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Kraft Foods’s Brand New World

Sanjay Khosla learned to woo customers the old-fashioned way—by selling soap off a handcart in the countryside of India. Now at Kraft Foods, Khosla is hailed as a globalization guru. His biggest win so far? Translating Oreos into Chinese

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“Sanjay has changed the culture at Kraft,” says a colleague. “Before, everyone [drove] their own agenda. Now the level of teamwork is so high that we’ve exceeded some ambitious expectations.”

Sanjay Khosla is ruminating about “the journey,” tossing out profound thoughts on trust, belief, the soul, and human potential. The quasi-inspirational spiel is part Deepak, part Oprah, part Obi-Wan. But enlightenment is not on the table here: We’re talking about Oreos.

They may be the United States’ most popular cookies, celebrating their 100th birthday in 2012, but these days, Khosla has found his own history intertwined with that of the iconic treat. Since becoming president of the developing markets division for Northfield-based Kraft Foods in 2007—ten years after Oreos debuted in China—Khosla has seen the brand ascend from unpopular bottom feeder to the biggest fish in the Chinese cookie pond. And in a country of over 1.3 billion people, that’s a lot of cream filling.

“When I started at Kraft four years ago, Oreos were doing so poorly in the Chinese market that we were about to remove them completely,” muses the 59-year-old executive, who was born and raised in India. “I said, ‘Wait a minute. Why not try a different approach?’”

For Khosla, who oversees nearly $14 billion of business in over 60 countries, “wait a minute” translated into a creative hubbub that included hundreds of Oreo ambassadors on bicycles doling out samples in various Chinese cities and the towering basketball star Yao Ming explaining in commercials the traditional “twist, lick, and dunk” technique for enjoying the cookie. Above all, there was a massive overhaul that tailored the Oreo to local tastes, making it smaller and less sweet, with non-Western flourishes like green-tea-flavored filling and wafer rolls. Today, China is the second-largest consumer of Oreo products after the United States, and Khosla has clearly earned his transcendental cookie discourse.

For the moment, let’s put aside questions about pushing a calorie-loaded confection with little nutritional value on hundreds of millions of Chinese children and consider Khosla’s triumph with another aging American product, Tang. In the United States, the onetime powdered drink of NASA astronauts had also languished in Kraft’s developing markets for years. Then it got the Khosla treatment: overhauled packaging, innovative distribution, and locally adapted flavors that put the original American orange to shame—lemon pepper (Pakistan), tamarind (Mexico), and soursop (Brazil). Today, Tang ranks as one of Kraft’s most profitable products, with sales growing 25 percent a year over the last two years, even if few North Americans seem interested in quaffing it.

Khosla had earned stars as a marketing wizard well before landing at Kraft, though he had largely hovered under the radar. That began to change last year, when he took a major role in Kraft’s noisy $19 billion acquisition of the venerated British candy maker Cadbury, a deal that counts heavily on Kraft expanding its markets for sweets around the world. Then, last fall, Khosla and Mohanbir Sawhney, a professor at Northwestern University’s Kellogg School of Management, published a convention-busting manifesto, “Growth Through Focus: A Blueprint for Driving Profitable Expansion,” distilling the strategies Khosla has honed through-out his career. Khosla and Sawhney’s recipe eschews complexity (and mind-numbing PowerPoint presentations) in favor of a less-is-more approach that would make Mies van der Rohe proud.

Since publication of the article in the marketing magazine Strategy & Business, the authors have been in demand at business schools and corporate meetings. “I read ‘Growth Through Focus’ and then invited Sawhney as our keynote speaker to talk about it,” says Laura Hackett, general manager of commercial learning and development for MillerCoors. “The idea that you can line up a company behind a few key priorities and will progress further or that companies don’t have to become more complex but can be stripped down for clearer focus . . . it’s very inspiring.”

Of course, none of this would mean much if Khosla didn’t deliver in his own right, but Kraft’s developing markets business has more than doubled under his watch, now representing 28 percent of Kraft’s global portfolio, leading the CEO, Irene Rosenfeld, to gloat, “Our developing markets business is the growth engine for our company. We’re so glad Sanjay now calls Kraft Foods his home.” Rosenfeld lured Khosla from New Zealand to Chicago six months after she took over the helm at Kraft in 2006, when profits from the developing markets division were flat as a Wheat Thin. At the time, Khosla was managing director of Fonterra, a large dairy cooperative headquartered in Auckland. “I was lying on a beach in paradise, at the last bus stop on the planet, when the call came in from freezing Chicago with an offer I couldn’t refuse,” he recalls.

I first met Sanjay Khosla socially, oblivious to his lofty corporate status but captivated by his tales of übersuccessful marketing strategies. He was like Scheherezade in The Arabian Nights, only his spooled-out exotic narratives featured cookies and teas, soaps and detergents. One anecdote involved a pre-Kraft European product he helped develop that targeted horny adolescent boys eager to attract girls: Khosla and his team figured out how to play on the boys’ desires as well as their insecurities, inspiring them to douse themselves in body products with names like Dark Temptation and Rise (aromas that permeated my own home until recently, when my son outgrew the phase). These sagas seemed epic, transformational, subtly and delightfully fiendish. But it’s safe to say that if there’s a Kraft product in South America, Indonesia, Australia, Russia, or any of the dozens of other countries in his orbit, Khosla has been losing sleep over it, auguring how to sell it better.


Photography: Anna Knott; Photoillustration: Andrew Davis


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