How will Cadburys branding be affected by a Kraft take over?

The battle of for the acquisition of Cadbury continues this week into the run up for the last bid from Kraft. Kraft’s hostile bid was rejected and they had until January the 19th to come up with a better offer. Kraft’s offer values Cadbury at 740p per share where as British investors say the company is more likely to be 850p. However on Krafts side Warren Buffett, their largest investor, has warned the companies CEO not to overpay for Cadbury.

In this time Cadbury has to find a way to avoid being taken over by the U.S Company. The chairman, Roger Carr, can use the companies decreasing share price to repeat his stance that Kraft is a low-growth company and not offering what Cadbury is worth. Todd Stitzer, Cadbury’s chief executive, said they would rather to be acquired by Hershey or Ferrero, than to Kraft, because of their cultural similarities. It seems the mergering of these two companies will see what Kraft has to offer on the 19th before showing their hand.

Many British people have raised their concern that Cadburys will be sold to an American confectioner. Lord Mandleson was concerned that selling Cadburys to Kraft was to make “a fast buck”. He stated “firms or investors should expect to brave the court of public opinion if they are motivated only by short-term profit." And so they did when the Mail on Sunday put together a campaign to keep Cadburys British. Roger Carr, again, showed his similar opinions when he personally thanked MoS readers for their appreciation of “our great British heritage, our products and the values that remain at the heart of our business”. It seems the bid will have nothing to do with share prices on the 19th as even Carr has said he wished for Kraft not to ‘steal’ the company from their shareholders and describes them as under ‘siege’. This campaign seemed to work for advertising on the run-up to Christmas as demand for tins of Roses and Heros soar to record levels. It seems the British public are in great fear of loosing their loved chocolate to an Amercian giant.

Ruth Sunderland of The Observer, believes that “it is important for UK jobs and manufacturing for Cadbury to stay British. Lord Mandelson, the business secretary, has recognised this and indicated he may ask Kraft for detailed answers on jobs, pensions and research capacity. But even investors who dismiss such considerations as irrelevant patriotism must recognise the risks of selling out to Kraft” (Sunday 10 January 2010)

The emotion and love behind Cadbury started with Quakers George and Richard Cadbury when they created a utopia in Bournville for all of its workers. The ethos of Cadbury is to help the while communities and is grounded in Quaker beliefs. Lord Mandelson has said he would not stand by any bid that would not support its heritage. I truly believe that Kraft should be warned of the power of the British people when they feel anger towards a company. The recent take-down of the X-factor number one Christmas song could be repeated for Christmas number on chocolates.

When I have spoke to Family and friends they are worried about two things; jobs in the U.K and the taste of the chocolate. Cadbury has eight factories and 3,000 staff in the UK. It would be harmful to our economy to close these factories and loose precious business in a time of recession. The taste may seem less important in relation to the previous problem, but everyone is afraid that the chocolate will be flavored to suit a more American palette. Cadbury’s Whole nut is available in the U.S sold under Hershey’s however U.K people report of its bitter American taste compared to the creamy delight of U.K chocolate.

What will happen to Cadbury’s branding in the case of an American takeover? British people love Cadburys because it is so British. The adverts are time-keeping and nostalgic to many. Cadbury’s brand is so strong that any product is instantly recognizable as their brand. This cannot be said for Kraft’s products. Terry’s chocolate orange, Toberlone and Oreo are all under the Kraft range and although their brands are strong they are not consistent under the same mother identity.

There is great fear that an American company just won’t get our British heritage. Any potential American CEO should be revising their British knowledge now in preparation for their role if they are going to see any success at all. Mark Artus, CEO of 1HQ, a British branding consultancy, said “Cadbury's values are firmly rooted into the fabric of all that is British and the original Victorian philanthropist approach to giving people jobs."

In the case of an American Take-over I would hate to see Cadbury’s advertising be at all effected. Their classical adverts are British through-and-through and that’s why people love them so much. Decades of adverts create nostalgia and are reminiscent to so many. The Milk Tray men and Cadbury flake women played such a large part in the companies branding that even Cadburys chairman Richard Carr said: 'Our thanks also go to the Cadbury's Flake girls and the Milk Tray men who all contributed to making our products so popular.'

The Milk tray man adverts was one of the most iconic and longest running advertising campaigns in British history. It ran from 1968 to 2003 and featured attractive men modeled on James Bond. They had to complete Action man style moves to get the Milk tray box to their loved ones.

http://www.youtube.com/watch?v=BM4DMe25CvQ



Another well-known advert was the Cadbury’s Caramel Bunny. The animated cartoon vixen told audiences to ‘take it easy’ while being admired for her beauty. The bunny returned in 2003 with the catch phrase “still got it”. She has even been voted the third sexist cartoon character of all time. However, she wasn’t as sexy as the Flake woman who stirred up quite a fuss in the 1970’s for being a bit too raunchy. The adverts showed women enjoying a flake, people complained saying she was enjoying it too much and in a far too suggestive manner. The lyrics were "Only the crumbliest, flakiest chocolate, tastes like chocolate never tasted before."

http://www.youtube.com/watch?v=fpFl_kK0Y88





The Cadburys adverts have taken us right into the 2000’s with their hit adverts for the glass and half full productions. The Crazy eyebrows and gorilla playing drums adverts are strange ways to advertise chocolate and ways in which American CEO’s may not have approved or understood. It would be a shame to loose such a truly British gem in the advertising field to a giant such as Kraft. They were so classical that it was the talk to Britain. An amazing advert that despite its weirdness captivated our country.

http://www.youtube.com/watch?v=JWEOHd9JNmk


Richard Wachman, The Observer, Sunday 10 January 2010
Jonathon Petre, 09th January 2010
Katie Dawson, BBC News, Bournville