Tang Takes Off Globally; Now A Billion-Dollar Brand
The corporate website this morning heralds the achievement with a short animated video and song ("I'm on Top of the World") on its home page. But this isn't your older brother's, or John Glenn's, Tang. Back in those days, grape was considered an exotic flavor for the drink created as an orange juice substitute ("with more vitamin C") in a General Foods laboratory in the late '50s. The hot flavors today include tamarind, lemon pepper and soursop.
But don't be surprised if you can't find Soursop Tang at the corner deli unless, perhaps, that deli is in someplace like Brazil or Indonesia. Tang has grown about 20% in developing markets in each of the past two years, in fact. "In 2006, Tang was just over a $500 million brand. And over the past four years alone, we've nearly doubled that," said Sanjay Khosla, the president of Kraft Foods Developing Markets. Other key markets include Argentina, Mexico, the Philippines and the GCC (Arabian peninsula) countries.
Local flavors, in fact, are responsible for about 25% of Tang sales in developing markets, but orange is still the top seller globally, the company says.
Kraft's overall business grew by more than 40% in India while China and Indonesia grew at 20% in the first quarter, a Forbes blog points out. "Kraft India's success is mainly attributed to its decentralized model where country heads can invest in sales, infrastructure, advertising and promotions according to their specifications," the post says."
The company is evidently making the most of the infrastructure gained in its purchase of Cadbury last year. Developing markets now contribute about $13.6 billion in revenue -- or about 28% of total sales.
Kraft also tinkers with the vitamins and minerals supplements in the Tang formula on a market-by-market basis. "We take the global idea of fortification and localize it to meet regional nutrition needs," says Khosia. "For example, we fortify Tang with Vitamin C in all geographies, but in Brazil and the Philippines, where kids are iron deficient, we fortify with iron as well as other vitamins and minerals."
Kraft spent a paltry $129,700 in measured media in the U.S. in 2008, and nothing since then, EJ Schultz reports in Ad Age, as it focuses its advertising on Crystal Light ($46 million in 2010) and Kool-Aid ($26 million). But based on its success overseas, "we're looking at what lessons we might be able to apply here in the U.S.," spokeswoman Lisa Gibbons tells Schultz in an email.
Ogilvy & Mather is Tang's global ad agency of record. Kraft is "doing a decent job of taking a product that is sold in the U.S. and adapting it to local tastes and preferences to really drive growth and to drive further expansion of the brand in those newer markets," Morningstar analyst Erin Lash tells Schultz. "They've been switching from more of a centrally managed [approach] and shifting to more of a local focus to really resonate with the consumers."
When the scientist credited with Tang's invention, Dr. William A. "Bill" Mitchell, died in 1994, obituaries remembered him more prominently as the creator of Pop Rocks, the exploding candy that he discovered serendipitously when he put some sugar flavoring mixed with carbon dioxide in his mouth in pursuit of an instant soft drink. Cool Whip and quick-set Jell-O Gelatin were among 70 other patents with his name on them. Despite the hazardous duty in pursuit of the ultimate junk food, Mitchell lived to 92.
There's no accounting for the tastes of human beings, of course. In a somewhat related story this morning, Financial Times' Rhymer Rigby tells us about a computer programmer who has visited 10,000 Starbucks outlets, spending more than $100,000 of his own money doing so, as well as a retired prison guard who recently enjoyed his 25,000th Big Mac. The behavior is evidently known as "obsessive compulsive consumption" or OCC. Consumer psychologist Paco Underhill is one of two experts who warn about keeping such ardent consumers at a distance, however. "There is a fine line between being a very passionate consumer and a stalker," he tells Rigby.
Or, as a classic Tang commercial from way-back-when has a moon dweller musing as he's traded a load of lunar rocks for some Tang: "Sometimes I wonder if there's intelligent life on that planet."