Cadbury plc

Type Subsidiary of Kraft Foods

Industry Confectionery

Founded 1824

Headquarters Uxbridge, London, United Kingdom

Products See list of Cadbury products

Revenue GB£5,384 million (2008)

Operating income GB£388 million (2008)

Net income GB£364 million (2008)

Employees 71,657 (2008)[1]

Parent Kraft Foods

Website www.cadbury.com

Cadbury was 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 acquired by Kraft Foods in February 2010. The firm
was known as "Cadbury Schweppes plc" from 1969 until a May 2008 demerger, which saw
the separation of its global confectionery business from its U.S. beverage unit.

HISTORY
[edit] Early history

In 1824, John Cadbury began vending 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 Cadbury's 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.

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 becomes 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).[10] 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 which saw 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 in which 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.

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.[11]

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.[12] In October of that same year, Cadbury Schweppes
purchased Royal Crown from Triarc.[13]

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.[14] 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.[15]

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.[16]

In 2008 Monkhill Confectionery, the Own Label trading division of Cadbury Trebor Bassett
was sold to Tangerine Confectionery for £58million cash.

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.[18] In
addition, they would source cocoa beans through Fair Trade channels.[19] In January 2010
prospective buyer Kraft pledged to honour Cadbury's commitment.

Kraft buyout

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.[21] Kraft launched a formal, hostile bid for Cadbury valuing the firm at £9.8 billion
on 9 November 2009.[22] Business Secretary Peter Mandelson warned Kraft not to try to
"make a quick buck" from the acquisition of Cadbury.[23] 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

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

Cadbury 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 Agriculture University to undertake cocoa research.[51]

[edit] Executive compensation

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.

Products
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
 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) and Wispa Gold

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 did not officially notify the Food Standards Agency until 19 June 2006,
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]