Kraft targets Indian growth

24 November 2011

NEW DELHI: Kraft, the food group, will continue to invest "aggressively" in India, having already enjoyed considerable sales growth after boosting its spend on marketing and innovation.

"We see India as a core part of the global snacking company. It will be a critical focus area and a very significant contributor to our overall growth. Our ambition is to be one of the top five food and beverage companies here," said Irene Rosenfeld, Kraft's CEO, according to DNA India.

To achieve this, Kraft has increased its investment in India – covering disciplines like advertising, R&D and merchandising – by 70% since its 2010 acquisition of Cadbury, which had a very strong local presence.

Oreo and Tang have been among its most high-profile launches in the country, and it has also placed considerable emphasis on Dairy Milk, acquired as part of the takeover of Cadbury.

Kraft's Indian sales over 2011 to date have grown by 40%, and Rosenfeld suggested categories such as chocolate, biscuits and, "over time", candy all still represent a "big opportunity" going forward.

"The growth rate we have seen since the acquisition are well in excess of the legacy of Cadbury, primarily because we have chosen to invest in a number of critical areas, be it sales, marketing, point of sale [or] point of buying," she said. "We will continue to invest in India aggressively."

Alongside attempts to stimulate organic growth, Kraft is open to making acquisitions in India, as is the case with most large emerging markets, according to Rosenfeld.

The US operator also sees potential in rolling out its major global brands, although this is a secondary priority. Instead, Kraft is currently concentrating on the range of its goods that is already available.

"Over time we will get more brands," Rosenfeld said "But there is so much untapped opportunity for our base businesses, we will look to focus on that first."

Developing products specifically for the Indian market is another objective, as shown by the introduction of Perk, a chocolate bar with a starting price of just five rupees.

"The launch of Perk in India has been a terrific success for us and has taught us a lot about how to address the needs our lower-income consumers with the same quality product that we are selling as we look higher up on the pyramid," said Rosenfeld.

Data sourced from DNA India; additional content by Warc staff