Chocolate Fortunes: The Battle for the Hearts, Minds, and Wallets of China's Consumers by Lawrence L. Allen, Paperback | Barnes & Noble
Chocolate Fortunes: The Battle for the Hearts, Minds, and Wallets of China's Consumers

Chocolate Fortunes: The Battle for the Hearts, Minds, and Wallets of China's Consumers

by Lawrence L. Allen
     
 

View All Available Formats & Editions

This book is the story of the five global titans of chocolate-Ferrero, Cadbury, Hershey, Nestlé, and Mars-that battled to capture a once-in-a-lifetime opportunity to establish their brands with one-fifth of the world's population. It is also the inside story of East meeting West through the introduction into China, a xenophobic land of austerity and deprivation

Overview

This book is the story of the five global titans of chocolate-Ferrero, Cadbury, Hershey, Nestlé, and Mars-that battled to capture a once-in-a-lifetime opportunity to establish their brands with one-fifth of the world's population. It is also the inside story of East meeting West through the introduction into China, a xenophobic land of austerity and deprivation, of an icon of the Western world's decadence and self-indulgence: chocolate.
Chocolate Fortunes takes you inside one of global business's most intense, complex, and fascinating market assaults. At its heart, the campaign to turn the Chinese people into chocoholics is really about globalizing the last great frontier. If there is an easy part, seeding an insatiable desire for chocolate may be it. (After all, "who doesn't like chocolate?") But what about building a business from scratch with virtually no precedent? What about navigating a boundless (and ever-shifting) sea of local, provincial, and national laws and regulations before executing even the most pedestrian business activities?
While each of the Big Five purveyors profiled in Chocolate Fortunes brought its own identity and strategic vision to the battle theatre, their varying degrees of success or failure hinged on combinations of savvy and circumstance, of perseverance and flexibility, and of textbook business excellence and sheer luck. The lessons learned are at once practically instructive for all internationally minded businesses and fascinating reading in the classic East-meets-West mold.

Editorial Reviews

Publishers Weekly
Allen, a senior international executive with a 20-year track record of international branding, offers a fascinating look at the chocolate wars in China. Allen, himself a participant in bringing chocolate to this new frontier as an executive for Hershey and Nestlé, recounts the struggles of doing business in a rapidly changing market of almost limitless possibility. For five global chocolate titans (Ferrero Rocher, Cadbury, Hershey, Nestlé and Mars) entering this market, the stakes were extremely high and included a billion potential customers for generations to come. Allen details the challenges these organizations endured, including copyright infringement, dedicating lengthy chapters to each corporation, documenting their failures and successes and ultimately demonstrating that there's no single path to business success in this emerging world power. In addition to the many trials these firms encountered, Allen notes a new one that will soon emerge—competition from local Chinese companies. While local competitors are a low-level threat today, in the future, they will gain greater market share. Informative, cautionary and essential, this book is a must-read for executives currently doing business, or planning to, in this most volatile and critical market. (Oct.)
From the Publisher

“Informative, cautionary and essential, this book is a must-read for executives currently doing business, or planning to, in this most volatile and critical market.” --Publishers Weekly

"Allen focuses exclusively on China's nascent chocolate market, but he makes sure to write his book so the lessons learned by the five companies can be applied to other industries looking to break into an emerging economy." --Houston Business Journal

"For anyone thinking of bringing their product to the Chinese consumer market, or even simply interested in the cultural characteristics of the Chinese consumer, Chocolate Fortunes offers valuable, hard-won insight from a true industry expert. The branding and marketing case studies alone make this book a worthwhile read, but Allen’s skillful prose — which at times is as smooth and enjoyable as the chocolate he describes — and deep understanding of Chinese culture and history make Chocolate Fortunes much more than just another business-in-China book." --Jing Daily (www.jingdaily.com)

"For anyone who is thinking of going into consumer products or food or retail in China (and who out there is willing to ignore 1.3 billion customers?) this book is a must read." --China Law Blog (www.chinalawblog.com)

"a fascinating look at the process of establishing business connections in [China]" --Women's LifeStyle

"Chocolate Fortunes captures the essence of China’s fast-moving consumer market. It tells the story of the global chocolate industry's entry into China in a style which is captivating and informative. Allen presents a compelling story with personal anecdotes, historical perspective and some clear lessons for the future. Chocolate Fortunes is a delightful book to read that is strongly recommended for those seeking to understand this most dynamic of markets." --Lorna Davis, President and Chairman, Kraft Foods China

"a scintillating glimpse inside one of the most hard-fought cross-cultural indulgence battles since the Opium Wars" --Global Times

"In Chocolate Fortunes, Allen describes these strategies in detail, offering a fair, informed and often fascinating assessment of where they succeeded and where they failed.... Chocolate Fortunes is a case study that delivers broad, transferable advice to Western corporations looking to move into one of the world's largest and most potentially lucrative markets. Offering unusual insight into the complexities of manufacturing and selling Western goods in China for Chinese consumers, the stories of the Big Five combine the emotional power of the cautionary tale with the practical precision of the how-to book. Far more elementally, Chocolate Fortunes is a helpful primer on basic business practice." --Knowledge@Wharton

Product Details

ISBN-13:
9780814438121
Publisher:
AMACOM Books
Publication date:
10/01/2009
Pages:
256
Product dimensions:
6.13(w) x 9.25(h) x (d)
Age Range:
18 Years

Read an Excerpt

Introduction: One Country, Three Centuries

China’s breathtaking transformation from a

command to a market-socialist economy over

the past twenty-five years has turned some 300

million of its 1.3 billion people into ravenous consumers of

everything from candy to cars. And until twenty-five years

ago, almost none of them had ever eaten a piece of chocolate.

They were, to coin a phrase, ‘‘chocolate virgins,’’ their taste for

chocolate ready to be shaped by whichever chocolate company

came roaring into the country with a winning combination

of quality, marketing savvy, and manufacturing and

distribution acumen. In short, China was the next great frontier,

a market of almost limitless potential to be conquered in

a war between the world’s leading chocolate companies for

the hearts, minds, and taste buds—and ultimately the wallets—

of China’s consumers. To the victor of the chocolate

wars would go the spoils of over a billion potential customers

for generations to come.

Despite China’s radical transformation over the past quarter

century, from economic basket case to economic powerhouse,

it is still a work in progress. Figuratively speaking, in

China today there are fewer than 50 million people living in

the twenty-first century, about 300 million living in various

stages of the twentieth century, and nearly a billion people

living in the latter part of the nineteenth century. Nevertheless,

China’s economic renaissance over the past two and a

half decades has been nothing short of astonishing, especially

considering the havoc wreaked by the failed economic, social,

and cultural experiments of the 1950s, 1960s, and 1970s—and

the brutality with which they were carried out. This period

would, however, prove to be the dark hour before the dawn

of China’s emergence, under Deng Xiaoping,1 into the global

economy, a process begun in the late 1970s.

And while China’s transformation is unprecedented, so

too was the establishment of foreign businesses within a

major country undergoing a complete economic and social

transformation from a centrally planned economy to a

market-socialist economy.

• *

For seven years, between 1998 and 2006, I was a foot soldier

in the ‘‘chocolate war,’’ first as an executive with Hershey, and

later Nestle´, two of the world’s largest manufacturers of chocolate;

as such, I was on the front lines of a battle for the hearts,

minds, and taste buds of more than a quarter billion people

constituting China’s new consumer class.

This book is the story of the five global titans of chocolate—

Ferrero, Cadbury, Hershey, Nestle´, and Mars—that bat-

tled to capture a once-in-a-lifetime opportunity to establish

their brands with one-fifth of the world’s population. It is also

the inside story of East meeting West through the introduction

into China, a xenophobic land of austerity and deprivation,

of an icon of the Western world’s decadence and selfindulgence:

chocolate.

When I first arrived in China in the 1980s, I was a newly

minted MBA; a twenty-something, ‘‘me-generation’’ American

looking for adventure and riches in this vast economic frontier.

The country was then in the early, experimental phase

of its social and economic transformation, and trying to do

business there meant wading endlessly through the detritus

of vestigial government organs and policies while attempting

to find purchase on its ever-changing economic and regulatory

landscape. A high tolerance for ambiguity was essential.

Two early experiences exemplify the Alice in Wonderland

nature of doing business there at the time, and it is a tale

of two cities: Beijing, the belly of China’s centrally planned

communist beast; and Shenzhen, the tip of the spear of China’s

economic reforms.

During my final semester of graduate school at the Thunderbird

School of Global Management, I co-founded Transnational

Trade Services, a general trading company with

glamorous headquarters in my Arizona dorm room. My most

promising client was an American antiques buyer, and shortly

after graduation I traveled to China together with my classmate

and Chinese business partner, Li Jianmin, to find a

source for Chinese antiques.

Upon arriving in Beijing we went to meet a former associate

of Li’s, a branch manager of a state-owned trading company,

to see whether he could help us locate and export

antiques. His office was located in an unimpressive, sootcovered

one-story government building; it was not exactly an

auspicious beginning, and our fortunes didn’t improve from

there. Though we were greeted politely, through Li’s trustworthy

translation and my basic Mandarin Chinese, it quickly became

clear that this gentleman was a midlevel, lifelong

bureaucrat comfortably ensconced in a large bureaucracy. As

we talked, I became increasingly mindful of the portrait of

Chairman Mao,2 literally and figuratively looking over his

shoulder. Throughout our discussion he was consistently

oblique and noncommittal.

The business we were proposing would be new to him and

his department, he said, and would require approvals from

many different people in many different agencies. This would

be difficult and would take time. Finding the antiques we were

looking for would also be a time-consuming process, and even

with the approvals and the goods in hand, export procedures

would be cumbersome. Where we saw opportunity he saw

barriers. Perhaps, we thought, we would make more progress

over a meal, and we invited our host to lunch. By the time we

left the building for a nearby restaurant, we had nearly a

dozen of his colleagues in tow. It seemed he’d invited nearly

everyone in his office. Far too much food and too many bottles

of wine were ordered, and when we parted my lunch guests

were loaded down with doggie bags full of food and wine, a

bounty they would share with grateful families that evening.

As I reflected on what had gone wrong, I realized that, for

many in China, it must be difficult and risky to break with old

habits. This gentleman had nothing to gain from meeting with

us—other than a free lunch with enough left over for his family.

If something went wrong, he would have a problem on his

hands. If he did nothing, he would still get his government

pay, housing, and benefits. Why take a chance? I clearly had a

lot to learn about doing business in China.

Meet the Author

LAWRENCE L. ALLEN (Beijing, China) is a former senior executive for both Hershey and Nestlé in China. He has spent more than 20 years building consumer brands for multinational companies in China.

Customer Reviews

Average Review:

Write a Review

and post it to your social network

     

Most Helpful Customer Reviews

See all customer reviews >