Kraft Foods Co is revising the brands and countries it will focus on in developing markets as a result of its acquisition earlier this year of Cadbury Plc.
Cadbury Dairy Milk chocolates, Halls lozenges and Trident gum, three Cadbury brands, make the list of 10 "power" brands getting the bulk of the marketing money in developing markets, said Sanjay Khosla, Kraft's president, developing markets and global categories. They join Oreo cookies, Milka chocolate, Lacta chocolate, Jacobs coffee, Tang drink mix, Club Social/TUC crackers, Biskuat/Tiger biscuits, Khosla said. Falling out of the list are Philadelphia cream cheese, Carte Noire coffee and Toblerone chocolate.
Kraft already had a strategy in place in which it focused on 10 "power" brands that could be grown globally, 10 key developing markets and five categories. But the $18.4 billion acquisition of Cadbury meant the members of that template had to change. "The whole thing changes, of course, because we have a much richer portfolio with the Cadbury folks coming over," Khosla told Reuters in an interview on Monday. That is where Philadelphia, the cream cheese brand, loses out. While still a big brand in markets like Australia, the brand is no longer in the top 10 and cheese is no longer a top five category, having been replaced by candy and gum. Those top 5 categories, which also include chocolate, coffee, biscuits and powdered drinks, will receive 95 percent of the company's advertising and promotional spending, Khosla said.
The new top 10 brands account for more than 40 percent of the $12 billion in revenue Kraft gets from developing markets like China and Mexico. Developing markets make up about 26 percent of Kraft's total business.
As Kraft changes its brand focus, its focus markets are changing as well. One of the key benefits of buying Cadbury was its distribution infrastructure in the vast India market, and Khosla said India is now one of the 10 focus markets. Other focus markets under his purview are Brazil, Australia, Russia, Mexico, China, Ukraine, Poland, South Africa and Indonesia. Markets that are out of the top 10 include the Czech Republic, the Philippines and the Middle East.
Source: flex-news-food.com
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