Nutella Doesn't Taste the Same Around the World

LOCALIZING THE PRODUCT: THAT'S HOW COMPANIES LIKE MCDONALD'S AND ALGIDA ACHIEVE THEIR GLOBAL REACH. DESPITE A GENERAL TREND TOWARD GLOBALIZATION, BIG FIRMS REALIZE THAT ADAPTING TO REGIONAL PREFERENCES CAN BRING BIG RETURNS

by Massimiliano Bruni, Food Beverage Knowledge Center, SDA Bocconi
Translated by Alex Foti

In spite of the many management theorists who have written in favor of the homogenization and standardization of the supply of products and services, the majority of companies think it’s more effective to localize products based on the needs and peculiarities of the various countries where they operate. This process of tailoring goods to fit national markets concerns both recipe and format, and often makes use of different brands for similar products.

A first example of product adaptation is varying recipes and tastes of products according to markets. Take the example of Viennetta, Algida’s ice-cream cake, which in Italy is marketed in the four vanilla, zabaione, choco nut, crème brulée and tiramisù flavors, while in the UK, you can also buy mint and strawberry in addition to vanilla. Sometimes differences are not so self-evident. It’s the case of Nutella, which is marketed in five different recipes, according to the tastes of consumers that the Alba-based multinational aims to serve. Another aspect is weight, i.e. size and servings of products, which can vary to take into account the various consumption styles around the world.

A second form of adaptation to local markets regards changes in food menus for restaurant chains. A case in point is McDonald’s, which in Italy offers pasta salads made by Barilla, and several sandwiches made with national foods, such as parmesan, speck, and other cheeses and cured meats, such as the introduction of sausage paninis. In 2011, for a few weeks McDonald’s served two gourmet sandwiches, Adagio and Vivace, created by Italian chef Gualtiero Marchesi.

A third form of local adaptation is changing the name of the product, or even the brand, to better leverage the relationship with final consumers in certain countries. For instance, the Algida brand, whose heart-shaped logo has spread around the world, is known as Walls in several countries.

Anyway size doesn’t matter, since localization affects both multinational corporations and SMEs. Actually, bigger firms have better understood the need to localize, and have the resources to do so, in spite of the overarching trend toward globalization. The search for economies of scale and standardization of manufacturing, distribution, and marketing processes clashes against the need to maximize the business opportunities offered by localization in each market. This is certainly true of the food & beverage industry, where local tastes, cultural factors, traditions, and climate differences still affect consumer choice and consumption modes in final markets.