Oreo: World’s leading biscuit brand comes to Pakistan

Continental Biscuits Limited and Mondel-z International start localised manufacturing of Oreo brand.

KARACHI:

In a clear sign of rising demand for branded biscuits and a battle of market share, Pakistan’s Continental Biscuits Limited and United States Mondel-z International [formerly Kraft Foods] have started localised manufacturing of Oreo – the world’s ‘number one’ biscuit brand, as claimed by officials.

“Our vision of locally producing Oreos clearly signals our intent at dominating the local biscuit market and also highlights the importance of Pakistan as biscuit manufacturing base,” CBL’s Managing Director and Chairman Hasan Ali Khan said during the launch ceremony at Avari Hotel on Monday.



First launched in the United States over 100 years ago Oreo – a billion-dollar brand with $2.3 billion in global sales – is Kraft Foods’ first product to be manufactured by CBL in Pakistan, according to Khan.

The maker of famous LU brand – Prince, TUC, Candi and Tiger, to name a few – CBL was founded in 1984 through a joint venture between family of Khan and the Generale Biscuits of France, which later became a part of Group Danone – the French food giant. In 2007, the American food and beverage giant Kraft Foods bought Danone’s biscuit category including the LU brand. Kraft Foods restructured itself recently, renaming its international subsidiaries as Mondel-z International.

“We have worked very closely during last six years to build a thriving biscuit business in Pakistan. Oreo’s launch is the biggest single step reflecting the successful relation we have had with CBL,” said Ian Buchan, Mondel-z International’s Middle East and Africa New Markets General Manager.

Pakistan, which has now joined ‘the global family of the world’s number one biscuit’, is critically an important market for Mondel-z, according to Buchan. “Our sales for the region have tripled during the last quarter,” he said.

“We are confident that there is a huge opportunity for Oreo in Pakistan,” he said, adding they had done a lot of research on the Pakistani market and learned that the consumers show a lot of appreciation for quality products – Oreos manufactured in Pakistan has the best quality in the world, Khan claimed citing the feedback he got from the American partner’s quality control arm in Chicago.

Meeting the global quality standards, according to the officials, was not easy at all. For this purpose, CBL has invested Rs1.1 billion or $11 million to set up a state-of-the-art Oreo production line at its manufacturing plant in Sukkur, making it the largest biscuit-production facility in the country and 22nd manufacturing facility for Oreo. The new product line can produce as many as four million biscuits per day.

The expansion in the company’s manufacturing facility comes at the back of a recent growth in its venues. With Rs10 billion in sales during fiscal year 2013, CBL’s revenues have been growing 50% for the last two years, Khan said – of the total figure, Rs5 billion have come from exports, he said.

It may be added here that CBL has about 30% market share, second only to market leader English Biscuit Manufacturers that enjoys 40% of the branded biscuit market. The company’s sales were growing in excess of 20% from 2009 to 2011 but a rigorous marketing campaign and larger market penetration helped it improve its market share.

There are mainly two reasons for the recent surge in the company’s growth, CBL’s Director Marketing Rafey Zuberi said. The expansion in the distribution network took the products to rural markets while rigorous marketing and branding by the company also helped, he said.

Although an imported version of Oreo is already available in the market but it is considered a high-end brand because of its price. A 20-biscuits imported pack of Oreo is selling in retail stores for Rs127 or Rs6.35 per biscuit. CBL has priced 12-biscuits pack at Rs40 or Rs3.35 per biscuit to outperform the imported ones –they even launched a tiki pack for Rs10 to target lower income classes.

CBL, however, doesn’t seem to stop here, they intend to launch more Mondel-z brands in the country once Oreo is a success, according to Khan.

Published in The Express Tribune, October 22^nd, 2013.

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