Introduction Throughout history chocolate has been associated with romance and sharing. Today the richness and smoothness of Cadbury chocolate is what makes it one of the world's favorite treats. Discover everything here that you want to know about Cadbury and chocolate, from historical facts to delicious recipes. You’ll also find facts about our exciting new products such as Cadbury Snaps and Cadbury Dairy Milk Wafer. Think delicious chocolate, think Cadbury.
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History of the company Cadbur Cadbury y has bee been n synon synonym ymous ous with with chocol chocolate ate since since 1824 1824, when John Cadbury opened his first shop, establishing a flourishing dynasty that today provides the world with many of its favourite favourite brands of chocolate. Learn about the fascinating history of chocolate : How cacao is the Mayan word for 'God food'; when and how chocolate was first introduced to Europe; how 'xocolatl' - a bitter frothy drink, beloved by Mont Mo ntez ezum umaa - made made the the tran transi siti tion on into into food food cent centur urie iess late later; r; and and ho how w its its reputation for heightening pleasure made it the stuff of myth and legend. Discover the history of Cadbury, from its social pioneering to the perfection of the recipe for Cadbury Dairy Milk; first launched in 1905, and still a market leader today. Find out all there is to know about making chocolate, and amaze yourse you rself lf with with the brand storie storiess and brand timeline timeline that that sho show w how many Cadbury brands have been favorites since the early 1900s When chocolate finally reached England in the 1650s , the high import duties on cocoa beans meant it was a drink only for the wealthy. Chocolate cost the equivalent of 50-75 pence a pound (approximately 400g), when pound sterling was worth considerably more than it is today. Gradually chocolate became more freely available. In 1657, London's first Chocolate House was open op ened ed by a Fren French chma man, n, who who prod produc uced ed the the firs firstt adve advert rtis isem emen entt for for the the chocolate drink to be seen in London: The hist The histor ory y of Cadb Cadbur ury y as manuf anufac actu ture rers rs of ch choc ocol olat atee pr prod oduc ucts ts in Birmingham dates back to the early part of the 19th century, when John Cadbury opened a shop in the centre of the city, trading as a coffee and tea dealer. Soon a new sideline was introduced - cocoa and drinking chocolate, which he prepared himself using a mortar and pestle. His lifelong involvement with the Temperance Society led him to provide tea, coffee and cocoa as an alternative to alcohol, believed to be one of the causes of so much misery and deprivation amongst working people in Britain at that time. Fashionable chocolate houses were soon opened where the people could meet friends and enjoy various rich chocolate drinks, many of which were
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rather bitter to taste, while discussing the serious political, social and business affairs of the day or gossiping The Cadbury family were closely involved in the evolution of drinking chocolate. From his grocery shop in Birmingham, where he sold mainly tea and coffee, John Cadbury started preparing cocoa and drinking chocolate, using cocoa beans imported from South and Central America and the West Indies. He experimented with a mortar and pestle to produce a range of cocoa and drinking chocolates with added sugar. By 1831 1831 the the coco cocoa a and and dr drin inki king ng ch choc ocol olat atee side side of the the bu busi sine ness ss had had expanded, so he rented a small factory in Crooked Lane not far from his shop and became a 'manufacturer of drinking chocolate and cocoa'. This was the real foundation of the Cadbury manufacturing business as it is today. The earliest preserved price list of 1842 shows that John Cadbury sold sixteen lines of drinking chocolate and cocoa in cake and powder forms. Customers would scrape a little off the block and mix it with hot milk or water. A solid chocolate for eating was introduced by John Cadbury in 1849, which by today's standards wouldn't be considered very palatable. In 1866 George Cadbury (John 's son) brought to England a press developed in Holland by Van Houten. The press changed the face of cocoa and chocolate production, as it was designed to remove some of the cocoa butter, enabling a less rich and more palatable drink to be produced. There was no longer any need to add the various types of flour and Cadbury's new cocoa essence was advertised as 'Absolutely pure...therefore pure...therefore Best'. Established by Richard and George Cadbury , two Victorian businessmen with with great great indust industria riall and social social vision vision,, Bourne Bournevil ville le Villag Villagee is a story story of industrial organization and community planning covering well over a century. It embraces the building of a factory in a pleasant 'green' environment environment (in stark contrast to the oppressive conditions of the Victorian industrial scene), the enhancement of employees' working conditions and overall quality of life and the creation of a village community with a balanced residential mix (both employees and non-employees). George Cadbury was a housing reformer interested in improving the living conditions of working people in addition to advancing working practices. Having built some houses for key workers when the Bourneville factory was built, in 1895 he bought 120 acres near the works and began began to build houses in line with the ideals of the embryonic Garden City movement.
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Motivation for building the Bournville Village was two-fold . George Cadbury wanted to provide affordable housing in pleasant surroundings for wage earners. But as the Bournville factory grew, local land increased in value and was ready to fall into the hands of developers. The last thing the brothers wanted was that their 'factory in a garden' would be hemmed in by monotonous streets. Dame Elizabeth Cadbury was involved in the planning of Bourneville with her husband, George. Her memoirs tell us how these plans became reality: "When I first came to Birmingham and we were living at Wood Brooke, morning after morning I would walk across the fields and farmland between our home and the Works planning how a village could be developed, where the roads should run and the type of cottages and buildings. Gradually this dream became reality , houses arose and many of the first tenants being men in Mr Cadbury's Adult School Class - which met every Sunday morning at 8.00am in Bristol Street - who had previously lived in the centre of the city and had never had a garden. Also workers in the factory became tenants. They too enjoyed their homes in the healthy surroundings , cultivating their gardens, rewarded in many instances by splendid crops of apples from the belt of apple trees which each tenant found at the bottom of his garden." The consequent availability of cocoa butter led to the development of the smooth creamy chocolate we know today.
History of Chocolate The origins of chocolate can be traced back to the ancient Maya and Aztec civilisations in Central America, who first enjoyed 'chocolate'; a much-prized spicy drink made from roasted cocoa beans. Chocolate was exclusively for drinking until the early Victorian era, when a technique for making solid 'eating' chocolate was devised. Throughout its history, whether as a cocoa, a drinking chocolate beverage or confectionery treat, chocolate has been a much sought after food. The story of cocoa begins with cocoa trees , which, for thousands of years, grew wild in the tropical rain forests of the Amazon basin and other tropical
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areas in Central and South America. Hundreds of years before cocoa was brought to Europe, the Maya Indians and the Aztecs recognised the value of cocoa beans both as an ingredient for their special drink and as currency.
Manufacturing process Making Chocolate Cadbury makes a variety of chocolates for different purposes but the two main types are Cadbury Dairy Milk, milk chocolate and Cadbury Bournville plain chocolate. The taste and texture of Cadbury chocolate are based on long traditions of expertise in recipe and processing unique to Cadbury. Techniques are improving all the time and new technology enables the whole process to be finely tuned to match evolving tastes and preferences. Production starts at the Chirk cocoa factory , where the highest quality cocoa beans are processed to produce cocoa mass containing 55% cocoa butter plus extracted cocoa butter, the basis for all chocolate products. When plain chocolate is made the 'mass' goes straight to the Bourneville factory in Birmingham while the 'mass' for milk chocolate production is taken to the Cadbury milk factory at Marl brook, Herefordshire, in the heart of English dairy country. At the milk processing factory fresh liquid full cream milk is cooked with sugar and condensed to a thick liquid. Cocoa mass is added, making a rich creamy chocolate liquid, which is then evaporated to make milk chocolate crumb. As these ingredients are cooked together the very special rich creamy taste of Cadbury chocolate is produced. 95,000 tonnes of crumb a year are produced at Marl brook to be made into chocolate at the Cadbury chocolate factories at Bourneville, Birmingham and Somerdale, Bristol. On arrival at the chocolate factory the crumb is pulverized by heavy rollers and mixed with additional cocoa butter and special chocolate flavorings. The amount of cocoa butter added depends on the consistency of the chocolate required: thick chocolate is needed for molded bars, while a thinner consistency is used for assortments and covered bars.
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In the UK up to 5% vegetable fat is added to compensate for variations in cocoa butter, allowing the melting properties of the chocolate to be controlled to a precise standard, and preserving the full taste and texture of the chocolate. Cadbury use carefully selected vegetable oils similar in nature to cocoa butter: African Shea, Indian Sal and Malaysian Palm oils are all part of the recipe. Both milk and plain chocolate , which has had sugar and cocoa butter added to the mass before pulverizing, undergo the same final special production stages, producing the famous smoothness, gloss and snap of Cadbury chocolate.
The Cocoa Tree Cocoa trees resemble English apple trees, seldom reaching more than 7.5 meters (25 feet) high. They are carefully pruned so that pods can be more easily harvested. To flourish they need to be shaded from direct sun and wind, particularly in the early stages of growth. Two methods are used to establish cocoa trees: Young trees are interspersed with new permanent or temporary shade trees such as coconut, plantains and bananas, following the clear felling of the forest. In Asia, where large plantations have been developed, cocoa trees and coconut trees are planted together and both crops are harvested commercially. Alternatively forests are thinned out and the cocoa trees are planted between established trees. Cocoa trees begin to bear fruit when they are 3-4 years old . Unusually, pink and white flowers and then pods grow straight out of the trunk and main branches. Like most tropical plants, flowers are present throughout the year but appear in abundance before the rain starts. Only a small proportion of all the flowers develop into fruit over a period of about five months. Each tree will yield 20-30 pods per year and in West Africa the peak time for harvesting is between September and December.
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The pods are hard and melon shaped, between 15-20cm long: each weighing about 450g each. When the pods are ripe they change from green to yellow, red or orange. Each pod contains 20-40 seeds, which when dried are the cocoa beans of commerce. It takes the whole year's crop from one tree to make 450gms of chocolate .
Final Production Stages The most important component of chocolate , as far as texture is concerned, is the fat, and the special processes known as conking and tempering are very carefully controlled to produce chocolate with the fat in a specific physical structure. The fat must coat individual particles of cocoa , milk and sugar, combining them together to form the solid chocolate. Conching involves mixing and beating the semi-liquid mixture to develop the flavor, removing unwanted volatile flavors and reducing the viscosity and particle size. Tempering is the final crucial stage. It is a complex process, which in simple terms involves mixing and cooling the liquid chocolate under carefully controlled conditions to ensure that the fat in the chocolate crystallizes in its most stable form. Highly sophisticated machinery has been developed for this process and the control of it is one of the skills of the chocolatier. Without the right tempering , the chocolate would be very soft and gritty, as large crystals would form and the lovely gloss and snap of top quality chocolate would soon disappear. Tempered chocolate is used in a number of ways to produce Cadbury's famous brands. Famous Brands Cadbury's chocolate production is a highly sophisticated, computer controlled process, with much of the new specialist machinery being produced to Cadbury's own design and specification.
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Products
NEW Cadbury Dairy Milk Wafer
Look out for the Cadbury Dairy Milk sponsored Coronation Street adverts and posters in support of the new product. Cadbury believes that Cadbury Dairy Milk and Wafer are made for each other in the same way that Strawberries & Cream, Tom & Jerry and Ant & Dec are perfect pairings.
Heroes History: Cadbury Heroes was launched in September 1999 Positioning :Tiny little bits of fun for everyone to share. A mix of Cadbury bars packed in a tub format that is ideal for informal everyday sharing. Consumers love to rummage and scrum mage in the tub to find their favorites. Includes Cadbury Dairy Milk, Cadbury Dairy Milk with Caramel, Cadbury Dairy Milk Whole Nut, Twirl, Time Out, Dream, Fudge, Crunchie, Picnic, Nuts About Caramel. Advertising : Cadbury Heroes was launched in September 1999 with the “People Magnet” campaign that features famous heroes being attracted to the tub. In 2002 a new campaign was introduced which showed adults in everyday situations sharing Heroes and having a “Tiny little bit of fun.”
The brand also features as part of Cadbury’s sponsorship of Coronation Street, where people play jokes on each other, whilst they share the tub of Heroes.
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Cadbury Dairy Milk History :
When Cadbury Dairy Milk chocolate was first introduced in the early 1900s it made an immediate impact quickly becoming the market leader. The success story has continued. It is still the top selling chocolate brand in the country and the Cadbury Mega Brand's broad family of products today has an international retail value approaching US$1billion. As an international brand Cadbury Dairy Milk carries the same distinctive image all over the world. Wherever you buy a bar of Cadbury Dairy Milk the pack design will be exactly the same, only the language will be different.The famous slogan "glass and a half of full cream milk in every half pound" with the picture of milk pouring into the chocolate bar, is one of the all-time greats of British advertising. The first two additions to the Cadbury Megabrand family were Fruit & Nut in 1928 followed by WholeNut in 1933. The family has since been extended and there are now 10 varieties of Cadbury Dairy Milk bars in the range. You can see more details by clicking on the links at the left handside of this page. Did you know? :
In addition to Cadbury Dairy Milk, Fruit & Nut and WholeNut are two of the best loved varieties of the Cadbury Megabrand. Australia, for example, offers 23 varieties including Snack, Caramello and Breakaway. You can enjoy Dairy Milk in many different ways including as miniatures, snack size multiple packs, treat size in bags, pocket packs, standard bars, 125g, 200g or 400g bars (for sharing, of course!), or as giant 1kg or 1.25kg bars. Cadbury Dairy Milk is enjoyed in over 30 countries. 9
Roses Positioning :
Original and very successful advertising has established Roses as the ideal way to say thank you. The distinctive blue cartons are the ideal size to be appropriate as a 'thank you' token gift, and the big blue tins are the best selection for the family at Christmas. Advertising :
The advertising idea of “say thank you with Cadbury Roses” was first introduced in 1979 and has been associated with the brand ever since. The most recent campaign introduced at Easter 2002, is based on the well-known fairytale goldilocks and the three bears. Goldilocks thanks the bears by leaving a box of Roses in their bed. Cadbury Roses also features as part of the Cadbury Coronation Street sponsorship, where a budgie gives a box of Roses to the Granddad and whistles the well known thank you very much music. Did you know? :
If you stretched each Roses chocolate sold in a year end to end, the line would stretch round the British coastline over three times. Cadbury Roses outsell Frozen Turkeys by 50% during the Christmas period. Over 1,300,000,000 Roses chocolates are sold every year in the UK – enough for 25 per person
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Flake History :
The Flake bar was originally launched in 1920; this was followed in 1930 by the Flake 99 ice cream accompaniment, and in 2001 by Snowflake (a crumbly white chocolate Flake centre covered in milk chocolate). A variety of different sizes of multipacks, Flake cakes and Ice cream cornets are now also widely available. Positioning :A true chocolate indulgence, its crumbly texture means that it forces you to stop what you are doing and devote your full attention to eating it. Advertising :Cadbury Flake has a very strong advertising history dating back to 1976 when the strapline 'The crumbliest, flakiest chocolate' was introduced. The advertising always features a woman who is choosing to enjoy her Flake moment in a unique, and dramatically indulgent way. Did you know? :Over 100 million Flake 99s are sold every year.
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Crunchie History :
The Crunchie bar was originally launched in 1929. The product is now available in a range of sizes of multipacks, including treatsize and snacksize bars. Positioning :
The fun, feel good chocolate bar. Advertising :
The positioning of the brand has been brought to life by the 'Friday Feeling' idea, which has been used in advertising since the mid 1980s. Did you know? :
The Crunchie bar was originally launched by Fry's - a separate business which later merged with Cadbury.
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Double Decker Double Decker-
A twin layered product with interesting combinations of crispy cereals and nougatine, wrapped in delicious Cadbury chocolate History :
Double Decker has satisfied bigger hunger breaks since 1976. The Double Decker name was inspired by the British obsession with double decker buses in the 1970's Positioning :
The zany hunger-buster! Advertising :
Double Decker has been consistently advertised. The last campaign featured comedian Charlie Chuck with the appropriate endline...."Are you missing something up top?" Did you know? : Double Decker is flavored with a small amount of coffee.
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Picnic Cadbury Picnic –
crispy and chewy caramel covered in whole raisins, peanuts and Cadbury milk chocolate History :
Picnic was launched in 1958 under Fry's name and most recently re-launched in 1999. Positioning :
'On the go' chocolate snack Advertising :
Probably one of the most memorable campaigns for the brand was one which featured a camel called Calvin which was singing a song about the 'chew' of the bar. The 1994 campaign, was a spoof of a washing powder ad and showed lots of the ingredients being poured over a housewife, saying that there were so many ingredients in the bar that it wasn't possible to fit them all into one ad.
Did you know? : The current Australian advertising campaign positions Picnic as 'deliciously ugly!'
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Cadbury Snaps Makes Good Times Even Better NEW Cadbury Snaps are delicious, thin curves of Cadbury milk chocolate with crispy cereal pieces for added crunch. They’re light and moreish and with 40 curves per pack, they’re great for sharing. They have the same delicious Cadbury chocolate taste, combined with a unique cereal crispy texture for lightness and crunch. There are three tempting flavours of Cadbury Snaps to try – Milk Chocolate, Orange and Hazelnut. They are available in shops now. Look out for them in the confectionery aisle. Also keep a look out for our new television advertisement and brand new Coronation Street credits, dedicated to our new kid on the block – both on air from 20th September!
Manufacturing process of above stated range of products. The new Creme Egg plant at Bournville produces 70,000 Creme Eggs per hour and has an overall capacity of 400 million eggs per year. The Bournville factory alone produces 1,800 tonnes of chocolate each week: 1.6 million bars of various kinds. In addition, every day of the week Bournville produces 50 million individual chocolates such as Hazelnut Whirls and Almond Clusters.
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Bars of solid chocolate, with or without added ingredients such as nuts and raisins, are known in the industry as 'moulded' products. Tempered chocolate is poured into bar-shaped moulds, shaken and cooled, and then the unmoulded bars continue to high speed wrapping plants. One of the most recently commissioned plants can produce 598 bars per minute. Cadbury Dairy Milk Chocolate, Britain's favourite moulded chocolate bar, is available in a wide range of bar sizes to suit all ages and all eating occasions: Large bars - 200g, 400g, and 600g, even larger for special occasions, bought for sharing or as a gift Smaller bars - 100g and chunky bars to share or enjoy as a 'big eat' Snack size - for the lunch box Treat size - small individual bars to enjoy as a small treat. •
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In 'countline' products such as Crunchie or Double Decker, the chocolate covers the centre filling. This is achieved by 'enrobing': the centres pass on a continuous belt beneath a curtain of liquid chocolate. Assortments such as the boxed selection Cadbury Milk Tray or the twist wrapped Cadbury Roses are made either by the same 'enrobing' method or 'shelling'. Here the liquid chocolate is deposited into a mould to form a shell into which the centre is deposited and then this is sealed with the 'back'. Another process used is 'panning' where pieces of biscuit, raisins or caramel are coated with chocolate in a revolving drum.
The Cocoa Factory
Cadbury's cocoa factory at Chirk operates 24 hours a day , seven days a week, producing the basic ingredients from which all Cadbury chocolate products are made. 50,000 tonnes of cocoa beans are processed each year,
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using the latest technological control systems to ensure that the end product is of the highest quality. On arrival at the factory , cocoa beans are sorted and cleaned. They are then roasted in revolving drums at a temperature of 135 degrees centigrade: the actual roasting time depends on whether the end use is for cocoa or chocolate. During roasting the shells become brittle , the cocoa beans darken in colour and acquire their characteristic chocolate flavour, which started to develop during fermentation back on the farm. Kibbling and winnowing are the next processes , as roasted beans are broken down into small pieces (kibbling) and the brittle shells are blown away by air currents (winnowing). The resulting pieces are known as 'nibs'. Cocoa nibs are ground in steel pin mills until the friction and heat of the milling reduces them to a thick chocolate-coloured liquid, known as 'mass', which contains 55-58% cocoa butter and solidifies on cooling. This is the basis of all chocolate and cocoa products. Cocoa powder is made by extracting about half the cocoa butter in heavy presses. The amount of cocoa cocoa butter removed removed is specified in the United United
Kingdom food laws and the figure varies in different countries. The solid blocks of compressed cocoa cocoa remaining after extraction extraction is pulverized into a fine powder to produce a high-grade cocoa powder for use as a beverage or in cooking. The extracted cocoa butter is used in the recipes for the wide range of Cadb Cadbur ury y choc chocol olat ate, e, the the mo most st famo famous us bran brand d bein being g Cadb Cadbur ury y Dair Dairy y Milk Milk,, Britain's favourite moulded chocolate bar.
Chocolate Today UK food food laws laws are are qu quit itee spec specif ific ic abou aboutt what what can can and and cann cannot ot be call called ed 'chocolate'. It is any product that is obtained from cocoa nibs, cocoa mass, coco cocoa, a, fatfat-re redu duce ced d coco cocoaa or any any comb combin inat atio ion n of two two or mo more re of thes thesee ingredients, with or without extracted cocoa butter and sucrose.
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Chocolate must contain not less than 35% total dry cocoa solids and not less that 18% cocoa butter. It is the cocoa solids that give the chocolate its rich flavour and the amounts included in the recipe vary with different brands, giving them their own characteristic taste. Milk chocolate may contain a minimum of 14% milk solids or 20% as in Cadbury Dairy Milk. There is another range of products popularly referred to as 'cooking chocolates', many of which in fact should be called 'chocolate-flavoured cake coverings coverings'' because because they do not contain cocoa butter. Vegetable Vegetable fats are used, altering their texture and also their melting properties. Choc Chocol olat atee is a reci recipe pe pr prod oduc uctt and differ different ent tradit tradition ionss and tastes tastes have have developed in different countries of the world. Plain chocolate is the most popular on the continent and their chocolate has a high higher er leve levell of coco cocoaa soli solids ds givi giving ng it a mu much ch stro strong nger er flav flavou our. r. Milk Milk chocolate is the preferred choice in the UK, while the Americans favour dark chocolate with the smoky flavours of South American beans. Another important difference between the recipe traditions of continental and UK chocolates is the kind of milk used. Continental manufacturers use dried milk powder, often mixed with whey powder, while in the UK the very best milk chocolate is made made with fresh milk. milk. It is the special flavours produced when fresh milk , cocoa mass and sugar are cooked together in the first stages of the chocolate making process that give Cadbury Dairy Milk its very special taste. Storage of chocolate at all stages is vital . After production, in the trade and at ho hom me, choc chocol olat atee shou should ld be kept kept in cool cool,, dry cond condit itio ions ns so that that the the consumers can enjoy the best flavour and texture.
Advertisements & Promotions Everyone has their favourite Cadbury product, and everyone has their favourite Cadbury TV ad! Discover stills from our archives and see if you can remem remember ber som somee of those those famous famous tag lines. lines... .. "Every "Everyone one's 's a fruit fruit and nutcase...", "All because the lady loves...", "Only the crumbliest, flakiest...",
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"A finger of fudge...", "How do you eat yours?", "Roses grow on you...", "Thank Crunchie it's Friday!" Cadbury is a national institution, and that's why we sponsor Coronation Street, the nation's favourite soap. See how Aardman Animation recreated 'the Street' in chocolate. Stop: you can also view some of our latest posters , featuring our new packaging and latest product product updates.
Poster Campaigns
Here are three posters you will have seen out and about this summer.
The following is a selection of successful poster campaigns for Cadbury Dairy Milk in 2003...
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1960's TV Advertisement
The title frame from 'Milky Meeting' set in London. This was from a series of comedy-style adverts for Cadbury Dairy Milk. They starred actor Leslie Phillips as the clumsy Mr Dim who had a habit of spilling milk over people.
A well presented and well spoken young lady extolling the virtues of Cadbury Dairy Milk in an early TV advertisement - "You can taste the cream!"
"One of the first in a long line of classic Flake Ads - "Only the crumbliest, flakiest chocolate, tastes like chocolate never tasted before".
1980's TV Advertisement Two shots from a very successful 1980s Cadbury Dairy Milk campaign using spectacular imagery and state of the art special effects.
"And all because the lady loves... Milk Tray" - One of a popular series of adverts inspired by fictional Film and TV heroes such as James Bond and The Saint.
1990's TV Advertisement.
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Produced by Oscar winning animators, this cheeky series of adverts featured the disco song "Float On" and showed how each sign of the zodiac ate their Cadbury's Creme Egg. "How do you do it?"
Cadbury India
Cadbury's Chocolate Eclairs A global harmonisation for one of Cadbury's leading products. Cadbury's Chocolate Eclairs had no consistent image round the world and as part of its consolidation strategy Cadbury's sought a new design. It is redesigned brand brought out its premium quality with a contemporary and expressive style. The new design not only bonds Eclairs closer to the Cadbury name but ties the brand name to the graphic window on the pack, creating an impactful image and reinforcing it as a brand across the world.
Cadbury A subsidiary of Cadbury Schweppes is a dominating player in the Indian chocolate market with strong brands like Dairy Milk, Five Star, Perk, Gems etc. Dairy milk is the largest chocolate brand in India. Chocolates & Confectionery contribute to 75% of Cadbury’s turnover. Cadbury also has a strong brand Bournvita in the malted health drink category, which accounts for 24% of turnover. The parent Cadbury Schweppes during 2001 made an open
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offer for acquiring the 49% non-promoter holding in the company. It has already acquired over 90% of the equity and proposes to buy back the balance equity and delist the stock from Indian bourses.
Chocolate consumption in India is extremely low. Per capita consumption is around 160gms in the urban areas, compared to 810kg in the developed countries. In rural areas, it is even lower. Chocolates in India are consumed as indulgence and not as a snack food. A strong volume growth was witnessed in the early 90's when Cadbury repositioned chocolates from children to adult consumption. The biggest opportunity is likely to stem from increasing the consumer base. Leading players like Cadbury and Nestle have been attempting to do this by value for money offerings, which are affordable to the masses.
Competition: Cadbury has been losing market share, but continues to dominate the chocolate market with about 65% market share. Nestle has emerged as a significant competitor with about 24% market share. Other national players in segment include co-operative owned Amul and Campco, besides a host of unorganized sector players. The sugar confectionery segment is largely dominated by the unorganized players. Leading national players in this category include Nutrine, Parry's, Ravalgaon, Candico, Parle’s, Joyco India and Perfetti. The MNC’s such as Joyco and Perfetti have aggressively expanded their presence in the country in the last few years.
Malted food drinks category consists of white drinks and brown drinks. White drinks account for almost two-thirds of the 90,000 ton market. South and East are large markets for food drinks, accounting for the largest proportion of all India sales. Cadbury’s ( Bournvita) is the leader in the brown drink (cocoa based) segment. In the white drink segment, Smithkline’s Horlicks is the leader. Other significant players are Heinz (Complan), Nestle ( Milo ) and GCMMF ( Nutramul ). Market leader Smithkline also owns other brands such as ( Boost, Maltova and Viva). Cadbury has a 15% market share in the malted food drink segment.
Performance : 22
Cadbury reported sales of Rs6.26bn in 2001. Volumes grew by 5.8% yoy, much lower than the targeted 10% volume growth. Value growth was also marginally lower at 9.7% yoy over the previous year as against 12% target set by the company at the beginning of the year. The sales increase was largely driven by launch of affordable small pack variants for all the leading brands and focused innovative advertising campaigns for flagship brand Dairy Milk .. Operating profit margin improved from 16.6% in F12/00 to 17.5% in F12/01 aided by lower material costs. Net profit rose by 10% yoy to Rs574mn.
Worms found in chocolate packet Syed Firdaus Ashraf in Mumbai | October 03, 2003 21:48 IST
The Food and Drug Administration of Maharashtra has ordered the seizure of all Cadbury Dairy Milk chocolates from the multinational giant's factory at Talegaon near Pune after worms were detected in a chocolate bar.
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FDA Commissioner Uttam Khobragade told rediff.com: "A Cadbury stockist found worms coming out of Dairy Milk chocolates. He informed the manufacturer. But when they did not act on his complaint, he approached me." Khobragade said he had crosschecked the stockist's claim and found it to be true. "I opened a Cadbury Dairy Milk chocolate sealed pack this morning and found a live worm coming out." He said the FDA is in the process of sending notices to the manufacturer. A Cadbury spokesman, however, said the company has not yet received any FDA communication on the issue. "We would like to reiterate that Cadbury India follows stringent quality procedures," he said. "Chocolate is a food product that requires specific care and attention in manufacturing and storage. At all Cadbury plants, every manufacturing process is closely monitored by experienced technical personnel, and a quality assurance team tests finished goods before their dispatch for sale." The spokesman said chocolates are vulnerable to infestation if they are stored near grains and cereals, or in unhygienic conditions. The company, therefore, provides retailers with storage The Food and Drug Administration of Maharashtra has ordered the seizure of all Cadbury Dairy Milk chocolates from the multinational giant's factory at Talegaon near Pune after worms were detected in a chocolate bar. FDA Commissioner Uttam Khobragade told rediff.com: "A Cadbury stockist found worms coming out of Dairy Milk chocolates. He informed the manufacturer. But when they did not act on his complaint, he approached me." Khobragade said he had crosschecked the stockist's claim and found it to be true. "I opened a Cadbury Dairy Milk chocolate sealed pack this morning and found a live worm coming out." He said the FDA is in the process of sending notices to the manufacturer. A Cadbury spokesman, however, said the company has not yet received any FDA communication on the issue. "We would like to reiterate that Cadbury India follows stringent quality procedures," he said. "Chocolate is a food product that requires specific care and attention in manufacturing and storage. At all Cadbury plants, every manufacturing process is closely monitored by experienced technical personnel, and a quality assurance team tests finished goods before their dispatch for sale." 24
The spokesman said chocolates are vulnerable to infestation if they are stored near grains and cereals, or in unhygienic conditions. The company, therefore, provides retailers with storage dispensers and visicoolers to give adequate protection to its products. Additionally, every Cadbury product label mentions the care instruction: 'Store in a cool, hygienic and dry place.' "We believe that by and large retailers follow our operating instructions and adhere to the required storage conditions," he said.dispensers and visicoolers to give adequate protection to its products. Additionally, every Cadbury product label mentions the care instruction: 'Store in a cool, hygienic and dry place.' "We believe that by and large retailers follow our operating instructions and adhere to the required storage conditions," he said.
Indian state seizes Cadbury chocolate stocks after worms BOMBAY, Oct 3 (AFP) –
The government of Maharashtra Friday ordered the seizure from stockists in the western state of all Dairy Milk branded chocolates manufactured by confectionery giant Cadbury India after worms were found in some of its chocolates. "Some stockists complained to us about worms found in the Dairy Milk chocolates in suburban Bombay," said Uttam Khorbargade, chairman of the Food and Drug Administration (FDA) in Maharashtra state. "We carried out our inspections and found that some chocolates did contain worms. Following this, we have ordered seizure of all Dairy Milk chocolates, starting with stocks in Bombay city from Friday."
Cadbury's 2nd plant under lens BS Corporate Bureau in Mumbai
Cadbury India's second plant in Maharashtra is now under the lens of Maharashtra's food and drugs administration. "We are looking at quality control issues in the Thane plant as well. Further, we are seizing only one brand (Dairy Milk) from a wholesaler and that is the reason nothing has been seized from retailers," FDA Commissioner Uttam Khobragade told Business Standard. 25
Cadbury Dairy Milk is mainly manufactured at Cadbury's factories in Talegaon near Pune and Thane, which cater to the entire country. The company's chocolates reach over 650,000 retailers directly and indirectly. The FDA started inspecting Cadbury India's plants after worms were allegedly found in a Cadbury Dairy Milk chocolate bar. The chocolate bar was produced at Cadbury's Talegaon plant. The FDA has also sent the allegedly contaminated pieces for testing at its laboratories. If the FDA finds evidence of infestation or contamination, Cadbury India could face action under the Prevention of Food Adulteration Act. Khobragade declined to say whether Cadbury India executives faced arrest. The revenue and the bottom line of the local arm of British confectionery and beverages giant Cadbury Scheweppes could take a hit if the FDA decides to initiate action against it. Cadbury Dairy Milk, the flagship brand, contributed about 30 per cent to the company's Rs 687.30 crore (Rs 6,873 million) turnover in 2002. Cadbury India is the market leader with brands like Dairy Milk, Five Star, Perk and Gems, with a market share of over 65 per cent. Cadbury Dairy Milk has a 30 per cent share of the packaged chocolate market. In a faxed response to a Business Standard questionnaire, Cadbury India said: "Only a specific lot of Cadbury Dairy Milk chocolates has been set aside as a precautionary measure by the FDA, pending further investigations at some stocking locations. Other than this, manufacture, stocking and sale of Cadbury chocolate brands continue." After the discovery of the infested bar from batch number 28F311, the company checked the factory samples of this batch and found them to be of good quality and free of any traces of infestation, the company said. "In spite of every care being taken at the manufacturing stage, chocolate is a food product that requires specific care and attention in storage. Additionally, every Cadbury product label mentions the care instruction: `Store in a cool, hygienic and dry place'. However, chocolates are susceptible to infestation if they are stored near grain and cereals or in unhygenic conditions," a Cadbury spokesperson said.
26
Mumbai-based distributors of Cadbury said they were aware of the development but had not been contacted by the company or the authorities to freeze stocks.
Cadbury faces prosecution Bureaus in Mumbai |
Laboratory tests by the Maharashtra Food and Drug Administration of samples of Cadbury's products confirmed the presence of two dead and one live organisms. The unspecified product was manufactured by Cadbury's factory near Pune. Cadbury India is now liable to be booked under the provisions of the food adulteration law. Confirming this, FDA Commissioner Uttam Khobargade told Business Standard : "As per FDA norms this is a clear case of adulteration. We will charge the manufacturer. We have not found any instance of this adulteration in the Thane unit of Cadbury India." Khobargade added that while the company had offered the plea that faulty storage by a dealer was responsible for the incident, it was the manufacturer's responsibility to ensure that quality storage conditions were available with the dealers. In a late night media release, Cadbury said: "We are not aware which samples have been tested by the Food and Drugs Administration. Neither have we received any official report from their office. We would therefore not like to comment until we have had a chance to see the formal report. However, we have checked the relevant factory control samples and have found them to be of good quality and free of any traces of infestation." On October 3, acting on a consumer complaint, the Maharashtra FDA seized stocks of Dairy Milk chocolates in Maharashtra. A consumer found worms in a Dairy Milk chocolate bar, bought from a shop in Mumbai's western suburb of Andheri.
27
Cadbury Dairy Milk, the flagship brand, contributed 30 per cent to the company's Rs 687.30 crore (Rs 6.87 billion) turnover in 2002.
More infested Cadbury chocolates found Vijay Singh in Mumbai |
Ten Cadbury chocolate bars were on Monday sent to the Maharashtra Food and Drug Administration laboratory in Dadar, Mumbai, for testing whether they contained worms. The move came three days after the state government expressed satisfaction at the 'hygienic condition' being maintained at the manufacturing unit of Cadbury. FDA sources said the chocolates, from a shop in Kurla, central Mumbai, were handed over to police, who in turn deposited them with the FDA at around 1530 IST. The chocolates were found to have holes in them, they said.On October 10, Minister of State for Food and Drug Administration Anil Deshmukh had said that the judiciary would decide whether to prohibit the sale of the seized stock. Meanwhile, FDA Commissioner Uttam Khobragade alleged that Cadbury officials were trying to put political pressure on him. But "I will not come under any political pressure", he said. Khobragade said, "Instead of admitting their fault, Cadbury are saying that it's dealer's fault. Why are they forgetting that those are their dealer so it's their responsibility to make the product safe?" He also said he would not visit the Cadbury factory. "I have no business to visit their factory. What I want is that the products coming into the market should be perfect."
28
Asked if it was lobbying the government, a Cadbury official told rediff.com: " We reiterate that we will continue to cooperate with the authorities." She said the company was confident that "our products are of the highest standards". Asked why Cadbury had not followed the FDA commissioner's suggestion to withdraw its products from the market and repack them, she said, "As a part of our standard procedure we regularly take back any damaged or date expired stocks back from our retailers." She said the company had not received any intimation about a case being registered against it. "However, we will continue to extend all cooperation to the authorities because like the FDA, Cadbury is also conscious of its commitment to society in general and consumers in particular." Regarding Deshmukh's visit to the Cadbury plant, she said the minister "inspected the hygiene standards and manufacturing practices adhered to" by the company. She admitted the controversy would affect the sales during the festival season. "However, we would like to reiterate that all through the 55 years of leadership in India, Cadbury has remained synonymous with chocolates and we have remained committed to high quality and consumer satisfaction."
Cadbury's loss is Amul's gain Parul Gupta in New Delhi |
As Cadbury India finds itself mired in the worms controversy, Gujarat Cooperative Milk Marketing Federation, which makes Amul chocolates, has witnessed a surge in sales. After selling 60 tonnes of chocolate in September, the company was on course to report sales of 150 tonnes in October and had projected sales of 250 tonnes in November, a GCMMF executive told Business Standard . In Mumbai, which accounts for almost 10 per cent of the 4,000 tonne, Rs 650 crore (Rs 6.50 billion) a year chocolate market in India, the company plans to raise its market share from 2 per cent in the beginning of October to 15 per cent by the end of the month.
29
"We will sell 20 tonnes this month in Mumbai, against only 2 tonnes in October last year," the GCMMF executive said. According to the executive, while 20 per cent of the growth in Amul's sales in recent days has been because of the Cadbury factor, the recent brand launches by the company and the increased focus of GCMMF on chocolates have contributed 40 per cent each to the rise in the numbers. In an attempt to boost sales, the company has launched three new chocolates in Mumbai under the brands Fundoo, Bindaas and Almond Bar.While the first two have been priced at Rs 10 for a 30 gm stick, Almond Bar carries a price tag of Rs 10 for a 35 gm chocolate. As a result, the company's festival season pack "Rejoice" now comes with six chocolates in the city, up from three during the festive season last year. "A national launch of the three brands is likely to happen in a month's time," the official added. Encouraged by the rising numbers, GCMMF has drawn up plans to make its chocolate business a separate division of the company. "We think that the business requires a special focus and this is the best way to do it," the official added.Cadbury India is the largest player in the Indian chocolate market, followed by Nestle India and Amul.
Cadbury announces strategy for ensuring quality MUMBAI OCT. 15.
Cadbury India Ltd. today announced a three-step strategic programme involving the distribution chain and retail channels so as to ensure that the product reaching the consumer is of the highest quality. Laboratory tests by the Maharashtra Food and Drug Administration (FDA) of samples of Cadbury products recently confirmed the presence of one live and two dead organisms. "The three-step programme is a result of our discussions with consumers, our retail partners and the Maharashtra FDA,'' said Bharat Puri, Managing Director, Cadbury India.
30
"We take very seriously our responsibility to give our consumers a product that adheres to high quality standards and will do whatever it takes to ensure this,'' he added. Earlier rejecting the plea of the company that faulty storage by a dealer was responsible for the incident, the Maharashtra FDA Commissioner, Uttam Khobargade, stated that it was the manufacturer's responsibility to ensure that quality storage conditions were available with the dealers. Called `Project Vishwas', the programme entails a partnership with the retail trade on a war-footing to build awareness amongst retailers about storage requirements for Cadbury products, assistance in improving storage conditions at the retail level and strengthening the packaging of the Cadbury Dairy Milk range, a press release issued by the company stated here today. The programme will be implemented immediately in Maharashtra and will be extended nationwide thereafter. Over the next two weeks, a team of hand-picked, trained quality control managers along with over 300 sales people will complete a thorough check of over 50,000 retail outlets all across Maharashtra that stock and sell Cadbury products. The teams will conduct visual checks on storage facilities and Cadburysupplied chocolate dispensers. They will talk to the owners and educate them about the appropriate handling and storage of chocolates.
Cadbury bids to worm way into public good books with Big B endorsement MUMBAI:
The Big B is going to promote the Big C in the chocolate business - Cadbury in India. Indian cine superstar Amitabh Bachchan has signed on to become the brand ambassador of the chocolate major for two years. AB will play a pivotal role in all communication relating to Cadbury's products and brands, be it in print, on television or the great outdoors, the
31
company's managing director Bharat Puri has been quoted as saying in media reports Cadbury India Ltd has announced that mega star Amitabh Bachchan will be the company's new brand ambassador. He will endorse and promote Cadbury chocolates for a period of two years. As brand ambassador, he will play a key role in brand and product communication on television, in print and outdoor media. Cadbury has launched a strengthened, new 'purity sealed' packaging for Cadbury Dairy Milk. The new packaging for 13g (Rs 5) is double wrapped for maximum protection. The chocolate is wrapped in aluminum foil and enclosed in a poly flow pack, which is completely sealed on all sides. In the second phase, the larger Cadbury Dairy Milk packs will come in poly-coated aluminium foil, which will be heat-sealed and then wrapped in the branded outer package. Both these steps are a 'first ever' in chocolate packaging in India.
Amitabh
Bachchan is Cadbury brand ambassador
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Cadbury India Ltd has announced that mega star Amitabh Bachchan will be the company's new brand ambassador. He will endorse and promote Cadbury chocolates for a period of two years. As brand ambassador "Over the last few months, we have had some cases of infestation due to improper storage conditions. As a company committed to ensuring that our consumers enjoy a pristine bar of chocolate each time, we decided to take steps to reduce dependency on storage conditions to the extent possible," said Bharat Puri, managing director, Cadbury India Ltd. "Cadbury will do everything it can to ensure that every bar of chocolate that a consumer buys comes full of goodness and rich taste." Commenting on Amitabh Bachchan as brand ambassador for Cadbury chocolates, Puri said, "There is a perfect fit between Amitabh Bachchan and Cadbury chocolates - their timelessness, and the love and trust they both share with the people across India, makes this an ideal partnership.
Moreover, Mr Bachchan has a universal appeal that extends to everyone from 6 to 60, just as our chocolates do. We believe his endorsement of Cadbury Dairy Milk will go a long way towards our objective of increasing chocolate consumption among all ages of consumers." Amitabh Bachchan said, "Most of you may not know this, but I have been a brand ambassador for Cadbury for the last 55 years. Only, now it is official. Bringing smiles, spreading happiness and joy amongst millions of people in India is what Cadbury and I shall be continuously working towards." The new 13g (Rs 5) Cadbury Dairy Milk packaging is currently available only in Maharashtra and the national rollout will take place over the next three 33
weeks. New packaging for the larger bars of Cadbury Dairy Milk, Fruit & Nut, Crackle, Bournville, Caramello, and Double Deck will be completed in six weeks.
Cadbury Repackages for India Cadbury India has announced that it is to change the packaging for its Dairy Milk chocolate bar following last month’s allegations that a batch had been infested with insects. The consumer scare is believed to have seriously impacted sales of the nation’s leading chocolate bar. As of January 2004, the packaging for Cadbury's Dairy Milk bars will be completely changed, creating what the company says is an impenetrable wrapper.
Although the move is in direct response to the allegations of infestation, the company continues to deny that its production methods at the Indian facilities are of anything but the highest standards and that there is “absolutely” no way that such an infestation could occur. The company has pointed the finger of blame to distributors, saying that unhygienic storage methods were the likely source of the infestations. Cadbury India has even posted a public notice on its website, refuting all allegations of the infestation during manufacture. The statement states that “the manufacture of chocolates involves conching process that takes place at high temperatures (up to 55 C), making it impossible for any infestation to take place during the process. “Our factory-control samples of each batch of Cadbury Dairy Milk produced over the past few months have been checked and found to be free of any infestation”. Media reports were widespread throughout India on the subject, focusing on a Bombay suburban store where consumers are thought to have purchased a series of contaminated chocolate bars. 34
"While our current packaging of Cadbury Dairy Milk has proved us in good stead for the past 30 years, we believe that this change will strengthen protection to the bar through complete sealing," Cadbury India managing director Bharat Puri told the Financial Express.
Cadbury spends Rs 12 crore to overhaul packaging MALANPUR, MP, OCT 28:
Cadbury India has spent about Rs 10-12 crore to overhaul its packaging after the worm controversy led to a 20% drop in its sales in the last quarter of 2003 Sanjay Purohit, director, marketing, Cadbury India, told reporters at the company’s Malanpur plant that there could not have been any problem at the manufacturing end. The packaging overhaul and commercials featuring Amitabh Bachchan helped the company regain the trust of its customers and its market share in chocolates has crossed 70% now, he said. “Mr Bachchan endorsed the food safety measures adopted at our plants and now according to our external retail audit data, we regained our position in September 2004,” Mr Purohit said. Having annual chocolate production of about 30,000 tonne, the company produces five of its major chocolate brands, Gems, Eclairs, Five Star, Perk and Milk Treat, in the Malanpur plant. The company also launched its Celebrations range of rich dry fruit collection for Diwali. The pack will be available in select outlets in select cities. “These are our special offerings to give consumers unique gifting options this festive season,” Mr Purohit said.
Cadbury`s has apologised for an advert comparing a chocolate bar to Kashmir because it`s too good to share.
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The state is disputed by India and Pakistan, and since 1989 more than 60,000 people have been killed as the countries claim the region in its entirety.Cadbury India launched the Temptation chocolate bar with the advert showing a map with Kashmir on it. The Daily Telegraph says the slogan read: "I`m good. I`m tempting. I`m too good to share. What am I? Cadbury`s Temptations or Kashmir?" But following a number of complaints Cadbury India has apologised for the advert. A spokesman said it didn`t intend to "offend the sentiments of the public". Hindu nationalists in the Bharatiya Janata Party, which heads India`s coalition government, had threatened protests. Vinod Tawde, head of the party in Bombay, said: "Kashmir is a very sensitive issue. Thousands of soldiers have sacrificed their lives for it." A Cadbury Schweppes spokesman in London said: "From time to time, local management make mistakes. This was clearly one."
Advertising 2005 compared to 2004 Key Findings: •
Chocolates Advertising on Television registers a growth of nearly 23% in the first half of the year 2005 compared to the same period of year 2004.
36
•
•
•
Chocolates Advertising on Television peaks in the month of February in the first half of Year 2004 as well as 2005.
Chocolates Advertising on Television shows a growth in the third or the fourth quarter across the years (2000-2004). Cadbury's India Ltd. emerges as a leader with nearly 52% of the advertising pie in TV in this category in 2004.
First, let's have a look at the trend of Chocolate advertising in the first half of year 2005 compared to the same of year 2004 on television Here, Chocolate advertising shows a growth of nearly 23% in the first half of year 2005 compared to the year 2004 on television.
Now, let's look at the trend of advertising in the Chocolate category on television in the first half of year 2004 and 2005. Here, Chocolate advertising shows a peak in the month of February on television in the first half of year 2004 as well as 2005.
Advertising in the Chocolate category is expected to be quite seasonal. Let's check out whether that's actually the case.
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The graph shows that Chocolate advertising spends in TV shows a growth in the third or the fourth quarter across the years (2000-2004).
Let's look at the top advertisers - which dominate this category in TV Here, the 6 Cadbury brands shown in the graph comprise 85% of the advertising pie, whereas, rest of the 9 brands advertised by Cadbury comprise 15% of the advertising. Cadbury Dairy Milk Chocolate is the most advertised brand. (with 22%).
Comparison with competing brands Now, have a look on the % share of brands advertised by Nestle India Limited on television.
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The graph shows that Cadbury's India Ltd. tops with 52% share of the advertising pie on television. Nestle India Limited grabs the 2nd position with 34% share, whereas, Parle Products gets the 3rd position with 8% of the advertising share. Other advertisers who could make up to the top 5 are S K Industries and Camp co.
Now, have a look on the % share of brands advertised by
Nestle India Limited on television
Here, the 6 Nestle brands shown in the graph comprise 89% of the advertising pie, whereas, rest of the 4 brands advertised by Nestle comprise 11% of the advertising. Nestle Milk Chocolate is the most advertised brand (with 29%).
Lastly, have a look on the % share of brands advertised by Parle Products on Television .
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Lastly, have a look on the % share of brands advertised by
Parle Products on Television.
Financial Analysis Cadbury India net profit at Rs 190 million Pradeep Rane
Mumbai:
Cadbury India Ltd has posted a net profit of Rs 190 million for the quarter ended 16 June 2002 as compared to Rs 93.60 million for the quarter ended 17 June 2001. The total income has increased from Rs 1,206.80 million for JQ01 to Rs 1,363.40 million for JQ02. The other income for the current quarter is at Rs 127.70 million (corresponding quarter last fiscal: Rs 21.90 million) out of which Rs 107.70 million is on account of the profit on sale of excess immovable property at Thane, Maharashtra. Cadbury had sold the land near its factory at Thane for Rs 11 crore early this year. The company says it has struck an agreement with Kalpataru Properties, Thane, for selling the land, which measured about 27,520 square metres. The deal helped Cadbury unlock the value of its investments and helped it to shore up its bottomline. Recently Cadbury India also refurbished its old office block in Mumbai and is now planning to lease out the extra space available after the renovation, with a view of earning some funds.
40
Cadbury India has three factories, which it operates on its own, while three other facilities are run through arrangements with third parties. To overcome the negative impact of sluggishness in the fast-moving consumer goods market on its performance, the company undertook cost-cutting exercises over the past one year, say analysts. “As a future strategy, it plans to reduce manufacturing and supply-chain costs.” During the past few months, Cadbury India had offered a voluntary retirement scheme to 29 employees in order to bring down costs. Cadbury Schweppes recently hiked its stake in the Indian company to 90 per cent by buying out around 39 per cent of the public shareholding. Cadbury India has already made an application for delisting.
Cadbury India Cadbury India registered an 88.41 per cent rise in net profit of Rs 9.27 crore in the first quarter ended March 1999
April 26, 1999, New Delhi: Net sales improved by 16.54 per cent to RS 116.05 crore. Operating profit margin improved to 15.77 per cent from 12.38 per cent. Analysts attribute this to price rationalization undertaken by the company in first quarter. In the first quarter, Cadbury had hiked the prices in its popular brands such as Dairy Milk, Bournvita, Perk and Crackle. However, the company spread new launches such as Cadbury Gold, Picnic and confectioneries. It has also not picked the price of 5 Star.
The price of Bournvita (1 kg) where kicked RS 5 to 170. According to analysts, Cadburys' dual strategy of getting into mass market with confectionery and push products in the high value segment has ensured both growths in volumes and margins. Recently, the company rel-launched its flagship brand Bournvita to take on the increasing competition, SmithKline
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Beechem's Horlicks and Boost and Nestles' Milo. Chocolates, malted foods and Cocoa Powder Contribute more than 55% to the companies' total turnover.
Bournvita contributes 22% to its total sales while its sugar division (including Eclairs) contributes about 23%. The company is also increasing its distribution outlets from 4 lacs to 5 lacs in the next two years. During the first quarter, interest costs were down 20.78% to Rs 1.22 crore. This helped the company to improve its gross profit margin to 15.35% from 11.41%. At the current price of RS 768, investors can continue to hold.
Cadbury India Ltd Period ended
12/98
No. of months
12
Gross Sales Excise Duty Net sales Other income
12/99
12/00
12 4,283.3
12/01
12 5,110.8
12 5,711.4
6,263.2
(26.8)
(12.8)
(60.9)
(18.9)
4,256.4
5,097.9
5,650.5
6,244.3
26.0
79.3
119.6
90.3
Total income
4,282.4
5,177.3
5,770.1
6,334.7
Raw materials
1,307.3
1,631.5
1,603.5
1,589.3
Stock adjustment (Inc)/ Dec
48.3
(33.8)
(76.1)
(24.9)
Conveyance,travelling and living expenses
52.2
66.4
73.3
82.4
Cost of material
1,407.8
1,664.1
1,600.7
1,646.9
Employee cost
431.0
470.1
538.9
597.6
Power & fuel
148.2
152.5
167.4
147.6
Advertising/ promotion/ public
473.0
694.0
814.8
981.4
Freight & forwarding
237.4
240.0
290.6
301.2
Other expenses
943.9
1,102.1
1,288.6
1,475.9
3,641.5
4,322.9
4,701.0
5,150.6
641.0
854.3
1,069.1
1,184.0
62.8
37.7
31.1
20.6
Cost of sales PBIDT Interest & finance charges PBDT
578.2
816.6
1,038.0
1,163.4
Depreciation
193.4
199.5
218.5
237.9
PBT
384.8
617.1
819.6
925.5
Provision for taxation
120.6
204.8
296.5
328.3 (23.2)
Extraordinary items/ Prior year adj.
(2.0)
(45.4)
(2.7)
Adjusted PAT
262.1
367.0
520.3
574.0
Dividend payout
144.0
170.2
196.4
235.7
Forex inflow
73.0
87.6
66.8
75.9
318.6
413.6
420.0
361.8
Book value of quoted investments
4.3
22.0
4.3
3.2
Market value of quoted investments
4.5
22.9
4.4
2.5
Forex outflow
Investment in affiliate/ subsidiary
0.2
0.2
0.2
0.2
251.0
254.8
274.5
322.9
Gross sales
100.6
100.3
101.1
100.3
Excise duty
(0.6)
(0.3)
(1.1)
(0.3)
Contingent liabilities RATIOS As % of net sales
42
Net sales
100.0
100.0
100.0
Other income
0.6
1.6
2.1
100.0 1.4
Total income
100.6
101.6
102.1
101.4
Cost of material
31.8
31.3
27.0
25.1
Employee costs
10.1
9.2
9.5
9.6
Selling expense
16.7
18.3
19.6
20.5
Other expenses
22.2
21.6
22.8
23.6
Cost of sales
85.6
84.8
83.2
82.5
14.4
15.2
16.8
17.5
Profitability ratios (%) PBIDT excl. other income PBIDT
15.1
16.8
18.9
19.0
PBDT
13.6
16.0
18.4
18.6
Profit before tax
9.0
12.1
14.5
14.8
Profit after tax
6.2
7.2
9.2
9.2
21.0
19.8
10.8
10.5
Growth ratios (% yoy) Net sales PBIDT
30.3
33.3
25.1
10.7
PBT
43.7
60.4
32.8
12.9
PAT
41.2
40.0
41.8
10.3
Tax (% of PBT)
31.3
33.2
36.2
35.5
Dividend (% of PAT)
54.9
46.4
37.8
41.1
Payout ratios (%)
Brief Financials (in Rs. Mn.) Period ending (months) Net sales Other Income Total Income Cost of goods sold OPBDIT PAT Gross Block Equity capital EPS (Rs.) DPS (Rs.) BV (Rs.) P/E range (x) Debt / Equity (x) Operating margin (% of OI) Net margin (% of OI)
Detailed Quarterly
28-Dec-2003 31-Dec-2001 29-Dec-2002 (12) (12) (12) 7298.11 6846.58 6258.34 93.32 11.45 13.98 7391.43 6858.03 6272.32 6293.08 5683.02 5163.55 1098.34 1175.01 1108.77 456.50 727.21 595.40 3267.69 2860.47 2690.13 357.10 357.10 357.10 12.78 20.36 16.67 2.00 2.00 6.00 99.78 89.71 70.73 0.0 - 0.0 0.0 - 0.0 0.0 - 0.0 0.03 0.04 0.03 14.9
17.1
17.7
6.2
10.6
9.5
43
Finance Officer (Factory Accounting) (Across India) Responsibilities: •
•
•
•
•
•
•
•
•
•
•
Timely completion of accounting for the factory Checking and booking of vendor bills and timely and accurate verification of conversion bills Monitoring advance payments and subsequent recoveries. Preparing forecasts for next period and full year Preparation of budgets in consultation with the location manager Prepare Factory VBC/VBP information/data. Complying all TDS, Service Tax, Works Contract, Excise laws, incl proper deduction of TDS. Control of inventories- physical verification & optimisation. Ensure proper utilisation of Excise Modvat credit with minimum utilisation of funds from PLA. Maintain proper sales tax documents and submit necessary information to Sales tax department Coordinate and ensure adherence and completion of all export procedure documentation
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•
•
Prepare and scrutinise Bank reconciliation statement of the local bank account & cash handling. Doing physical verification of Assets as per Schedule given by HO Assets Actg & Control. Requirements:
•
•
•
ICWA (Inter) with aminimum of 2 years work experience or a CA. Should have been exposed to factory accounting processes and controls Good working knowledge of MS Office and SAP
Organizational structure of Cadbury co Hierarchical structure is based on distinct chain of commands from Managing director to Clerical Support assistants (according to Cadbury). Decisions are made at the top and pass down. Such organisational are usually based on clearly defined procedures and roles.
•
•
Cadbury organisation is based on more democratic . Decisions are made as a result of a consultation process involving various members of the organisation (Cadbury). Ideas would be discussed and thought through collectively. Within Cadbury organisation we can find a Democratic structure, Because Cadbury tends to be found in situation were it is felt to be important for all members of the organisation to understand what they are doing, were decisions require individual initiative, and where member of staff need to work as a team .
45
How management style, Culture and Organisational structure interrelate •
•
•
Management style, culture and organisational structure interrelate together in Cadbury because they all work together to help the business to achieve its objectives; in order to lead a successful business. Cadbury has strategies for the organisation, continually to motivate members of staff to support this process, and market change within the organisation. Management style, culture and organisational structure interrelate together in Cadbury because they all work together to:
Quality •
Quality refers to features of a product that allow it to meet customers expectations. A product is often refereed to as a good quality if it is "fit for purpose".
•
To ensure good quality, Cadbury requires:
•
Quality raw materials
•
Quality production process
•
Quality design
Through these stages Cadbury adds value. •
•
•
Cadbury uses many processes to achieve quality. It uses quality assurance, control and total quality management to make sure that its quality standards are met. All of these quality processes tie in together. Quality assurance places great emphasis upon the seller to deliver goods of appropriate quality, so that the receiving organisation is saved the time and trouble resulting from defects. Quality control is inspecting or testing the quality of the product at various points in the manufacture of a product or delivery of service.
Total quality management
46
•
•
•
•
is a method of establishing production faults through a philosophy of continuos improvements in every process of planing, production and service. In order for Cadbury to achieve quality assurance, it must achieve: T Product perfection, It does this by taking samples from various batches of chocolate and analyses them, to find out if they meet quality standards. If they do not, the whole batch is brought back and not sold, it is further on analysed, in order to find the fault. T Process quality, it does these by regularly checking that all the production.
Case Study (Fuse) Introduction
Established markets generate intense competition during which new and innovative marketing strategies are required and new and existing products are developed. As a market develops, consumers become more experienced and discerning and look for more benefits from the products they choose. Although some organisations' products may appear unchanged at this developed stage of a market, the more successful businesses re-work existing brands and continue to develop new ones to meet changing consumer needs. The development of strong brands has always been a feature of the confectionery market .
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Evaluate the marketing strategy of Cadbury's Fuse Bar making recommendations on how they may be developed. Based price- this is a price that is nearly the same as the competition as charged Loss leader - price is below the true cost of the product to encourage consumers to buy other products also Penetration or destruction price - this is a low price to encourage loyally and gain market share later the price is raised Cost plus price - cost of product plus a mark up of profit
Psychological price this is when a price is set at e.g. £6.99 rather than £7.00 so it encourages people to think it is cheaper. The pricing strategy
the Fuse went for and all their competition was the market oriented strategy so they set the R.R.P. at 33p they did this because if it had made it too high then no one would buy it because they could get a other chocolate bar for less. They couldn't set it too low because Cadbury is a oligopoly this means there are only a few dominated business in the market so if they made it too low for example 20p they would be less than the rest but then the other companies would have to lower the prices of their chocolate bars so overall the prices of chocolate would fall so the profits of all the companies would go down. So 33p is a good price to set a chocolate bar at because it is low but not too low so Cadbury still get a fair bit of profit.
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The price will never really change throughout its life unless it is in a special place where there isn't much option in where you go to buy your chocolate bars e.g. cinema Different people are more sensitive to price (see graph at bottom) some will go buy some thing not trying to look for the best deal and some always look for the best deal. This only applies to Fuse a tiny bit because people don't look for the best buy on a chocolate bar because it is an impulse buy. An impulse buy is when you don't set out that you are going to buy a product it's when you walk in a shop and buy something quickly without much thought before the purchase. This means that large amounts of the Fuse will be needed to be sold for the company to break even. The firms will then in turn use flow production and benefit from economies of scale. This will help them by saving money and time because they will be buying and making in bulk. From my finding I have seen that Fuse has under charged people for their chocolate bar. Fuse could have increased the price ands still got the same amount of sales because not many people care how much their chocolate bar is seeing that it is a impulse purchase. So I would suggest increasing the price by 3p making more profit which is needed because Fuse has to sell a lot to breakeven, even though Cadbury have very good economies of scale.
Place This is where the product is sold, how it gets to the consumer and how it gets to that place of purchase. There are 4 types of places where you buy products: Retailer this is a business who sells to a consumer A wholesaler this is a firm that buys from a factory in bulk and breaks this down to sell to retailers. A wholesaler breaks bulk. Agent this is somebody that puts buyers and sellers together. Producer this makes the product in the Fuses case this is Cadbury. Also there is vending machines which Cadbury use quite a lot
The channels of distribution Using these paths Cadbury can sell their Fuse bars to the consumers There are many types of retailers Cadbury could use :
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· Independent (newsagents etc.) -sole traders mainly · Supermarkets · Specialist multiples · Variety chain stores · Franchised chain · Mail order and internet Chocolate bars is sold in most of these places it is normally located in the area near the checkout because it is an impulse purchase so they put them here to make people grab one while buying another product. So big boxes with a promotion linked near the check out like a cheap price so people see them a grab them while getting another product. Place does not only concern the shop people buy it from. Also the place of which the chocolate bars are kept is very useful to have right. Most people are going to look around eye level which is about 4 to 6 ft from the ground so this would be a very good place to place the Fuse on the shelves. This works very well as Fuse is a impulse buy so consumers are only going to quickly look at the selection and only really look at a comfortable level without stretching up or down wards to look for Fuse.
My overall view of the place Fuse sold there bars is not really that important in that if they try to sell it every where then its definitely going to sell where its meant to and not meant to sell where it doesn't. but I would make sure if I were Cadbury to sell it in all leading supermarkets and big chain stores such as mace and aim many promotions at them using big boxes of them to put near the checkout to attract an impulse buy of them. If not then at least try to put them at eye level of the consumers so they get noticed. Promotion Companies like Cadbury promote mainly either persuade consumers to buy the products or explain what the product is and does or both. In the Fuses case its to create awareness and persuasion
PACKAGING Proper packing not only helps to protect and preserve the product in transit, but also helps to sell the product in the market. The terms packaging and 50
packing are used interchangeably. However, there is a difference between the two terms. Packing refers to protective covering used for transportation of goods, whereas, packaging refers to the containers in which products reach the ultimate consumer. The type of packing differs from product to product, depending upon its physical properties, the distance of transportation, specifications of the importer, etc. In India, overseas packaging is given due consideration and certain guidelines/standards have been laid down in case of certain products by Export Inspection Council (EIC) and Bureau of Indian Standards (BIS). The Indian Institute of Packaging (IIP), located at Bombay, guides and assists the exporters in developing a good packaging system.
PACKAGING CONSIDERATIONS 1). Containers – big containers are used shipping bulk items. The containers are going to play a big role in the world trade in future. 2).The weight of each package should not be very high as it may attract more dock handling and freight charges. 3). A proper packing list must be prepared, since packing list is one of the important shipping document, required by customs, importer and other concerned authorities.
FACTORS TO BE CONSIDERED FOR PACKAGE DESIGNING 1. Language: The label used on the packages or the matter inscribed on
the packages must be printed in appropriate language. In most countries, English language and the prominent local language may be used. 2. Colour: The colour also plays a significant role. People in different
countries and places attach different meaning to colour. For instance, green colour may be favourite in Gulf countries. 3. Size: Package size should be determined only on finding out the buying
characteristics of the consumers. In certain countries buyers shop regularly. In such instances, the package size should be smaller. However, in such countries where buyers shop occasionally, the size 51
can be larger. Again, the size should be such that it does not create problem to the dealers to store or stack the products on their shelves. 4. Length of Distribution Channel : The longer the chain of distribution,
the stronger packaging is required. 5. Climate: A country with a humid climate will need a different
packaging, as compared to those countries with cold climate. 6. Accepted Norms: In certain countries, buyers may prefer to use certain
products in a standard packaging form. Such standard norms must be studied before designing a package for overseas markets. 7. Method of Transport Used : Air transport may require a different type
of packaging as compared to sea transport. This is because of time taken for journey, weather conditions, etc. 8. Regulations in the Importing Country : There are certain regulations
imposed by the importing country. Such regulations must be observed in designing packages. 9. Trends in Packing: The exporter has to consider the trends in
packaging, i.e., package should reflect improvement in packaging technology, consumer’s life styles and preferences. 10. Cost – Benefit Analysis: Packaging costs money, therefore, the
exporter has to be selective. A particular package may provide maximum protection and attraction, but it may be very expensive. Another package may provide less protection but less expensive. The exporter has to decide which would be his best option. Of course, he has to keep in mind the nature of buyers, nature of the product, and other factors in designing the package.
FUNCTIONS/IMPORTANCE OF PACKAGING Proper packaging not only helps to protect and preserve the product, but also it serves a number of other purposes.
Protection : Packaging helps to protect the product from damage during transit or during its use. While packing the product the exporter need to
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consider the mode of transport, the channels, the amount of handling, and so on. Promotion: Packaging gives advertising value to the product. Attractive packages attract the attention of the shoppers and they buy such attractively designed products. Convenience to Consumers : Packaging offers convenience to the customers in handling and using the product.
LABELLING AND MARKING The label is the printed material that appears on the package. A products label can be strong selling stool. The label’s illustration and copy should indicate clearly the contents of the product, and the directions for use. The label contains the brand name and as such it assists in identifying the brand. The label should indicate the following information: • • • • • • •
Type of the product. Producers or processor’s Name and Location. Net quantity. Production Batch Number and Date. Price, wherever necessary. Directions for use, if required. Other relevant information, if any.
Types of Labels There are three types of Labels – a) Brand Labels, b) Grade Labels, c) Informative Labels.
1. Brand Labels: When only the brand name, appears on the product package or item, it is a brand label. This is mostly used in case of Clothing, stickers on fruits, such other products.
2. Grade Labels: At times, the product package or item may have a grade indication by a letter, number, or word. Grade labels indicate the quality or standard of that product.
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3. Informative Labels: These labels give information in respect of the products ingredients, use, care, performance, precautions, price, and such other details.
MARKING Marking of goods involves writing of details on the pack such as: • • • • • •
Name of the Exporter, Country of Origin, Receiver’s (importer’s) Mark/Name, Port of Loading and Destination, Handling Instructions, Weight of the product, and so on.
ROLE OF ADVERTISING TO PROMOTE EXPORTS Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor. The advertising messages are communicated through mass media such as newspapers, magazines, satellite TV channels, internet, direct mail, and so on.
The role of advertising to promote exports can be briefly explained as follows: 1. Product Awareness: It makes the potential customers aware of the
product. It brings to the knowledge of the potential customers regarding the availability of new and better goods and services. It is not enough to create awareness, but it is more important to create top of mind (TOM) awareness, so that the customers whenever think of buying a product, the brand name of exporter should be at the top of the mind of the customers. 2. Persuasion: The overseas buyer needs not only information about the
new goods and services, but he needs to be persuaded to buy the exporter's products and services .This is because ; the buyer is confronted with many competitive messages of competing brands. Therefore, the role of advertising is not only to inform but also to persuade the prospect to buy goods and services offered by the exporter.
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3. Reputation : Effective advertising can bring in good name to the
exporter’s brands and also to the firm. People from different countries become familiar with the name and brands of the exporter through advertising. 4. Information to Intermediaries: Advertising is also undertaken to
inform the intermediaries regarding the product. The intermediaries need to be convinced to stock the products and push them in the market to the buyers. Necessary advertising efforts can be directed at the channel intermediaries. 5. Developing Brand Image: Proper advertising communication helps to
develop good brand image in the overseas market. Brand image refers to perception of the brand in the mind of customers. As far as possible, the exporter must develop a positive image of the brand through effective advertising, which would result in higher sales. 6. Developing Brand Loyalty: Exporters need to advertise so that the
loyal customers do not switch over to competing brands. The exporter needs to remind the customers about the availability of the brand. The advertiser has to inform the consumers about the modifications if any, through advertising.
7. Education: Advertising brings to the knowledge of the present and
potential customers about the various features of the product, such as quality, uses, advantages, price and such other aspects. This helps the buyers to make a proper choice of the brands. 8. Expansion of Markets: Effective advertising is required to stimulate
more and more demand from the buyers. The exporter can also enter into new market areas or countries through effective advertising. 9. Overcoming Negative Attitudes: Foreign buyers do have a negative
attitude towards Indian goods. They are of the opinion that Indian goods are inferior in quality or not up to the international standards. Therefore, effective advertising is required to overcome such negative attitudes on the part of foreign buyers.
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10.
Inducing Product Trials: Effective communication is needed to induce foreign buyers to try exporter’s products. The main objective of advertising should be to create a desire for the advertised products. The exporter may use effective sales promotion tools such as free gifts, premium offers, etc., to induce the foreign buyers to go for trial purchases. The advertising along with sales promotion can induce the overseas for trial purchases.
STEPS IN INTERNATIONAL ADVERTISING PROGRAMME The main steps in developing an effective advertising programme are as follows: 1. Identifying Target Audience: The first step in designing advertising is
to find out the target audience. The target audience depends upon the type of the product. The target audience influences the exporter’s decision on what to say, to whom, when, and how to say it. 2. Deciding Advertising Objectives: The next step is to list out
advertising objectives. The main advertising objectives are As follows: • • • • • • •
To create product awareness. To face competition. To persuade buyers. To reinforce attitudes. To develop brand image. To develop brand loyalty. To expand markets, etc.
of Advertising Campaign Plan: The exporter or his advertising agency must prepare an advertising plan. The plan should include : The objectives of the campaign. • • The media to be used. • The market area to be covered. The target audience to be reached. • The products to be advertised. •
3. Preparation
Designing the Message: The next step is to design the advertising message.
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Question & Answer zone •
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Why does the taste of the same product often differ from country to country? Why does the taste of the same product often differ from brand to brand? What is the purpose of the Cadbury website? Does Cadbury make low fat or diabetic chocolate bars? Do we sponsor other sites or take advertising on other sites? Where do product names come from?
Q.1). Why does the taste of the same product often differ from country to country?
The composition of export lines is always as near as possible to that of the UK product. However, we have to comply with the food laws in the country in which the product is being sold. This does affect the end result where food laws differ significantly from the UK. Q.2). Why does the taste of the same product often differ from brand to brand?
The way chocolate is stored can affect the taste. For instance chocolate stored in a warm environment will become stale more quickly than chocolate stored in a refrigerator. Although the recipe and ingredients for our chocolates are always controlled to tight recipe standards, on occasions ingredients are sourced from different areas, and milk particularly can taste differently when bought from different areas of the country. Chocolate recipes and textures are different. For instance a bar of Cadbury Dairy Milk tastes quite different to a Flake or a Wispa because they have different recipes. Q.3). What is the purpose of the Cadbury website?
The Cadbury website provides a variety of information about the world of chocolate and Cadbury's vital role in that ever popular market. It has attracted millions of visitors since its launch in March 1996.
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Although the Cadbury site is a popular stop for Internet surfers, it was not designed as a promotional tool for its brands but rather as an educational and informative source for interested surfers from educational establishments to chocolate-loving members of the public. Q.4). Does Cadbury make low fat or diabetic chocolate bars? DIABETIC CHOCOLATE
Unfortunately we do not manufacture chocolates suitable for Diabetics under the Cadbury label. Trebor Bassett confectionery however, which is an associate company of Cadbury Ltd sells Diabetic chocolate under the Ernest Jackson "Special Recipe" label. There are a variety of flavours and products within the range, and these bars are generally available in larger chemists throughout the country. Chemists are also able to order these bars from their suppliers given a little notice. LOW FAT CHOCOLATE
We don't specialise currently in the manufacture of low fat bars.You may be interested to learn however that our Fry's Turkish Delight bars are 92% fat free! We also produce a range of treatsize and snack size bars which are smaller than our standard bars. Although we have no immediate plans to launch a low fat bar there is always a possibility that we may do so in the future. Q.5). Do we sponsor other sites or take advertising on other sites? In general it is not our policy to sponsor other sites or take advertising space. Q.6.) Where do product names come from? MILK TRAY
The name "Tray" came from the special pack in which the milk chocolate assortment was delivered to the shops. Originally Milk Tray was packed in 5.5lb boxes and arranged on trays from which it was sold loose to customers. DOUBLE DECKER
The Double Decker name was inspired by the British obsession with double decker buses in the 1970's 58
FLAKE 99
The real reason for "99" Flake being so called has been lost in the mists of time, but this is an extract from an article which appeared in a Cadbury works paper many years ago. At a recent Sales conference Mr Berry, a sales manager, told a story of how Flake became associated with ice cream and how "99" Flake came by its name. "When I first came north in 1928 I found that some of the Italian soft ice cream makers in County Durham were trying ways of introducing other lines to increase their sales, which in those days were largely in the form of sandwich wafers. The possibilities were obvious if we could get a suitable line, both in shape and size and texture - and the most promising was Flake, which at that time only sold as a 2d line, and therefore had to be cut with a knife to reduce its size."It proved very successful and its popularity quickly spread. After successive introductions of half penny and 1d Flake, both of which were sold with ice cream, the Sales Committee finally agreed to produce a special size to fit the sandwich and Mr Berry visited a number of Italian customers in the area. After this of course the cornet with the Flake placed temptingly in the top of the ice cream became very popular. In the days of the monarchy in Italy the King has a specially chosen guard consisting of 99 men, and subsequently anything really special or first class was known as "99" - and that his how "99" Flake came by its name. Q.7). Can I submit an idea for a new product?
Here at Cadbury we have a Research and Development Team who, in partnership with the Marketing Department continually investigate new product ideas. Development of a new chocolate product requires tremendous investment, both in time and financial resources. For every new product that reaches the market place, fifty or more will have failed to meet expectations somewhere during development. New products have to be carefully researched to ensure they have mass appeal, and the decision to introduce a new Cadbury chocolate product is always based on the results of extensive market research.
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