What $1B in Tang Sales Says About the Future of Food

Last Updated Jun 21, 2011 2:37 PM EDT

Kraft's (KFT) announcement that Tang -- that powdered orange drink mix you thought was last consumed on a 1972 space mission -- has become its latest billion dollar brand provides a revealing glimpse of where America's food industry is headed. Tang's success is due to booming sales in developing nations like Brazil, Argentina, Mexico and the Philippines -- which, it turns out, is where most of the industry's growth over the next decade is going to be.

At Kraft, the resurgence of Tang comes amidst a concerted effort to boost the company's overseas business. Its contentious and drawn-out acquisition of Cadbury last year helped the company double its market share in developing markets. CEO Irene Rosenfeld says that within the next three years, one third of Kraft's sales will be not just be outside of the U.S., but in developing countries, where people are just beginning to transition from traditional diets based on simple cooking to our model of processed, prepared foods with endless options for snacking.

So, besides Tang, what exactly will Kraft's customers in Brazil, India and China be consuming lots more of? Kraft already has that mapped out with its 10 "power brands" for developing countries:
  • Oreo cookies
  • Social Club crackers
  • Cadbury Dairy Milk chocolates
  • Milka chocolate
  • Lacta chocolate
  • Trident gum
  • Tiger Biscuits
  • Jacobs coffee
  • Halls lozenges
Mostly snacks, of course, and not exactly the sorts of foods you'd classify under "health and wellness." After all, Tang is basically an artificially flavored and colored, chemically preserved concoction of sugar, with a few synthetic vitamins thrown in so it doesn't look like completely empty calories.

Ten years from now, developing countries will also have a lot more fast food outlets. KFC has been enormously successful in conquering the Chinese market and McDonald's is in a race to catch up. Subway recently hit its 200th store in India. And Nestle recently acquired a 60% stake in a Chinese company that makes things like ready-to-drink peanut milk and instant canned rice porridge.

The biggest winners in this grab for global market share will be the ones who do the best job customizing their offerings to local tastes and distinct cultural sensibilities. In addition to its original orange flavor, Kraft came up with mango Tang in the Philippines, soursop in Brazil, horchata in Mexico and pineapple in the Middle East. In in China, Oreos are smaller, less sweet and contain green-tea-flavored filling. And KFC has done a great job customizing its chicken products for Chinese tastes.

As for whether the relatively unobese, undiabetic populations of China, India, Brazil and the Philippines will emerge as winners in this race for culinary colonialism -- well, that's another matter entirely.

Image by Flickr user RetroLand U.S.A.
Related:
  • Melanie Warner

Comments