Kraft targets Asia-Pacific region

Aug. 30, 2010

Kraft Foods Inc. wants to raise the profile of Cadbury products in China as it ramps up investments in developing markets, particularly the Asia-Pacific region, which has become Kraft's key growth driver following its $18.5 billion (at current prices) acquisition of the British confectioner earlier this year, reports The Wall Street Journal.

Kraft Foods Inc. wants to raise the profile of Cadbury products in China as it ramps up investments in developing markets, particularly the Asia-Pacific region, which has become Kraft's key growth driver following its $18.5 billion (at current prices) acquisition of the British confectioner earlier this year, reports The Wall Street Journal.

With growth slowing in the U.S., Kraft's strategy over the past three years, has been to expand its presence in developing markets. Kraft CEO Irene Rosenfeld said the Cadbury PLC acquisition was "just the next step in that evolution." Cadbury's presence in fast-growing developing markets in Latin America, Asia-Pacific and the Middle East made it a sweet acquision. And she added Kraft is placing "disproportionate focus" on Asia-Pacific, mainly because of the strength of the Indian and Chinese consumer markets, in which the company expects to see "explosive growth" in the future. In fact, operating profits for the region have registered double-digit growth since 2008, and Kraft's revenues in China has quadrupled over the last four years, partly because of its 2007 purchase of Groupe Danone SA's biscuit business.

Rosenfeld hopes to build Kraft's businesses in China and India to where they each generate $1 billion in revenue a year, putting them on a level with the company's operations in Russia and Brazil, though she declined to provide a timeframe. "I'm quite optimistic about the future of our business in this region."

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