Cadbury

• 1. Introduction

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  Cadbury began not as a chocolate company but as a tea shop. On the 4th of March 1824, a Quaker named John Cadbury opened a small retail stall on Bull Street in Birmingham, selling tea, coffee, and drinking chocolate. Two centuries later, the brand he built would rank as the second-largest confectionery company in the world, operating in more than 50 countries and giving its name to one of Britain's most recognised exports. The purple wrapper of a Dairy Milk bar. The ritual of a Creme Egg. The seasonal arrival of Roses at Christmas. These are the touchstones the story reaches toward. But to understand how a small Quaker's shop became a global household name, you have to understand the family behind it, the model village they built for their workers, the wars they provisioned with chocolate, the corporate battles they lost, and the controversies that followed every generation. The questions worth carrying into that story are not just about chocolate. They are about what a family's values looked like when translated into a factory, a village, and eventually a publicly traded company. And about what happened when those values ran up against shareholder returns.

• 2. The Quaker Roots

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  John Cadbury's faith shaped the business from the start. As a Quaker, he abstained from alcohol, and drinking chocolate was, in his view, a respectable alternative to the pub. From 1831, he shifted from retail into production, running a factory on Bridge Street in Birmingham where cocoa and drinking chocolates were made. The cost of production kept his goods expensive, limiting his customers largely to the wealthy.

  In 1842, Cadbury began selling chocolate for eating, a move that may have made him among the first in Britain to do so. Five years later, in 1847, he partnered formally with his brother Benjamin under the name Cadbury Brothers, and that same year their competitor Fry's of Bristol produced what is regarded as the first chocolate bar. Cadbury followed with his own chocolate bar in 1849. Both companies showed their products publicly that year at a trade fair held at Bingley Hall in Birmingham.

  By the late 1850s, the company was struggling badly. When John's sons Richard and George took over in 1861, the workforce had shrunk from 20 employees to 11. The brothers turned things around by abandoning the tea and coffee trade and concentrating entirely on chocolate, and by lifting the quality of what they made. By 1866, the company was profitable again. That same year, Richard and George introduced an improved cocoa press, a Dutch innovation that removed unpalatable cocoa butter from the bean, and the business entered a new phase of growth. Within a few years, Cadbury had received a royal warrant as manufacturers to Queen Victoria, granted in 1854.

• 3. Bournville and the Model Village

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  In 1878, Richard and George Cadbury made a decision that was, as the source describes it, unprecedented in British business: they moved their operations out of the city. They bought the Bournbrook estate, 14.5 acres of countryside four miles south of Birmingham, located next to the Stirchley Street railway station and opposite the Worcester and Birmingham Canal. The canal brought in milk; the rail carried cocoa from the docks at London, Southampton, and Liverpool. They renamed the land Bournville and opened the factory there in 1879.

  George Cadbury's ambitions extended well beyond production. In 1893, he personally bought 120 acres of land adjacent to the works and paid out of his own pocket to build a model village, intending, in his own words, to 'alleviate the evils of modern more cramped living conditions'. By 1900, the estate held 314 cottages and houses spread across 330 acres. Because the Cadbury family were Quakers, there were no pubs on the estate. George's plan specified that one-tenth of the land should be kept as parks, open space, and recreation grounds. The factory became known locally as 'the factory in a garden'.

  The Bournville site today remains central to Cadbury's identity. Bournville now employs close to 1,000 people and houses Mondelez International's Global Centre of Excellence for chocolate research and development. In 2014, Mondelez announced a £75 million investment in the site. Cadbury's dark chocolate bar, also named Bournville, takes its name from the model village and was first sold in 1908.

• 4. Dairy Milk and the Wars

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  George Cadbury Jr, working alongside a research and development team, launched the Dairy Milk bar in 1905. It used a higher proportion of milk than any previous British milk chocolate, and it was the first time a British company had been able to mass-produce milk chocolate at all. The bar came wrapped in the now-iconic purple packaging from the beginning. By 1914, it had become the company's best-selling product, and by 1936 it accounted for 60 percent of the UK milk chocolate market. Cadbury had adopted purple in 1905 to honour Queen Victoria, who had died four years earlier.

  The First World War transformed the Bournville factory into something far beyond a confectionery plant. More than 2,000 of Cadbury's male employees enlisted in the British Armed Forces. George Cadbury handed over two company-owned buildings, 'The Beeches' and 'Fircroft', for use as military hospitals. Factory workers known as 'The Cadbury Angels' volunteered to launder the clothing of injured soldiers recovering there. The War Office gave its highest award to the management of both hospitals. Cadbury also sent chocolate, books, and clothing directly to the troops. In 1918, the company opened its first overseas factory in Hobart, Tasmania. Of the 16 women who travelled to Tasmania to set it up, seven returned to the UK, two married and stayed, two remained unmarried and stayed, and five left no record.

  The Second World War brought a different kind of disruption. Parts of the Bournville factory were converted to producing milling machines and seats for fighter aircraft. Workers dug up football fields to plant crops. The British government classified chocolate as an essential food and placed it under supervision for the entire war. Wartime rationing of chocolate did not end until 1950. Between the two world wars, Cadbury sent test packages to British schoolchildren to gather opinions on new products. One of those children was Roald Dahl, who later wrote Charlie and the Chocolate Factory.

• 5. Mergers and Corporate Shifts

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  Cadbury merged with J. S. Fry and Sons in 1919, absorbing brands including Fry's Chocolate Cream and Fry's Turkish Delight. The many small Fry's factories around Bristol were closed in 1921 and production was consolidated at a new Somerdale Factory outside the city. In 1930, Cadbury ranked as the 24th-largest British manufacturing company by estimated market value of capital.

  The merger with Schweppes in 1969 marked a turning point in the family's relationship to the business. Lord Watkinson of Schweppes became chairman, and Adrian Cadbury became deputy chairman and managing director. The close links to the founding Quaker family did not survive the arrangement. In 1978, the combined company paid $58 million for Peter Paul, the third-largest chocolate manufacturer in the United States, giving it a 10 percent share of that market. In 1982, trading profits from outside Britain exceeded domestic profits for the first time. In 1986, Cadbury Schweppes sold its Beverages and Foods division to a management buyout called Premier Brands for £97 million, shedding brands such as Typhoo Tea, Kenco, Smash, and Hartley Chivers jam.

  In August 1988, the US confectionery operations were sold to Hershey's for $284.5 million in cash plus the assumption of $30 million in debt. In 1992, company chairman Sir Adrian Cadbury, who had led the business for 24 years, produced the Cadbury Report through a committee set up by the London Stock Exchange. The report established a code of best practice that became a foundation for corporate governance reform around the world. Cadbury Schweppes acquired the Adams chewing gum operations from Pfizer in 2003 for $4.2 billion, briefly making Cadbury the world's largest confectionery company. The drinks and confectionery businesses formally separated on the 2nd of May 2008, with the drinks side becoming Dr Pepper Snapple Group and the chocolate business resuming the name Cadbury plc.

• 6. The Kraft Takeover

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  On the 7th of September 2009, Kraft Foods launched a £10.2 billion hostile takeover bid for Cadbury. Cadbury rejected it, stating that the offer undervalued the company. Kraft returned on the 9th of November 2009 with a formal hostile bid valuing the firm at £9.8 billion. UK Business Secretary Peter Mandelson publicly warned Kraft not to try to "make a quick buck" from the acquisition.

  Opposition was broad. Trade union Unite warned that a takeover could put 30,000 jobs at risk. UK shareholders protested over the advisory fees charged by banks. Cadbury's merger and acquisition advisers were UBS, Goldman Sachs, and Morgan Stanley. Controversially, RBS, at the time 84 percent owned by the UK government, provided funding for the Kraft bid. Hershey had also expressed interest in buying Cadbury but announced on the 22nd of January 2010 that it would not counter Kraft's final offer.

  On the 19th of January 2010, Cadbury and Kraft announced a deal: Kraft would buy Cadbury at £8.40 per share, valuing the company at £11.5 billion. Kraft had to borrow £7 billion to finance the purchase. On the 2nd of February 2010, Kraft secured over 71 percent of Cadbury's shares. On the 3rd of February, chairman Roger Carr, chief executive Todd Stitzer, and chief financial officer Andrew Bonfield all resigned. Stitzer had been with the company for 27 years. On the 9th of February, Kraft announced it would close the Somerdale Factory in Keynsham, with the loss of 400 jobs, despite earlier assurances about sustaining the plant. Staff described feeling as if they had been "sacked twice". On the 22nd of April 2010, Phil Rumbol, the man behind the famous Cadbury Gorilla advertisement, announced his departure for July. On the 4th of August 2011, Kraft announced it would split into two companies, with the snack and confectionery business becoming Mondelez International, of which Cadbury would become a subsidiary.

• 7. Advertising and Identity

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  The Cadbury script logo comes from the signature of William Cadbury, grandson of the founder, in 1921. It was adopted as the worldwide logo in the 1970s. The company trademarked purple for chocolate products with registrations in 1995 and 2004, though the validity of those trademarks has remained the subject of an ongoing dispute with Nestlé.

  A 60-second advertisement for Cadbury's Drinking Chocolate was the second commercial ever to air on British television, following Gibbs SR Toothpaste in the first ITV advertising break on the 22nd of September 1955. Cadbury introduced the 'glass and a half' slogan in 1928 to advertise the higher milk content of Dairy Milk, and the Creme Egg slogan 'How do you eat yours?' followed in 1985. The Flake Girl advertisements, running from 1959 onward, ranked 26th in Channel 4's 2000 poll of the 100 greatest UK adverts. Frank Muir's song for Cadbury Dairy Milk Fruit and Nut, running from 1977, ranked 36th. The Fry's Turkish Delight campaign featuring Jane Lumb, with the slogan 'Full of Eastern Promise', running from 1957, ranked 37th. The 'Milk Tray Man', a James Bond-style figure delivering chocolates in daring circumstances, has run since 1968 and ranked 48th in the same poll.

  The 2007 Gorilla advertisement for Cadbury Dairy Milk, set to Phil Collins's 'In the Air Tonight', won the Gold award at the British Television Advertising Awards in 2008. Cadbury's association with famous characters has been longstanding; a Paddington Bear-branded bar appeared in 1977, and Spice Girls-branded chocolate was released during the height of their popularity in the 1990s. On the 23rd of December 2024, it was announced that Cadbury would no longer hold its Royal Warrant under King Charles III, ending an association with the British monarchy that stretched back 170 years to the reign of Queen Victoria.