History of Cadbury

1824–1900: Early history

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In 1824, John Cadbury began selling tea, coffee, and drinking chocolate in Bull Street in Birmingham, England. From 1831 he moved into the production of a variety of cocoa and drinking chocolates, made in a factory in Bridge Street and sold mainly to the wealthy because of the high cost of production. In 1847 John Cadbury became a partner with his brother Benjamin and the company became known as “Cadbury Brothers”

000_cadburys_01The brothers opened an office, in London and in 1854 they received the Royal Warrant as manufacturers of chocolate and cocoa to Queen Victoria. The company went into decline in the late 1850s.

John Cadbury’s sons Richard and George took over the business in 1861. At the time of the takeover, the business was in rapid decline: the number of employees had reduced from 20 to 11, and the company was losing money. By 1864 Cadbury was profitable again. The brothers had turned around the business by moving the focus from tea and coffee to chocolate, and by increasing the quality of their products.

The firm’s first major breakthrough occurred in 1866 when Richard and George introduced an improved cocoa into Britain. A new cocoa press developed in the Netherlands removed some of the unpalatable cocoa butter from the cocoa bean. The firm began exporting its products in the 1870s. In the 1880s the firm began to produce chocolate confectioneries.

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In 1878 the brothers decided to build new premises in countryside four miles from Birmingham. The move to the countryside was unprecedented in business. Better transport access for milk that was inward shipped by canal, and cocoa that was brought in by rail from 000_cadburys_03London, Southampton and Liverpool docks was taken into consideration. With the development of the Birmingham West Suburban Railway along the path of the Worcester and Birmingham Canal, they acquired the Bournbrook estate, comprising 14.5 acres (5.9 ha) of countryside 5 miles (8.0 km) south of the outskirts of Birmingham. Located next Stirchley Street railway station, which itself was opposite the canal, they renamed the estate Bournville and opened the Bournville factory the following year.

In 1893, George Cadbury bought 120 acres (49 ha) of land close to the works and planned, at his own expense, a model village which would ‘alleviate the evils of modern more cramped living conditions’. By 1900 the estate included 314 cottages and houses set on 330 acres (130 ha) of land. As the Cadbury family were Quakers there were no pubs in the estate.

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In 1897, following the lead of Swiss companies, Cadbury introduced its own line of milk chocolate bars.

In 1899 Cadbury became a private limited company.

1900–1969

000_cadburys_02In 1905, Cadbury launched its Dairy Milk bar, a production of exceptional quality with a higher proportion of milk than previous chocolate bars. Developed by George Cadbury Jr, it was the first time a British company had been able to mass-produce milk chocolate. From the beginning, it had the distinctive purple wrapper. It was a great sales success, and became the company’s best selling product by 1914. The stronger Bournville Cocoa line was introduced in 1906. Cadbury Dairy Milk and Bournville Cocoa were to provide the basis for the company’s rapid pre-war expansion. In 1910, Cadbury sales overtook those of Fry for the first time. By 1914, exports accounted for 40 percent of Cadbury’s sales.

Cadbury’s Milk Tray was first produced in 1915 and continued in production throughout the remainder of the First World War. More than 2,000 of Cadbury’s male employees joined the Armed Forces and to support the war effort, Cadbury provided clothing, books and chocolate to soldiers. After the war, the Bournville factory was redeveloped and mass production began in earnest. In 1918, Cadbury opened their first overseas factory in Hobart, Tasmania.

000_cadburys_07In 1919 Cadbury merged with J. S. Fry & Sons, another leading British chocolate manufacturer, resulting in the integration of well-known brands such as Fry’s Chocolate Cream and Fry’s Turkish Delight. In 1921, the many small Fry’s factories around Bristol were closed down, and production was consolidated at a new factory in Somerdale, outside Bristol.

Inter-war Britain saw cocoa replaced by chocolate (especially milk chocolate bars) as Britain’s preferred product.

Fruit and Nut was introduced as part of the Dairy Milk line in 1928, soon followed by Whole Nut in 1933. By this point, Cadbury was the brand leader in the United Kingdom. These were accompanied by several other products: Flake (1920), Cream-filled eggs (1923), Crunchie (1929) (Crunchie was originally launched under the Fry’s name but later adopted by Cadbury’s) and Roses (1938).

By 1930 Cadbury had become the 24th largest British manufacturing company as measured by estimated market value of capital. Cadbury took direct control of the under-performing Fry in 1935. By 1936, Dairy Milk accounted for 60 percent of the UK milk chocolate market.

000_cadburys_10Chocolate ceased to be a luxury product and became affordable to the working classes for the first time. By the mid-1930s, Cadbury estimated that 90 percent of the British population could afford to buy chocolate.

During World War II, parts of the Bournville factory were turned over to war work, producing milling machines and seats for fighter aircraft. Workers ploughed football fields to plant crops. As chocolate was regarded as an essential food, it was placed under government supervision for the entire war. The wartime rationing of chocolate ended in 1950, and normal production resumed. Cadbury subsequently invested in new factories and had an increasing demand for their products.

In 1952 the Moreton factory was built. In 1956, Cadbury began manufacturing in Bombay.

In 1967 Cadbury acquired an Australian confectioner, MacRobertson’s, beating a rival bid from Mars. As a result of the takeover, Cadbury built a 60 percent market share in the Australian market. The acquisition brought such brands as Freddo and Snack to the Cadbury roster.

Schweppes merger and demerger (1969 – 2007)

000_cadburys_08The Cadbury Schweppes logo used until the demerger in 2008 Cadbury merged with drinks company Schweppes to form Cadbury Schweppes in 1969. Head of Schweppes, Lord Watkinson, became chairman, and Adrian Cadbury became deputy chairman and managing director. The benefits of the merger were to prove elusive.

The merger put an end to Cadbury’s close links to its Quaker founding family and its perceived social ethos by instilling a capitalist venture philosophy in management.

The 1970s saw the development and launch of a number of chocolate bars: the Curly Wurly, the Double Decker and Caramel. After a landmark advertising campaign, the sales of Flake quadrupled. However the launch of the Rowntree Yorkie chocolate bar in the UK in 1976 seriously dented the sales of Dairy Milk, and Cadbury’s UK market share declined to 20 percent. In order to counter a declining market share, Cadbury reduced its number of lines from 78 to 33, and installed state-of-the-art technology at the Bourneville plant.

000_cadburys_04In 1978 the company acquired Peter Paul, the third largest chocolate manufacturer in the United States for $58 million, which gave it a 10 percent share of the world’s largest confectionery market. The highly successful Wispa chocolate bar was launched in the North East of England in 1981, and nationwide in 1984. In 1982, trading profits were greater outside of Britain than in the UK for the first time.

In 1986, Cadbury Schweppes sold its Beverages and Foods division to a management buyout known as Premier Brands for £97 million. This saw the company divest itself of such brands as Typhoo Tea, Kenco, Smash and Hartley Chivers jam. The deal also saw Premier take the license for production of Cadbury brand biscuits and drinking chocolate. In 1988, Cadbury US was sold to Hershey for $300 million.

In 1986, Schweppes switched its alliance in the UK from Pepsi to Coca-Cola, taking a 51 percent stake in the joint venture Coca-Cola Schweppes. In 1986, the company acquired Canada Dry and Sunkist from RJR Nabisco for $230 million, and took a 30 percent stake in Dr Pepper. As a result of these acquisitions, Cadbury Schweppes became the third largest soft drinks manufacturer in the world.

000_cadburys_06In 1987, General Cinema took an 18 percent stake in the company. General Cinema divested itself of the stake in 1990.

Snapple, Mistic and Stewart’s were sold by Triarc to Cadbury Schweppes in 2000 for $1.45  billion. In October of that same year, Cadbury Schweppes purchased Royal Crown from Triarc.

In 2003, Cadbury dropped the ‘s’ from its name and renamed the brand to Cadbury. The reason behind this change was because the company found that it was a much more suited, rounded name than the previous “Cadbury’s”. This change was officially announced on the 19th of December, 2002.

In March 2007, it was revealed that Cadbury Schweppes was planning to split its business into two separate entities: one focusing on its main chocolate and confectionery market; the other on its US drinks business. The demerger took effect on 2 May 2008, with the drinks business becoming Dr Pepper Snapple Group. In December 2008 it was announced that Cadbury was to sell its Australian beverage unit to Asahi Breweries.