Kraft eats Cadbury

When economic times are hard, big companies take the opportunity to eat smaller ones. This process does not respect national boundaries, particularly when an economy is as open to outsiders as Britain’s. This is an old story, so it’s hard to see quite why the prospective takeover of Cadbury by Kraft, the American food conglomerate, has got people going quite as much as it has. Granted, jobs might go – but jobs always go. Granted, the new management might not be sympathetic to the workforce – it usually isn’t. Granted, they’re foreign – these days, that’s the norm. British companies are taken over by foreign firms all the time. As Tony Blair once pointed out to the French president, the electricity in 10 Downing Street is supplied by a French company. So why the fuss?

Two reasons. First, there’s an election coming up, and the recession has already caused havoc in the Midlands, where Cadbury is based. Hence, no doubt, the anti-Kraft intervention by Peter Mandelson, who as former commissioner of trade at the EU knows how purely hypocritical it is to protest.

Second, and more interestingly, there’s something about sweets and chocolates which taps deep into people’s psyches. Our feelings about them are often intertwined with memories of childhood, especially memories of treats and comfort and carefully weighed decisions about pocket money. The whole modern emphasis on branding is depressing, but chocolates are one of its benign manifestations, because they are so humble, so daily, because people don’t use them as a form of self-definition, and because the differences between them are real: a Crunchie is not just a differently packaged Mars bar – it’s a genuinely different thing. Consumers will have sincerely held differing opinions about their merits.

Added to this is the fact that Britain is, or was, a great creator of cheap chocolate. The only serious competition comes from the Mars family, who were initially based in the US. The patriarch, Frank Mars, invented the Milky Way in 1923 and then his son Forrest came up with the Mars bar in 1932. His father sent Forrest to the UK to start a company there; in subsequent years, a senior employee of Mars told me, the great obstacle to reuniting the brands was the worry that British consumers would find the name Snickers irresistibly hilarious. (For younger readers, what is now called Snickers used to be called Marathon.) Apart from that, all the great chocolate bars are British, and the first of them, and still my favourite, was Cadbury’s Dairy Milk, invented in 1905. Other great British bars appeared in a burst of heroic creativity in the 1920s and 1930s: the Flake in 1920, Cadbury’s Fruit and Nut in 1928, Fry’s Crunchie in 1929, the Aero in 1935, then in 1937 no fewer than three masterpieces, the Rolo, the Kit Kat and Smarties. All British inventions. According to Roald Dahl: ‘In music, the equivalent would be the golden age of Bach, Mozart and Beethoven. In painting, it was the equivalent of the Italian Renaissance and the advent of Impressionism at the end of the 19th century; in literature, Tolstoy, Balzac and Dickens.’ Cheap chocolate is one of the things that this country used to be very, very good at.

Perhaps this reflects the fact that chocolate is made by an industrial process. We can file it under Great British Manufacturing Successes, rather than in the thinner file of British Foods Which Conquered the World. Chocolate is the only food I can think of which is inarguably better because of industrial manufacturing; the process that turns the bitter, borderline inedible seed of a tropical plant into something so rich and satisfying is something of a modern miracle. Ultra-posh dark chocolate is even more modern: the now popular 70 per cent cocoa solids chocolate was only invented in 1986, by the French company Valrhona. So the takeover of Cadbury, if it were to happen, would be yet another version of British industrial decline.

At the time of writing, it is by no means certain that Kraft are going to succeed in their bid. They are offering 710p a share, but the stock price is currently 792p – which means that the market doesn’t think the offer is adequate. Other companies have been mentioned as possible saviours of the British firm, one of them Hershey, America’s closest equivalent to Cadbury. In fact, Hershey sells Cadbury-branded chocolates in the US, as a legacy of various past deals, but the chocolate is made to a different formula and doesn’t taste the same. The technique for blending milk into chocolate bars is not straightforward, since cocoa beans reject water and are very hard to emulsify. (For the first several hundred years of its use as a food stuff, chocolate was consumed exclusively as a drink.) Milk powder was invented by the Swiss scientist Henri Nestlé, and its blending with chocolate was pioneered in 1875 – which is why the Swiss were, and still are, the market leaders in posh milk chocolate. American chocolatiers did not figure out the process and when they came to make chocolate did so by a slightly different technique. Hershey use an additive called PGPR in the place of some cocoa butter, and also use more sugar and less cocoa – 11 per cent in their standard bar, as opposed to the 23 per cent in Cadbury’s Dairy Milk. However, it’s highly unlikely that they would be so reckless as to change the formula of Cadbury’s basic crumb – that’s the standard chocolate mix used in all their bars – and they would likely be a more sympathetic owner of Cadbury than Kraft.

There’s also the European option, in the form of Ferrero. This company has an unserious reputation in the UK because of their amazingly bad television ads. These feature their signature product, Ferrero Rocher, being offered at an ambassadorial reception, and the punchline: ‘Mr Ambassador, with these chocolates you are really spoiling us.’ The ad is a joke but the company, and the man who founded it, are not. Michele Ferrero took over the family sweet firm in the 1950s and turned it into a continent-wide market leader, with a turnover of €6.2 billion. In the process he was responsible for the invention of Ferrero Rocher (of course) but also Nutella, Kinder eggs and Tic Tacs. The company’s products show an understanding of the small drama of opening and eating sweets, a pleasurable fiddliness in the moment of anticipation. Ferrero’s company is as firmly rooted in his Piedmontese hometown, Alba, as Cadbury is in its base of Bournville in Birmingham. If Cadbury isn’t to stay British-owned, Ferrero might make a good fit. Maybe Michele can come up with some important new chocolates, too.