Chocolate Wars Read online

  For Sir Adrian Cadbury, whose life spans the period from family Quaker leadership to the Kraft takeover, there is another key issue. “The danger of Kraft taking over is that it is very easy for a larger firm effectively to destroy the spirit of the firm they take over.” The indefinable qualities that make up the character and identity of a company, he argues, are built up over many years, and depend on history, reputation, international brands, and the quality of people who work for the company. “It is something that I believe has a life of its own and creates a very strong feeling about the company and the people that work in it. . . . A business should not get so big that you lose the sense of identity and belonging.” From his years of practical experience as one of Cadbury’s longest serving chairmen, he adds, “Speaking as an economist, I would say the limits of size are human; they are not economic. What is sadly only too likely to happen is that by becoming a subsidiary, losing its identity and spirit as a business—the orders come from head office which might even be in a different country—the danger is that people no longer see the reason for giving of their best. A business which in economic terms is doing very well can lose the drive of the very people that are in it.”

  That spirit of a business—so crucial to the motivation of its staff—is hard to define and measure. It is not to be found in the buildings or the balance sheet but is reflected in the myriad of different decisions taken by those at the helm of the business. The Quaker pioneers believed that “your own soul lived or perished according to its use of the gift of life.” For them, spiritual wealth rather than the accumulation of possessions was the “enlarging force” that informed business decisions. But gone now, lost in another century, is that omnipotent all-seeing eye in the boardroom, reminding those Quaker patriarchs of the fleeting position of power. And what is there to replace it? Until the Kraft takeover, Cadbury had not quite severed its link with the vision of its founding pioneers. Sadly for some, the umbilical cord has been cut, and there is recognition that some of the indefinable guiding spirit of the founders appears to have been discarded as effortlessly as a candy wrapper. It is perhaps for this reason that so many in Britain spoke out against the loss of a cultural icon.

  Irene Rosenfeld, commenting just before this book went to press, wrote, “Cadbury is a fantastic business, with a proud heritage and a long and distinguished history. This is something we respect and want to build on.”

  This book is a modest challenge to Rosenfeld and to Kraft. If her words are to be taken as anything more than platitudes, and if Kraft is truly to respect the values of Cadbury, it must understand its particular traditions and history. The story of Cadbury, in a way, is the story of a different kind of capitalism.

  Irene Rosenfeld suggested that “the companies have very similar values. In fact I think if John Cadbury had met James Kraft, they could well have been friends.” To be sure, Kraft was an inventive entrepreneur who, like Cadbury, began in a modest way. But as this book shows, the outcomes for the two firms are very different.

  In setting out the history of the chocolate family dynasties, I have endeavored to be as objective as possible in exploring the gains and losses along the way and highlighting the steps that have taken us from the Quaker values of the nineteenth century to today’s global village. Could the companies’ founders have been friends? Are the goals of John Cadbury and his sons reflected in the modern global powerhouse?

  I leave that to the reader to decide.

  PART I

  CHAPTER 1

  A Nation of Shopkeepers

  In mid-Victorian times, the English town of Birmingham was growing fast, devouring the surrounding villages and nearby woods and fields. The unstoppable engine of the Industrial Revolution had turned this modest market town into a great sprawling metropolis. Country dwellers hungry for work drove the population from 11,000 in 1720 to more than 200,000 by 1850. In the city they found towering chimneys that turned the skies thunder grey and taskmasters unbending in their demands. Machines, oblivious to the seasons, never stopped issuing the unspoken command: more labor, more work, and more toil to feed the looms, to fire the furnaces, and to drive the relentless wheels of commerce and industry far beyond English shores.

  Birmingham was renowned across the country for innovation and invention. According to the reporter Walter White, writing about a visit to the city in Chamber’s Edinburgh Journal in October 1852, “to walk from factory to factory, workshop to workshop and view the extraordinary mechanical contrivances and ingenious adaptations of means to ends produces an impress upon the mind of no common character.” The town was a beacon of industrial might and muscle. This was where steam and fire forged with iron and coke, metal and clay to make miracles.

  By the mid-nineteenth century, the foggy streets resounded with hammers and anvils fashioning metal, bronze, and iron into buttons, guns, coins, jewelry, buckles, and a host of other Victorian wonders. Walter White marvelled at the “huge smoky toyshop” and the “eager spirit of application manifested by the busy population.” But he was evidently less taken with the sprawling town itself, which he considered “very ill arranged and ugly” and dismissed as “a spectacle of dismal streets.”

  At the heart of these dismal, foggy streets, opposite today’s smartly paved Centenary Square, there was a road called Bridge Street, which in 1861 was the site of a Victorian novelty: a cocoa works. Approached down a dirt road, past busy stables, coach houses, and factories, it was surprisingly well hidden. But wafting through the grimy backstreets was a powerful aroma, redolent of rich living. Guided by this heady perfume, the visitor was drawn past the blackened exterior, through a narrow archway into a courtyard with an entrance leading off to the heart of the chocolate factory. And it was in this modest retreat that two young Cadbury brothers hurried one day early in 1861.

  There was a crisis in the family. Twenty-five-year-old Richard and twenty-one-year-old George Cadbury knew the wonderful aroma of chocolate disguised the reality. The chocolate factory and its owner, their father, John Cadbury, were in decline. The family faced a turning point. The business could go under completely. John Cadbury turned to his sons for help.

  Photographs of the time show George and Richard Cadbury soberly dressed as Quakers in characteristic plain dark Victorian suits with crisp white shirts and bow ties. Richard’s softness of features contrasts with his younger brother, whose intensity of focus and air of concentration are not relaxed even for the photographer. “I fixed my eye on those who had won,” George admitted. “It was no use studying failure.” He had, said his friends, “boundless ambition.” And he needed it. The family firm was hemorrhaging money.

  By chance, Walter White toured the Bridge Street factory and has left a vivid account of what it was like in 1852. Leaving behind the storehouse crammed with sacks of cocoa beans from the Caribbean, White entered a room that blazed with heat and noise: the roasting chamber. With its four vast rotating ovens, “the prime mover in this comfortable process of roasting was a 20-horse steam engine.” After this, “with a few turns of the whizzing apparatus,” the husk was removed by the “ceaseless blast from a furious fan” and the cocoa, “now with a very tempting appearance,” was taken for more “intimate treatment.” This occurred in a room where “shafts, wheels and straps kept a number of strange looking machines in busy movement.” After yet more pressing and pounding, a rich frothing chocolate mixture flowed, “leisurely like a stream of half-frozen treacle.” This was formed into a rich cocoa cake, which was shaved to a coarse powder ready for mixing with liquid for drinking. Upstairs White found himself in a room where management “had put on its pleasantest expression.” The girls, all dressed in clean white Holland pinafores, were “packing as busily as hands could work. No girl is employed,” he added, “who is not of a known good moral character.” Such a factory, he concluded, “was a school of morality and industry.”

  But almost ten years had passed since Walter White’s visit, and the “school of morality and industry” had been q
uietly dying of neglect. Twenty-one-year-old George Cadbury was quick to appraise the desperate situation. “Only eleven girls were now employed. The consumption of raw cocoa was so small that what we now have on the premises would have lasted about 300 years,” he wrote. “The business was rapidly vanishing.”

  During the spring of 1861, George and Richard wrestled with their options. Pacing the length of the roasting room in the evenings, the four giant rotating ovens motionless, the dying embers of the coke fire beneath them faintly glowing, the brothers could see no simple solution. George had harbored hopes of developing a career as a doctor. Should he now join his brother in the battle to save the family chocolate business? Or close the factory? Would they be able to succeed where their own father had failed?

  It was their father, John, who had proudly shown Walter White around in 1852. But in the intervening years, he had been almost completely broken by the death of his wife, Candia. John had watched Candia’s struggle against consumption for several years, her small frame helpless against the onslaught of microorganisms as yet unknown to Victorian science. Equipped only with prayers and willpower, he took her to the coast, hoping the fresh air would revive her, and brought in the best doctors.

  But nothing could save her. By 1854, Candia had gratefully succumbed to her bath chair. Eventually she was unable to leave home and then she was confined to her room. “The last few months she was indeed sweet and precious,” wrote John helplessly. When the end came in March 1855, “Death was robbed of all terror for her,” he told his children. “It was swallowed up in victory and her last moments were sweet repose.” Yet as the weeks following her death turned into months, John failed to recover from his overwhelming loss. He started to suffer from a painful and disabling form of arthritis and took long trips away from home in search of a cure. After years of diminishing interest in his cocoa business, Cadbury’s products deteriorated, their workforce declined, and their reputation suffered.

  Richard and George knew that their father’s cocoa works was the smallest of some thirty manufacturers who were trying to develop a market in England for the exotic New World commodity. No one had yet uncovered the key to making a fortune from the bewitching little bean imported from the New World. There was no concept of mass-produced chocolate confectionary. In the mid-nineteenth century, the cocoa bean was almost invariably consumed as a drink. Since there was no easy way to separate the fatty cocoa oils, which made up to 50 percent of the bean, from the rest of the bean, it was visibly oily, the fats rising to the surface. Indeed it often seemed that the novelty of purchasing this strange product was more thrilling than drinking it.

  Their father, like his rivals, followed the established convention of mixing cocoa with starchy ingredients to absorb the cocoa butter. As their business had declined, the volume of these cheaper materials had increased. “At the time we made a cocoa drink of which we were not very proud,” recalls George Cadbury. “Only one fifth of it was cocoa—the rest was potato flour or sago and treacle: a comforting gruel.”

  This “gruel” sold to the public under names that were common at the time for cocoa dealers such as Cocoa Paste, Soluble Chocolate Powder, Best Chocolate Powder, Fine Crown, Best Plain, Plain, Rock Cocoa, Penny Chocolate, or even Penny Soluble Chocolate. Customers did not buy it in the form of a powder but as a fatty paste made into a block or cake. To make a drink at home, they chipped or flaked bits off the block into a cup and added hot water—or milk if they could afford it. It is a measure of how badly the Cadbury cocoa business was faring that three-quarters of their trade from the Bridge Street factory came from tea and coffee sales.

  Although promoted as a health drink, cocoa had a mixed reputation. Unscrupulous traders sometimes colored it with brick dust and added other questionable products not entirely without problems for the digestive system: a pigment called umber, iron filings, or even poisons like vermilion and red lead. Such dishonest dealers also found that the expensive cocoa butter could be stretched a little further with the addition of olive or almond oil or even animal fats such as veal. The unwary customer could find himself purchasing a drink that could turn rancid and was actually harmful.

  Although the prospects for the business in 1861 did not look hopeful, the alternatives for Richard and George were limited. As Quakers, higher education was not an option for them. Like all nonconformists, they were legally banned from Oxford and Cambridge, the only teaching universities in England at the time. As pacifists, Quakers could not join the armed services. Nor were they permitted to stand as members of Parliament, and they faced restrictions on other professions such as the law. As a result, many Quakers turned to the world of business, but here too the Society of Friends laid down strict guidelines.

  In a Quaker community, a struggling business was a liability. Failing to honor a business agreement or falling into debt was seen as a form of theft and punished severely. If the cocoa works went under owing money to creditors, Richard and George would face the censure of the Quaker movement or, worse, they would be disowned completely and treated as outcasts within their circle. Quite apart from these strict Quaker rules, in Victorian society business failure and bankruptcy could lead to the debtors’ prison or the dreaded poorhouse, either option raising the prospect of an early grave.

  Ahead was a battle. Defeat was all too possible. The brothers did not have to dedicate themselves to this small space, with their offices scarcely bigger than a coffin. “It would have been far easier to start a new business, than to pull up a decayed one which had a bad name,” George admitted. “The prospect seemed a hopeless one, but we were young and full of energy.”

  To the remaining employees who now had reason to fear for their jobs, “Mr. Richard” appeared jovial, relaxed, and “always smiling,” while “Mr. George” was cut from a different cloth, “stern but very just.” His unremitting self-discipline and his ability to focus every aspect of his life on one goal became legendary. “He was not a man,” a colleague later observed, “but a purpose.” And what George and Richard decided to do next would become the stuff of family legend.

  Richard and George Cadbury were the third generation of Cadbury tradesmen in Birmingham. It was their grandfather, Richard Tapper Cadbury, who had been instrumental in breaking centuries of long association with the West Country and leading the family in a new direction as shopkeepers in the town. At the close of the eighteenth century, as Napoleon prepared for his long march over Europe, the Cadburys, like countless others at the time, exemplified the Britain that the French leader dismissed as a mere “nation of shopkeepers.” And just as Napoleon’s scathing remark underestimated his enemy’s real wealth and capacity for war, so it was easy not to see the huge potential emerging from a new generation of shopkeepers whose connections were only just beginning to reach out across the world.

  “Very little is known of his early life,” writes Richard of his grandfather. “He left home in Exeter when he was fourteen on the top of the coach . . . to serve as an apprentice to a draper.” The young Richard Tapper remembered the morning of his leaving: “My father and mother got up early to see me off by the stage . . . and I thought my heart would break.”

  Richard Tapper was apprenticed in 1782 to a draper 150 miles away in Kent who supplied army uniforms to troops fighting in the American War of Independence. Within a year the war ended, troops were demobilized, and the business went bankrupt. Richard Tapper then secured another opening as an apprentice in Gloucester, where, by the age of nineteen, he was proud to receive wages of £20 a year. After “scrupulously and conscientiously” avoiding any “unnecessary gratification,” he reassured his parents in Exeter, it was possible for him to pay for his own washing and “appear so respectable as to be invited as guest among the first families of Gloucester.” His next move was to London to work for a linen draper and silk dealer in Gracechurch Street. His wages eventually rose to £40 a year, which not only enabled him “to maintain a respectable appearance” but also to “purchase many books.”


  After ten long years mastering the trade, Richard Tapper was longing to start a draper’s business of his own. He was dissuaded from his youthful dream of sailing for America by a family friend who warned him “that the country is still far from settled.” Nor could he seek adventures in Europe with France in the frenzied grip of Robespierre’s Reign of Terror and at war with its neighbors. So in 1794, equipped with enthusiasm and, through the Quaker network, quite a few references, Richard Tapper took the stage to Birmingham with a friend, Joseph Rutter. They had heard of an opening for a “Linen Draper and Silk Mercer” in the town and seized their chance.

  The draper’s shop was soon successful enough for Richard Tapper to buy out his partner and start a family. He married Elizabeth Head in 1796 and seven children followed over the next seven years. Elizabeth still found time to help in the shop, dressing the windows with fine silks and linens and taking an interest in the changing fashions. One year, they were obliged to enlarge their front door to accommodate the fashion for puffed “gigot” sleeves, strengthened with feather pads or whalebone hoops. Records show that Richard Tapper’s business was so successful that in 1816 a second shop at 85 Bull Street was also registered in his name.

  Like many Victorians, the young Richard Cadbury had a fascination with family history and compiled a “family book” on his ancestors complete with news cuttings, sketches, and Quaker records. This provided a vivid portrait of his grandfather’s life. One of the problems Richard Tapper had to deal with in his shop was theft. After repeatedly losing silk that cost up to twelve shillings a yard, he felt he had to take action but soon came to regret it. He stopped a woman in his shop who had two rolls of silk hidden under her cloak. When he went to court to hear the outcome, to his alarm the judge sentenced the woman to death. “I was appalled,” Richard Tapper told his children years later, “for I never realised what the sentence would be. Without delay I posted to London, saw the Secretary of State and got the woman’s sentence commuted to transportation.”