Who owns Cadbury? The current owners have ditched the founder’s ideals


Cadbury has soothed people’s cravings for sugary treats for almost 200 years. Most of its chocolate bar production happens in Bournville, where John Cadbury founded the iconic brand in 1824. The Bournville plant has churned out chocolate bars for over 116 years. 

The decision to move chocolate-bar production from the UK to Britain improved Cadbury’s standing among the British public. Despite having British roots, Cadbury is run by a multinational conglomerate based in the United States.

Key Takeaways

  • Founder John Cadbury’s sons made the company profitable after a period of decline in the 1850s.
  • Cadbury merged with Schweppes in 1969 and demerged in 2008.
  • Kraft Foods Inc. bought the Cadbury in 2010 for $19.6 billion.

Founder John Cadbury and his sons run the company on Quaker ideals

John Cadbury
John Cadbury (1802-1889) founder of Cadbury | Photo by Universal History Archive/Getty Images

John Cadbury started selling drinking chocolate, coffee, and tea in Bull Street, Birmingham. In a few years, he built a factory processing cocoa and a variety of drinking chocolates. Cadbury mostly sold to the wealthy due to the high production cost. 

Cadbury’s brother Benjamin joined the business to form the ‘Cadbury Brothers.’ In 1849, Cadbury made the company’s first chocolate bar. 

Despite a gradual decline in the 1850s, the brothers earned Royal Warrant as manufacturers of chocolate and cocoa to Queen Victoria. 

In 1861, Richard and George took over a company in rapid decline from their father. The brothers focused the company on chocolate production, abandoning coffee and tea, and improving cocoa’s quality. In five years, the brothers turned the company’s fortunes, making it profitable again. 

The Cadbury’s Quaker ideals meant that they often gave back to the community. Unlike today’s corporates, Cadbury’s aim wasn’t purely to make a profit; it was to earn money while improving the community. 

For instance, in 1893, George Cadbury bought 120 acres of land to build a model village that provided spacious living conditions to the populace. By 1900, George had increased the land to 330 acres. 

In 1919, Cadbury merged with J.S. Fry & Sons. The move led to the closure of many small Fry’s factories to move production to a new Somerdale Factory. In 1936, Cadbury accounted for more than half of the UK milk chocolate market. 

Cadbury has held a Royal Warrant from Queen Elizabeth II since 1955. 

Cadbury morphed into a capitalist venture after merging with Schweppes

In 1967, Cadbury built a 60% share in the Australian market by acquiring Australian confectioner, MacRobertson’s. Cadbury merged with drinks company Schweppes two years later to form Cadbury Schweppes. 

The merger distanced the company from its founders and the Quaker ideals they held dear – Cadbury became a capitalist venture with a resolute focus on profits. Hannah Fearn wrote for Independent:

“Sadly, the creation of the still-lively community at Bournville may have been the high point for this historic brand. The first signs of its descent from its origins as a force for social good – the lowermost slopes of which it finally traversed this week – were visible as early as the late 1960s.”

Cadbury’s demerger with Schweppes cost both companies over £1 billion

Cadbury Schweppes

Investors had long petitioned for a demerger of Cadbury Schweppes. US activist investor Nelson Peltz sparked the demerger after making public demands for a split. 

After exploring various options, Cadbury opted for a process involving conservative refinancing and no payout to investors. Cadbury and Schweppes didn’t anticipate that the complexities and tax payments of the demerger would cost over £1 billion. 

“The split is not without its costs,” Charlie Mills, an analyst, told The Guardian. “Indeed, at every turn it looks to us that the costs are going up. n total, we estimate the costs to be just over £1bn. This seems a high price for a bit of focusing.”

Despite the enormous costs, both companies pushed forward with the demerger. Cadbury and Schweppes stated that they needed room to expand and develop their businesses without the constraints placed by the 1969 merger. 

“Separating these two great businesses will enable two outstanding management teams to focus on generating further revenue growth, increasing margin, and enhancing returns for their respective shareowners,” CEO Todd Stitzer said

Larry Young, president and CEO of Schweppes, which changed its name to Dr. Pepper Snapple Group, said that DPS looked forward to working alone:

“Today marks the beginning of a new era for our business. We have a strong and sustainable business model and can leverage our integrated system for future growth. We have confidence in the beverage industry and we are looking forward to seizing the opportunities as a stand-alone company.”

The British public protested Cadbury’s acquisition by Kraft Foods Inc

Kraft Cadbury

In September 2009, Kraft Foods Inc. placed a $16.7 billion offer for Cadbury. Cadbury held out for months, forcing Kraft Foods to raise the bid to $19.6 billion. 

Cadbury’s executives accepted the bid on the last day British laws allowed Kraft to raise its offer. The holdout proved beneficial to Cadbury’s shareholders as the final price was 50% above Cadbury’s stock price in September 2009. 

“This is a bitter-sweet moment,” Cadbury Chairman Roger Carr said. “As a chairman of a public company you are paid and required to focus on shareholder value and the process which we have undertaken has delivered shareholder value.”

However, most analysts felt that Kraft got the better deal: the lack of competition meant Kraft had no pressure to raise its offer. Food and Beverage analyst Jon Cox told The New York Times:

“It’s sad to see another British company bought up by a multinational, but that’s finance. For Cadbury shareholders, it’s the best possible deal, given they were dealt a bum hand, because there were no counterbidders. The clear winner is Kraft.”

The deal sparked a wave of public protests supported by publications including The Mail on Sunday. Britons feared that the sale to a foreign company would affect the welfare of Britons. 

PM Gordon Brown assured people that Cadbury would continue investing in the UK and people wouldn’t lose their jobs. 

Kraft later broke some of its promises to the British people. For instance, Kraft had stated that it would continue using Fairtrade cocoa beans to produce its chocolate. Fairtrade rules guaranteed cocoa farmers £1,600 per ton of cocoa sold. 

In November 2016, Cadbury announced its dissociation from Fairtrade and adoption of Cocoa Life – which didn’t have the same price rules. Fairtrade demanded that farmers remain unaffected by Cadbury’s new deal, but the move demonstrated Kraft’s willingness to break its commitments.

Cadbury’s CEO Dirk Van de Put plans to promote sustainability and inclusivity

Dirk Van De Put, chairman and chief executive officer of Mondelez International Inc | Kyle Grillot/Bloomberg via Getty Images

Cadbury is a subsidiary of Mondelez International, an arm of Kraft. Dirk Van de Put serves as CEO and President of Mondelez International. 

Van de Put told CNBC that Cadbury plans to pioneer changes in the industry. “It’s exciting, it’s inspiring, but it’s complex,” Dirk said. “We will need to drive big changes, we will need to be a very different company.”

Dirk stated that the company has set goals to improve sustainability and is working towards them. Mondelez’s plans for 2025 include using 100% recyclable packaging, making strides towards using sustainable ingredients, and eliminating child labor. 

Van de Put also aspires to make Mondelez a more diverse and inclusive company. “We’re not where want to be,” Dirk said. “It is very clear in the organization that we are very serious about this.”

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