Cadbury

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Cadbury

Type Subsidiary of Kraft Foods

Industry Confectionery
Founded 1824
Headquarter Uxbridge, London, United
s Kingdom
Products See list of Cadbury products
Revenue GB£5,384 million (2008)
Operating GB£388 million (2008)
income
Net income GB£364 million (2008)
Employees 71,657 (2008)[1]
Parent Kraft Foods
Website Cadbury.co.uk

Cadbury plc is a British confectionery company, the industry's

second-largest globally after the combined Mars-Wrigley.[2]
Headquartered in Cadbury House in the Uxbridge Business Park in
Uxbridge, London Borough of Hillingdon, England and formerly listed
on the London Stock Exchange, Cadbury was controversially
acquired by Kraft Foods in February 2010, after integration the
combined Cadbury and Kraft companies became the largest
confectionery company in the world again.

The company was an ever-present constituent of the FTSE 100 from

the index's 1984 inception until its 2010 takeover.[3][4]

The firm was known as "Cadbury Schweppes plc" from 1969 until a
May 2008 demerger, in which its global confectionery business was
separated from its U.S. beverage unit, which has been renamed Dr
Pepper Snapple Group.[5]

Contents
[hide]

• 1 History
o 1.1 Early history
o 1.2 1900 to 1950s
o 1.3 Merger with
Schweppes
o 1.4 Demerger
o 1.5 Recent
developments
o 1.6 Kraft Foods
takeover
• 2 Operations
o 2.1 United Kingdom
o 2.2 Ireland
o 2.3 United States
o 2.4 Australia and New
Zealand
o 2.5 India
• 3 Executive pay
• 4 Accounting
• 5 Products
• 6 Health and safety
o 6.1 2006 Salmonella
scare
o 6.2 2007 recalls
o 6.3 2008
o 6.4 2009
Hydrogenation
• 7 Head office
• 8 See also
• 9 References
 • 10 Further reading

• 11 External links

[edit] History

[edit] Early history

In 1824, John Cadbury began selling tea, coffee, and drinking

chocolate, which he produced himself, at Bull Street in Birmingham,
England. John Cadbury later moved into the production of a variety
of Cocoas and Drinking Chocolates being manufactured from a
factory in Bridge Street, supplying mainly to the wealthy due to the
high cost of manufacture at this time. During this time a partnership
was struck between John Cadbury and his brother Benjamin. At this
time the company was known as 'Cadbury Brothers of Birmingham'.
[6]

The two brothers opened an office in London and in 1854 received

the Royal Warrant as manufacturers of chocolate and cocoa to
Queen Victoria. Around this time in the 1850s the industry received
a much needed boost with the reduction in high import taxes on
cocoa; this allowed chocolate to become more affordable to
everyone.

Due to the popularity of a new expanded product line, including the

very popular Cadbury's Cocoa Essence, the company's success led
to the decision in 1873 to cease the trading of tea. Around this time,
master confectioner Frederic Kinchelman was appointed to share his
recipe and production secrets with Cadbury, which led to an
assortment of various chocolate covered items.

Having taken over the business in 1861, John Cadbury's sons

Richard and George decided in 1878 that they needed to find new
premises. Requiring better transport access for milk that was inward
shipped by canal, and cocoa that was brought in by rail from
London, Southampton and Liverpool docks, the Cadburys started
looking for a new greenfield site. Noticing the development of the
Birmingham West Suburban Railway south along the path of the
Worcester and Birmingham Canal, in 1878 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 right
next to the new Stirchley Road railway station, itself directly
opposite the canal, they renamed the Bournbrook estate to
Bournville and opened the Bournville factory in 1879.

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 313 cottages and houses set on
330 acres (130 ha) of land. As the Cadbury family were Quakers
there were no pubs in the estate;[7] in fact, it was their Quaker
beliefs that first led them to sell tea, coffee and cocoa as
alternatives to alcohol.[8]

[edit] 1900 to 1950s

Somerdale Factory from 1919 merger with Fry's

In 1905, Cadbury's launched its Dairy Milk bar, with a higher

proportion of milk than previous chocolate bars, and it became the
company's best selling product by 1913. 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's was the brand leader in
the United Kingdom. These were accompanied by several other
products: Flake (1920), Cream-filled eggs (1923), Crunchie (1929)
and Roses (1938).[9] 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 and in 1919 undertook a merger with J. S. Fry &
Sons, another chocolate manufacturer, resulting in the integration of
well-known brands such as Fry's Chocolate Cream and Fry's Turkish
Delight.[6] 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 1949, and normal production resumed. Cadbury
subsequently built new factories and had an increasing demand for
their products.[6]

[edit] Merger with Schweppes

The Cadbury Schweppes logo used until the demerger in 2008

Cadbury merged with drinks company Schweppes to form Cadbury

Schweppes in 1969.[10]

Cadbury Schweppes went on to acquire Sunkist, Canada Dry, Typhoo

Tea and more. In the US, Schweppes Beverages was created and the
manufacture of Cadbury confectionery brands were licensed to
Hershey's.

Snapple, Mistic and Stewart's (formerly Cable Car Beverage) were

sold by Triarc to Cadbury Schweppes in 2000 for $1.45 billion.[11] In
October of that same year, Cadbury Schweppes purchased Royal
Crown from Triarc.[12]

[edit] Demerger

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.[13] The demerger took effect on 2 May 2008, with
the drinks business becoming Dr. Pepper Snapple Group Inc.[5] In
December 2008 it was announced that Cadbury was to sell its
Australian beverage unit to Asahi Breweries.[14]

[edit] Recent developments

In October 2007, Cadbury announced the closure of the Somerdale

Factory, Keynsham, formerly part of Fry's. Between 500 and 700
jobs were affected by this change. Production transferred to other
plants in England and Poland.[15]

In 2008 Monkhill Confectionery, the Own Label trading division of

Cadbury Trebor Bassett was sold to Tangerine Confectionery for
£58million cash. This sale included factories at Pontefract,
Cleckheaton and York and a distribution centre near Chesterfield,
and the transfer of around 800 employees.[16]

In mid-2009 Cadbury replaced some of the cocoa butter in their non-

UK chocolate products with palm oil. Despite stating this was a
response to consumer demand to improve taste and texture, there
was no "new improved recipe" claim placed on New Zealand labels.
Consumer backlash was significant from environmentalists and
chocolate lovers. By August 2009, the company announced that it
was reverting to the use of cocoa butter in New Zealand.[17] In
addition, they would source cocoa beans through Fair Trade
channels.[18] In January 2010 prospective buyer Kraft pledged to
honour Cadbury's commitment.[19]

[edit] Kraft Foods takeover

On 7 September 2009 Kraft Foods made a £10.2 billion (US$16.2

billion) indicative takeover bid for Cadbury. The offer was rejected,
with Cadbury stating that it undervalued the company.[20] Kraft
launched a formal, hostile bid for Cadbury valuing the firm at
£9.8 billion on 9 November 2009.[21] Business Secretary Peter
Mandelson warned Kraft not to try to "make a quick buck" from the
acquisition of Cadbury.[22] On 19 January 2010, it was announced
that Cadbury and Kraft Foods had reached a deal and that Kraft
would purchase Cadbury for £8.40 per share, valuing Cadbury at
£11.5bn (US$18.9bn). Kraft, which issued a statement stating that
the deal will create a "global confectionery leader", had to borrow
£7 billion (US$11.5bn) in order to finance the takeover.[23]

The Hershey Company, based in Pennsylvania, manufactures and

distributes Cadbury-branded chocolate (but not its other
confectionery) in the United States and has been reported to share
Cadbury's "ethos".[24] Hershey had expressed an interest in buying
Cadbury because it would broaden its access to faster-growing
international markets.[25] But on 22 January 2010, Hershey
announced that it would not counter Kraft's final offer.[26][27][28]

The acquisition of Cadbury faced widespread disapproval from the

British public, as well as groups and organisations including trade
union Unite,[29] who fought against the acquisition of the company
which, according to Prime Minister Gordon Brown, was very
important to the British economy.[30] Unite estimated that a takeover
by Kraft could put 30,000 jobs "at risk",[24][31][32] and UK shareholders
protested over the Mergers and Acquisitions advisory fees charged
by banks. Cadbury's M&A advisers were UBS, Goldman Sachs and
Morgan Stanley.[33][34][35] Controversially, RBS, a bank 84% owned by
the United Kingdom Government, funded the Kraft takeover.[36][37]

On 2 February 2010, Kraft secured over 71% of Cadbury's shares

thus finalising the deal.[38] Kraft had needed to reach 75% of the
shares in order to be able to delist Cadbury from the stock market
and fully integrate it as part of Kraft. This was achieved on 5
February 2010, and the company announced that Cadbury shares
would be de-listed on 8 March 2010.[39]

On 3 February 2010, the Chairman Roger Carr, chief executive Todd

Stitzer and chief financial officer Andrew Bonfield[40] all announced
their resignations. Stitzer had worked at the company for 27 years.
[41]

On 9 February 2010, Kraft announced that they were planning to

close the Somerdale Factory, Keynsham, with the loss of 400 jobs.[42]
The management explained that existing plans to move production
to Poland were too advanced to be realistically reversed, though
assurances had been given regarding sustaining the plant. Staff at
Keynsham criticised this move, suggesting that they felt betrayed
and as if they have been "sacked twice".[43] On 22 April 2010, Phil
Rumbol, the man behind the famous Gorilla advertisement,
announced his plans to leave the Cadbury company in July following
Kraft's takeover.[44]

In June 2010 the Polish division, Cadbury-Wedel, was sold to Lotte of

Japan. The European Commission made the sale a condition of the
Kraft takeover. As part of the deal Kraft will keep the Cadbury, Hall's
and other brands along with two plants in Skarbimierz. Lotte will
take over the plant in Warsaw along with the E Wedel brand.[45]

[edit] Operations

[edit] United Kingdom

Main article: Cadbury UK

Cadbury plc also owns Trebor Bassett, Fry's, Maynards and Halls.
The confectionery business in the UK is called Cadbury UK (formerly
Cadbury Trebor Bassett) and, as of August 2004, had eight factories
and 3,000 staff in the UK. Biscuits bearing the Cadbury brand, such
as Cadbury Fingers, are produced under licence by Burton's Foods.
Ice cream based on Cadbury products, like 99 Flake, is made under
licence by Frederick's Dairies. Cadbury cakes and chocolate spread
are manufactured under licence by Premier Foods, but the cakes
were originally part of Cadbury Foods Ltd with factories at Blackpole
in Worcester and Moreton on the Wirral with distribution depots
throughout the UK.

[edit] Ireland

Main article: Cadbury Ireland

Cadbury Ireland Limited is a confectionery company in Ireland based

in Coolock in Dublin. Cadbury's opened their first Irish factory in
Ossary RD., Dublin in 1933. More than €250 million worth of
Cadbury chocolate is produced in Ireland, is exported every year,
bringing Ireland valuable earnings from abroad.

[edit] United States

Main article: Cadbury Adams

Cadbury plc's presence in the States consists of the confectionery

unit Cadbury Adams, manufacturers of gum and mints but not
chocolate. Cadbury merged with Peter Paul in 1978.[46] Ten years
later Hershey's acquired the chocolate business from Cadbury's.[46]
Accordingly, although the Cadbury group's chocolate products have
been sold in the US since 1988 under the Cadbury name, the
chocolate itself has been manufactured by Hershey's and can be
found in Hershey's chocolate stores. Prior to the May 2008
demerger, the North American business also contained beverage
unit Cadbury Schweppes Americas Beverages. In 1982, Cadbury
Schweppes purchased the Duffy-Mott Company.[47]

[edit] Australia and New Zealand

On 27 February 2009 the confectionery and beverages businesses

of Cadbury Schweppes Pty Ltd in Australia were formally separated
and the beverages business began operating as Schweppes
Australia Pty Ltd. In April 2009, Schweppes Australia was acquired
by Asahi Breweries.[48]

Cadbury also operate three Australian confectionery factories as

well as one in New Zealand; two in Melbourne, Victoria (Ringwood
and Scoresby), one in Hobart, Tasmania (Claremont), and one in
Dunedin, New Zealand. The Claremont factory was once a popular
tourist attraction and operated daily tours; however, the factory
ceased running full tours mid-2008, citing health and safety
reasons.[49] Cadbury has been upgrading its manufacturing facility at
Claremont, Tasmania, Australia, since 2001 [50]

[edit] India
Main article: Cadbury India

Cadbury India began its operations in India in 1948 by importing

chocolates. It now has manufacturing facilities in Thane, Induri
(Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal
Pradesh) and sales offices in New Delhi, Mumbai, Kolkata and
Chennai. The corporate head office is in Mumbai. Since 1965
Cadbury has also pioneered the development of cocoa cultivation in
India. For over two decades, Cadbury has worked with the Kerala
Agricultural University to undertake cocoa research.[51]

[edit] Executive pay

In 2008 Todd Stitzer, Cadbury's CEO, was paid a £2,665,000 bonus.

Combined with his annual salary of £985,000 and other payments of
£448,000 this gives a total remuneration of over £4 million.[52]

[edit] Accounting

In July 2007, Cadbury Schweppes announced that it would be

outsourcing its transactional accounting and order capture functions
to Shared Business Services (SBS) centres run by a company called
Genpact, (a businesses services provider) in India, China, and
Romania. This was to affect all business units and be associated
with U.S. and UK functions being transferred to India by the end of
2007, with all units transferred by mid-2009. Depending on the
success of this move, other accounting Human Resources functions
may follow. This development is likely to lead to the loss of several
hundred jobs worldwide, but also to several hundred jobs being
created, at lower salaries commensurate with wages paid in
developing countries.[53]

[edit] Products

Main article: List of Cadbury products

Cadbury plc manufactures chocolates and sweets such as the
popular Cadbury Dairy Milk.

Notable product introductions include:

• 1865: Cocoa Essence

• 1875: Easter Eggs
• 1897: Milk Chocolate
• 1897: Cadbury Fingers
• 1905: Dairy Milk
• 1908: Bournville Chocolate
• 1915: Milk Tray
• 1920: Flake
• 1923: Creme Egg
• 1929: Crunchie
• 1938: Roses
• 1948: Fudge
• 1960: Dairy Milk Buttons
• 1968: Picnic
• 1970: Curly Wurly
• 1974: Snack
• 1983: Wispa (relaunched 2007)
• 1985: Boost
• 1987: Twirl
• 1992: Time Out
• 1996: Fuse
• 2001: Brunch Bar, Dream and Snowflake
• 2010: Cadbury dairy milk silk (richer, finer milk chocolate),
Wispa Gold (originally launched 1995, relaunched for trial
period 2009 and made permanent in 2010) and Dairy Milk
Bliss

[edit] Health and safety

[edit] 2006 Salmonella scare

On 19 January 2006, Cadbury Schweppes detected a rare strain of

the Salmonella bacteria, affecting seven of its products, said to have
been caused by a leaking pipe. The leak occurred at its Marlbrook
plant, in Herefordshire, which produces chocolate crumb mixture;
the mixture is then transported to factories at Bournville and
Somerdale to be turned into milk chocolate.[54]

Cadbury Schweppes officially notified the Food Standards Agency,

shortly after which it recalled more than a million chocolate bars.[54]

In December 2006, the company announced that the cost of dealing

with the contamination would reach £30 million.[55][56]

In April 2007, Birmingham City Council announced that it would be

prosecuting Cadbury Schweppes in relation to three alleged
offences of breaching health and safety legislation. An investigation
being carried out at that time by Herefordshire Council led to a
further six charges being brought.[55] The company pleaded guilty to
all nine charges,[57][58] and was fined 1 million pounds at Birmingham
Crown Court—the sentencing of both cases was brought together.[59]
Analysts have said the fine is not material to the group, with
mitigating factors limiting the fine being that the company quickly
admitted its guilt and said it had been mistaken that the infection
did not pose a threat to health.[59]

[edit] 2007 recalls

On 10 February 2007, Cadbury announced they would be recalling a

range of products due to a labelling error. The products were
produced in a factory handling nuts, potential allergens, but this was
not made clear on the packaging. As a precaution, all items were
recalled.[60]

On 14 September 2007, Cadbury Schweppes investigated a

manufacturing error over allergy warning, recalling for the second
time in two years thousands of chocolate bars. A Printing mistake at
Somerdale Factory resulted in the omission of tree nut allergy labels
from 250 g Dairy Milk Double Chocolate bars.[61]
[edit] 2008

On 29 September 2008 Cadbury withdrew all of its 11 chocolate

products made in its three Beijing factories, on suspicion of
contamination with melamine. The recall affected the mainland
China markets, Taiwan, Hong Kong and Australia.[62] Products
recalled included Dark Chocolate, a number of products in the 'Dairy
Milk' range and Chocolate Éclairs.[63]

[edit] 2009 Hydrogenation

Cadbury continues to use hydrogenated oils in many of its signature

products. Although trans fats are present, the nutrition labels round
the values down to zero.[64]

[edit] Head office

Cadbury's head office is the Cadbury House in the Uxbridge

Business Park in Uxbridge, London Borough of Hillingdon, England[65]
The Cadbury occupies 84,000 square feet (7,800 m2) of space in its
head office, which is Building 3 of the business park.[66] Cadbury,
which leases space in the building it occupies, had relocated from
central London to its current head office.[67]

Cadbury's previous head office was in 25 Berkeley Square in

Mayfair, City of Westminster. In 1992 the company leased the space
for £55 per 1 square foot (0.093 m2).[66] In 2002 the company agreed
to pay £68.75 per square foot. The Daily Telegraph reported in 2007
that the rent was expected to increase to a "three-figure sum." In
2007 Cadbury Schweppes had announced that it was moving to
Uxbridge to cut costs. As of that year the head office had 200
employees.[68] After the Kraft Foods acquisition of Cadbury, Kraft
announced that the Cadbury head office would remain the "Cadbury
House."[69]
[edit] See also
London
portal
Companies
portal
Food portal

• Big Chocolate
• Cadbury World, Birmingham
• Cadbury World, Dunedin
• Eyebrows (advertisement)
• Gorilla (advertisement)
• Halls (cough drop)
• Stimorol