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3 key strategies for Oreo’s success

Oreo on Sunday celebrated its 100th birthday. The world’s top-selling cookie brand registered double digits growth in North America in the first quarter of 2012 and nearly 40 percent in Europe and developing markets.

For its first seven decades, Oreo was primarily a North American brand, with limited expansion into developing markets.  While the brand grew double digits in developed regions like North America and Europe in 2011, developing markets is now the brand’s leading growth engine.  Today, Oreo is sold in about 85 developing markets from China and India to Argentina and Mexico.  Over the past five years, Oreo has grown nearly 37 percent on average annually in developing markets, including gains of 50 percent in 2011.  The brand is on track to reach USD1 billion in annual revenues in developing markets this year.

"Oreo is one of 10 power brands in developing markets where we put disproportionate focus and resource," said Sanjay Khosla, President, developing markets. "After its first 95 years, Oreo had less than USD200 million in annual revenues in developing markets.  And by the end of 2012, we plan to make Oreo a billion-dollar developing markets success – nearly five times the net revenues of just five years ago."

There are three key strategies helped transform Oreo from an American favorite to a global icon.

A Global Cookie with a Local Twist

The original Oreo cookie has not changed much since its introduction – two round chocolate cookie wafers joined by sweet vanilla crème filling. But using a "glocal" approach that combined the best of global with the best of local, Oreo tapped into local market insights to grow sales incrementally with innovative local flavours, forms and limited edition seasonal items. 

Today Oreo comes in a variety of local flavors in markets around the world, such as Oreo green tea ice cream in China or Oreo Duo in Argentina with banana and dulce de leche crème.  Oreo also is enjoyed in fun shapes and forms such as Triple Double Oreo in the US, Oreo Wafer Rolls in China and the Oreo Trio in Mexico.  In the US, Oreo delights kids of all ages with seasonal items, including those celebrating Halloween, spring and American football.

Universal Message Speaks Locally

Over the years, the makers of Oreo learned that the iconic "twist, lick, dunk" ritual was adored around the world and that slowed-down, carefree family moments were increasingly rare and cherished by moms everywhere.  With these global insights, the brand launched the first "moments" television advertising campaign in 1989 that captured the unique connections shared over Oreo and milk. But for many years, the campaign in other markets consisted of US ads that were quickly treated with a local voiceover or reshot with local talent.  Beginning in 2008, the brand introduced ads that told culturally relevant, local stories, all the while keeping the global "twist, lick, dunk" framework at the forefront.

In 2009, the brand’s global appeal was taken to Facebook.  Originally an English language community, Oreo soon created a truly global community reaching fans from over 200 countries in 10 different languages.  Oreo then began customising its messaging to reach consumers in their local language about Oreo news in their local markets.  As a result, Oreo is among the top five most popular brands on the social media site, captivating a Facebook community of over 25 million fans.

Adding Stamps to its Passport

Kraft Foods, the world’s largest biscuit baker, accelerated Oreo growth with several acquisitions that increased the brand’s global footprint across Europe, Latin America and Asia. 

In 2006, the company acquired the Spanish and Portuguese operations of United Biscuits while regaining rights to all Nabisco trademarks, including Oreo, in the European Union, Eastern Europe, the Middle East and Africa.  In 2007, Kraft Foods acquired Danone’s global biscuit business, giving Oreo a bigger footprint and enhanced biscuit capabilities in critical emerging markets such as China, Russia, Poland, Indonesia and Malaysia. Finally, the acquisition of Cadbury in 2010 increased the brand’s global scale and distribution and enabled the launch of Oreo in India.