Kraft's Asia-Pacific VP Shawn Warren shares his recipe for success

There’s no shortage of biscuits in our house, declares Shawn Warren. Reclining in a boardroom packed to the gills with sugary snacks, it’s clear that, 15 years after he joined the company, Kraft Foods’ VP marketing for Asia-Pacific has lost none of his enthusiasm.

Based in Singapore, Warren has been in Asia for five years. Food, he says, is a “family tradition” (his father worked in the industry too), and his career has included stints launching frozen pizza in Canada and overseeing crackers in the US.

The company has some of the food world’s biggest brands, among them Jacob’s, Oreo, Ritz and Vegemite. It could become even stronger following their recent US$19.4 million takeover of confectionery giant Cadbury.

The father-of-three is charming but ruthlessly media-trained - he manages to turn a simple question about his hobby, taekwondo, into a paean to Kraft’s “agility”. Nevertheless, he has an interesting story to tell.

In Asia, Kraft’s focus in the past few years has been on its Oreo cookie brand, which has become the ninth Kraft brand to rack up global sales of more than a billion dollars. That achievement came on the back of rapid growth in Asia.

It wasn’t always this way. Warren recalls that, having launched in China in 1996, the brand “stalled” between 2001 and 2005. “Sales were sluggish and we were losing share. A lot of initiatives from the US didn’t resonate - the advertising [and] the products didn’t work.”

So Kraft went back to basics, focusing on consumer research. “The first thing we learned was that Oreo was too sweet for many Chinese consumers,” says Warren. The result was the launch of a less sweet biscuit.

The other key finding was that Oreo’s biscuits packs were too big - Rmb 5 (US$0.73) for 14 biscuits was too expensive, so instead it launched a seven-cookie pack for Rmb 2.

The momentum built by those changes encouraged Kraft to experiment with the brand. It launched a wafer ‘straw’ product in China - the first time Oreo had deviated from cookies anywhere in the world.

In the past four years, Oreo’s sales have quadrupled in China, which has become the brand’s second-largest market behind the US. Kraft is trying to repeat the trick elsewhere in Asia; in Indonesia it has launched an Oreo soft cake brand, and it has a brand of vitamin-enriched biscuits called Tiger across Southeast Asia. It has alsotaken some of its Asian innovations and rolled them out elsewhere - even in the US.

This ability to steer a course between global imperatives and local quirks has impressed Justin Billingsley, formerly a client and now CEO Greater China at one of Kraft’s agency partners, Saatchi & Saatchi. “Shawn does a great job of this balance. While the brands adhere to clear ‘guardrails’ they are allowed high degrees of local creativity. This of course is the harder path for a regional CMO.”

There’s more to come, Warren promises, pointing out that the company’s investment in media spend and personnel has risen 25 per cent per year in Asia-Pacific since 2007. In May 2009 it also opened its biggest Asian research and development centre in Suzhou, China.

After the takeover of Danone’s biscuit business in 2007, Kraft has secured strong distribution in China’s tier-one cities; now it is planning to build its presence in tier-two markets.

The drive into these markets means that Kraft will maintain a strong presence in print and television, especially state-owned CCTV. But Warren insists digital is fast becoming a key platform. Kraft has developed an online forum for Oreo and developed an online campaign for its Chips Ahoy brand.

Alongside online, Kraft is looking at events, retail and other inventive media - for a Hong Kong launch it took over an MTR station.

That, as Warren makes clear, puts pressure on the company’s agencies to keep up. Kraft Foods works with a number of networks across the region, including DraftFCB, Saatchi & Saatchi, JWT and Ogilvy & Mather. Warren admits he is “flexible” when it comes to selecting agencies. “We have an obligation to get the mix right.”

The flipside to this - and a rarity in Asia - is that the company is willing to back up its approach with money. Kraft operates a payment-by-results system that rewards agencies based on revenue growth, among other measures.

“Whenever there’s change, some agencies embrace it and some resist it,” concludes Warren. “Our business is growing at a fast rate, and the agencies who get it are being rewarded.”

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This article was originally published in the 14 January 2010 issue of Media.