Chocs away

Sanjay Khosla is one of those rare interviewees; he asks almost as many questions as he answers. But the man who has driven much of the international growth of Kraft Foods over the last five years says his job is just as much about listening as talking.

“I’m a believer in the principle of trying to destroy the myth that senior people have more knowledge,” he muses. “Fundamentally, the guys who are closer to the market probably know the consumer and the customer better than anyone else.

“That’s why, when anyone in a meeting looks at the most senior guy in the room and asks their advice, they may give the benefit of his or her experience, but if they actually pretend to have superior knowledge, that’s a fatal flaw.”

Nowadays, Khosla is the most senior person in pretty much any meeting room he cares enter. But it’s not just by listening that Kraft Foods has recently made its mark on overseas markets.

Now over a century old, the food and beverage producer is one of America’s top 50 companies in terms of revenue, pulling in a shade under $50bn last year. If you’re one of the few who haven’t heard of Kraft itself, then at least you’ll be familiar with its brands. Twelve of them — which include Cadbury, Maxwell House, Oreo and Philadelphia — generate annual revenues of $1bn each.

So far, so good. But five years ago, when Irene Rosenfeld became CEO (and subsequent chairwoman) of Kraft Foods, she faced a pretty tough task. The company’s brands were omnipresent in the US, where icons like Oreo biscuits and Jell-O are now part of American popular culture — but Kraft was losing out overseas, particularly in emerging markets. To make the leap from a US firm to a global giant, Rosenfeld sounded out Khosla to be her first external hire, a self-confessed ‘global citizen’ and 30-year veteran of FMCG giant Unilever.

Today, Khosla, who is executive vice president and president of developing markets, oversees over 60,000 employees in regions as far-flung as central and eastern Europe, Asia Pacific, Latin America, Africa and the Middle East. Under his stewardship, Khosla’s division has reported annual growth of almost thirteen percent over the last four years, and a 34 percent rise in operating income every year during that period.

More importantly, as Khosla says, something like 60 percent of Kraft’s growth now comes from developing markets. Five years ago, Kraft was resigned to removing its Oreo brand from China. Now, Chinese consumers have munched their way through so many of the cookies that it is now the best-selling biscuit in the world’s fastest-growing economy.

So how did he do it? Other than the landmark acquisitions of Danone Biscuits and Cadbury — more of which later — Khosla puts much of his recent success down to a single strategy.

“I’ve been obsessed with concept of focus for years and years,” he says, sitting comfortably in the Kraft headquarters in Dubai, where he is paying a flying visit. “It’s not just the theory of focus, it’s how you implement it, how you execute doing a few things well, rather than a large number of small things badly.”

Khosla’s strategy — which he calls ‘winning through focus’ — is now being regarded as something of a blueprint for brand revamping. Last year, he published it, alongside a professor at Northwestern University’s Kellogg School of Management, as a manifesto that has resulted in rave reviews. Needless to say, that blueprint — plus the obvious successes of Oreo, Tang et al — have also led to Khosla being inundated with requests to lecture at some of the country’s top business schools.

“There are three pillars to this strategy, and the first is — literally — focus,” Khosla points out. “We define that as rather than planting flags all over the world, we focus on five categories, ten brands and ten markets. You really distort resources behind that.

“The second pillar is ‘glocal’ — getting the balance right between global and local. The theory is simple, but implementation is where the difference comes. And the third pillar is the whole unleashing of people’s potential, how you trust and empower people, and when they win you celebrate their successes,” he adds.

Take Oreo as a case in point. The biscuit, which features a cream filling sandwiched by two chocolate or ‘golden cookies’, is reckoned to be the best-selling cookie of all time, with estimates as to total sales reaching as much as half a trillion. All that, however, counted for little in China.

“It’s interesting, because about five years ago, I went to consumer homes in Shanghai and Beijing, and our customers told us: ‘It’s American Oreo — it’s too big, it’s too sweet, and the price points don’t work for us’,” says Khosla. “And that was a classic application of the ‘glocal’ principle. So we decided, from the global side, to use technology, procurement, change specifications and add a new campaign.