Kellogg Company has announced a joint venture with Wilmar International Limited of Singapore to market Kellogg’s and Pringles branded products in China, despite previous set-backs the company has suffered in the past. In 2008 the company bought Zhenghang Food Company Ltd, but was forced to conclude in 2011 that “the current business has not proven to be the right vehicle for entry into the Chinese marketplace”.
However, Kellogg’s, which expects China to become “the largest food and beverage market globally within the next five years”, feels this new deal will be the one. This may be true, but the Chinese cereal market also presents unique problems that manufacturers never have to deal with in the West, like the fact that the milk can kill you, from Bloomberg:
China’s past scandals with tainted milk nevertheless remain a major stumbling block for cereal makers, says Paul French, chief China market strategist for Mintel, a research firm.
“They’ve been having a go at trying to get them to eat (cereal) for some time,” he said.
Another hurdle is that milk in China doesn’t taste the same as in the U.S. because it tends to be watered down and filled with additives, French said.
Experts say that Kellogg’s may find success with cereal bars, going down the Starbucks-route of marketing them towards wealthy white-collar workers in a rush; or it may ape Lay’s success in creating unique Chinese flavours:
Lay’s is the best-selling potato chip across China, in dozens of unique flavors: from “Numb and Spicy Hot Pot” and “Hot and Sour Fish Soup” to local favorite, “Cucumber”.