The rise and fall of Cadbury

I was pondering about the rise and fall of Cadbury's chocolate in New Zealand recently. Cadbury was a once great brand - but was brought low by cost-cutting. Where once Cadbury was a name for quality, today it is a name for cheap and nasty chocolate in Aotearoa. 

The Cadbury's brand was founded by Quaker businessman, John Cadbury, in Birmingham in 1824 (Chinn, 1998; Crosfield, 1985; Ella, 2009; Ryan, 2017). Cadbury's merged with Fry's chocolate in the UK in 1918, becoming the British Cocoa & Chocolate Company, with Cadbury having three times the asset base of Fry's (Chrystal, 2012), but both brands being subsidiaries. In the US, Cadbury's has been licenced under Hershey's (Chrystal, 2012). In New Zealand, the Cadbury and Fry's brands amalgamated with Hudson's in 1930 to form Cadbury Fry Hudson, expanding the Hudson's plant in Dunedin (Ryan, 2017). The organisation was later renamed Cadbury Schweppes Hudson when Cadbury merged with Schweppes in 1969, becoming Cadbury Schweppes Plc. (Chinn, 1998). 

From what I have managed to glean from newspaper reports, the Cadbury factory in Dunedin needed to cut costs in 2009, so replaced some of the cocoa butter with palmolein (made from palm oil; Edmunds, 2017; Ryan, 2017; Underhill, 2017). I recall this making the chocolate waxy in texture, with a level of taste reduction. The mouth-feel was quite different; more slippery and slimy... like those over-emulsified Guylian shells. Ugh.

Internationally, an 'improved recipe' label was put on packaging following the recipe change, but the stickering did not happen in New Zealand. Kiwis complained, and - although the company initially denied changing the recipe - a number of in-house leaks made the denial increasingly implausible. Cadbury eventually owned up to the swap. The difference in taste, along with South East Asian deforestation and the impact on wildlife of palm oil - exacerbated by the company being less than honest about the change - hit the company hard (Edmunds, 2017; Ryan, 2017; Underhill, 2017). New Zealanders don't like being lied to. And they like even less being lied to by a company thought to be trustworthy.

It was a win for Whittakers as customers swapped en masse (Edmunds, 2017). Then later in 2009 (Richardson, 2010) there was an attempted hostile take-over of Cadbury Schweppes Plc. - including New Zealand's Cadbury Schweppes Hudson - by Kraft Foods which was finally agreed in February 2010 (Cadbury agrees Kraft takeover, 2010). 

Then the cost-cutting really recommenced, with Cadbury's products continuing to worsen in quality (Underhill, 2017). Kraft was divvied up and the snacks arm was rebranded in 2012 as Mondelez International (Why Kraft Split Into, 2016). Mondelez closed Cadbury's Dunedin factory in 2017, after 80 years of production, relocating all manufacturing to Australia (Edmunds, 2017; The bitter aftertaste to, 2017; Underhill, 2017). It has been suggested that the increasingly waxy taste of Cadbury's is due to a heat additive for more tropical markets (Chocolate maker behind Cadbury, 2013) now being being used in Australian production currently being sold in New Zealand. 

This was such an own goal by Cadbury's initially; then such a lack of market and cultural intelligence by Mondelez. And a once great brand was needlessly gutted, ending 80 years of brand loyalty in New Zealand; and almost 200 years in the UK (Chinn, 1998; Crosfield, 1985). 

I wonder what value does Mondelez thinks it received ...or still retains from this takeover?

Sam

References:

Cadbury agrees Kraft takeover bid. (2010, January 19). BBC. http://news.bbc.co.uk/2/hi/business/8467007.stm

Cadbury cuts 145 jobs in Dunedin. (2009, January 31). Stuff. https://www.stuff.co.nz/business/591401/Cadbury-cuts-145-jobs-in-Dunedin

Cadbury New Zealand. (2009, September 6). Cadbury Dairy Milk returns to Cocoa Butter only recipe. https://web.archive.org/web/20120313144653/http://www.cadbury.co.nz/About-Cadbury/News.aspx?newsID=47

Chocolate maker behind Cadbury, Toblerone to make confections that can withstand heat. (2013, June 10). Daily News. https://www.nydailynews.com/life-style/eats/chocolate-maker-confections-withstand-heat-article-1.1368540

Crosfield, J. F. (1985). A History of the Cadbury Family (Vol. 1). Cambridge University Press.

Edmunds, S. (2017, February 24). Cadbury backlash a win for Kiwi chocolate brand Whittaker's. https://www.stuff.co.nz/business/89733380/cadbury-backlash-a-win-for-kiwi-chocolate-brand

Ella, J. (2009, December 15). Cadbury: The legacy in Birmingham. BBC. http://news.bbc.co.uk/local/birmingham/hi/people_and_places/history/newsid_8412000/8412655.stm

Richardson, T. (2010, January 16). Get your hands off our sweets!. The Guardian. https://www.theguardian.com/theguardian/2010/jan/16/saving-cadbury-from-kraft-takeover

Ryan, H. (2017, February 23). The Big Read: Bitter aftertaste as Cadbury closes landmark Dunedin factory. New Zealand Herald. https://www.nzherald.co.nz/business/the-big-read-bitter-aftertaste-as-cadbury-closes-landmark-dunedin-factory/6HW2AT2343XQFBTR4BWHHDVY4Q/

The bitter aftertaste to Cadbury's closing. (2017, February 23). https://www.odt.co.nz/news/dunedin/bitter-aftertaste-cadburys-closing

Underhill, J. (2017, February 16). Cadbury to close doors on Dunedin factory after 80 years, eliminating 350 jobs. National Business Review. https://www.nbr.co.nz/cadbury-to-close-doors-on-dunedin-factory-after-80-years-eliminating-350-jobs/

Why Kraft Split Into Two Companies. (2016, May). https://www.foodindustry.com/articles/why-kraft-split-into-two-companies/