History of Cadbury and Problems Faced by It - Essay Example

Following the partnership in 1854, Cadbury Brothers received a Royal Warrant of manufacturers of chocolate and cocoa to Queen Victoria.

 Before the 1850s chocolate was a luxury food item, enjoyed only by the elite society of Birmingham but in the 1850s due to a decline in import taxes, the prices were reduced and everybody could afford chocolate. In 1861, John’s partnership with his brother Benjamin was dissolved by mutual agreement and Cadbury was handed over to John’s sons George and Richard Cadbury because of the poor health of their father.

Richard took over the marketing and sales side of Cadbury, George managed the manufacturing of Cadbury chocolate and in 1866, they launched “Cocoa Essence” (all natural products without any starchy ingredient) as George acquired a revolutionary cocoa press. George and Richard decided in 1878 to expand their business and for that reason, they acquired the Bournbrook Estate, situated in the south outskirts of Birmingham. This estate was named Bournville and later they opened the Bournville factory. In 1905, Cadbury launched its first milk chocolate with higher milk content than other chocolates, and became the best-selling product in the year 1913. In 1918, Cadbury’s trade increased and it spread globally when Cadbury launched its first factory in Hobart Tasmania (BBC, 1).

Cadbury mergers and acquisition by Kraft food

In 1919, Cadbury was merged with JS Fry & Sons to compete against Rowntree (a brand owned by Nestle). On 22 September 1955, Cadbury advertised itself on TV for the first time. In 1969, Cadbury was again merged with beverages company Schweppes and formed Cadbury Schweppes. Cadbury Schweppes then acquired other companies but in the US, the manufacturing of Cadbury’s confectionary products was licensed to The Hershey Company. In 2009, Kraft Foods made a bid of $ 16.2 billion to take over Cadbury but according to Cadbury, the bid was undervalued. Later in 2010, there was a protest by the British public, unions, and other groups against the takeover by Kraft Foods, as they feared the loss of 4500 UK jobs (Beaudin, 1). Finally, after various disapprovals and protests, in June 2010 following the Polish division, Cadbury was taken over by Kraft Foods, and Cadbury –Wedel was sold to Lotte of Korea.

Problems faced by Cadbury

One problem that Cadbury faced during 2005 was the implementation of IT in various firms globally that helped the firms to cut on its cost of manufacturing and selling. Cadbury following the IT breakthrough, decided to create SAP’s ERP system that would integrate the planning, sales, finance, manufacturing, production, purchasing, and distribution but it resulted in implementation problems leading to the sale of the Schweppes drinks. In June 2006, Cadbury was accused of spreading food poison among 40 people in the UK. Cadbury admitted that its chocolate bars had been contaminated by salmonella over the past 6 months but it alerted The Foods Standard Agency after half a million of the bars were on sale. Cadbury said that the level of bacteria was low and was considered safe but FSA wanted Cadbury to pull its products off from the market. The product recall did not affect the company and it had a fresh stock available to the market because it produces billions of chocolate bars annually (Vasagar, 2006).