For Kraft Foods (NYSE:KFT), India has emerged as the fastest-growing market in the Asia-Pacific region. In Q1 2011, Kraft Foods’ business grew by more than 40% in India while China and Indonesia grew at 20%. This feverish growth will help it competes vs. peers like PepsiCo (NYSE:PEP), General Mills (NYSE:GIS) and Kellogg (NYSE:K).
Asia-Pacific region contributing to growth
The impressive growth rates in the Asia-Pacific region is driving top line growth for Kraft Foods. India, China and Indonesia are the fastest performing Kraft Foods markets in the Asia-Pacific region while sales across developed markets such as the U.S. and Europe have remained sluggish. The developing markets in Kraft’s universe including India contribute approximately $13.6 billion worth of revenues, which approximates to 28% of total sales.
In January 2010, Kraft Foods bought out British chocolate maker Cadbury in a $18.9 billion deal. The acquisition provided a ready revenue base and a large distribution network to Kraft.
India business model
Kraft India’s success is mainly attributed to its decentralised model where country heads can invest in sales, infrastructure, advertising and promotions according to their specifications.
Kraft has also adopted a dual marketing strategy in India. It launched Oreo biscuits under the Cadbury portfolio while Tang powder is being marketed as a Kraft Foods brand. Oreo, chocolate-based biscuits, are synonymous with chocolate whereas Tang has global association with Kraft and fits well into Krafts’ product line.
Kraft’s India arm employees 2,700 employees and is one of Kraft’s top 10 priority markets among the 170 countries it operates across.
