Kraft Heinz makes Kraft macaroni and cheese, Jell-O desserts, Maxwell House coffee, Heinz ketchup, Oscar Mayer cold cuts and Kool-Aid flavored drink mixes. But it's been lacking in cookies, until now.
The company, formed in 2015 out of the merger of two food giants, just launched its first cookie brand, and it was created for China. The brand name is Kraft Jif Jaf, the mascots are quirky personified cookies with big eyes, and the products include wafers and chocolate sandwich cookies with fillings in unusual flavors like matcha tea, chili and cheese. (Cheese-and-chocolate sounds weirder than it is: Ad Age did a taste test, and the filling is overpowered by the chocolate biscuit. There's a faint cheesy tang when you sniff it, though.)
Jif Jaf obviously invites comparisons to another brand making chocolate sandwich cookies – Oreo. There's a backstory there. Kraft Foods owned Oreo before splitting into two separate companies in 2012. Oreo and other cookie brands went into the newly created snacking giant Mondelez International, while Kraft kept brands including Velveeta and Oscar Mayer. Kraft and Heinz merged three years later, creating a new food giant, although one devoid of cookies.
So was Kraft Heinz thinking about Oreo (and maybe feeling its absence) as it created this new product?
"We are not here to compete with a single brand in particular -- there are many sandwich cookies in the market today," says Roshni Chatterjee, head of white space innovations for Asia-Pacific at Kraft Heinz. "It's not only about sandwich biscuits, it's about snacking, which is the competition."
That said, the company knew there was untapped potential for Kraft in the cookie category in China. The Kraft name has high awareness in China, and research showed that many Chinese consumers still spontaneously associate Kraft with cookies, years after its cookie business departed with Mondelez. "It definitely was a category of choice for us to participate in," Chatterjee says.
The value of the Chinese market for biscuits and cookies grew at a compound annual growth rate of 8.4 percent between 2011 and 2016, hitting $10.2 billion that year, according to Mintel data. Mondelez is the biggest player in the segment in China, with a 10.6 percent share by value in the first six months of 2016, the most recent data available, though it has lost some ground to local players.
Kraft Heinz, meanwhile, had global sales growth of 0.3 percent to $6.88 billion in the most recent quarter, with sales falling 1.1 percent in the U.S. That may be a reason to look for untapped opportunities in China.
A brand that 'embraces its oddities'
Enter Jif Jaf, which launched in a strategic partnership with Alibaba Group's Tmall e-commerce platform. The brand is called Quzu in Mandarin (pronounced chew-zoo), which means "interesting clan." It's a reference to a Chinese expression about beauty being common, while interesting souls are rare.