportunity our local managers have to deal with local conditions will be a source of competitive advantage for us.”

Kraft’s Oreo efforts have paid off. In 2006, Oreo wafer sticks became the best-selling biscuit in China, outpacing HaoChiDian, a biscuit brand made by the Chinese company Dali. The new Oreos are also outselling traditional round Oreos in China, and Kraft has begun selling the wafers elsewhere in Asia, as well as in Australia and Canada. Kraft has also introduced wafer rolls, a tube-shaped wafer lined with cream, in China. The hollow cookie can be used as a straw through which to drink milk.

Over the past two years, Kraft has doubled its Oreo revenue in China, and with the help of those sales, that revenue topped $1 billion world-wide for the first time last year.

Photo from Bollig’s Flickr stream