A semi-medicinal drink made from bitter powder, cocoa was until the 1850s the nearest thing to “chocolate.” Cadbury’s did as much as any of its competitors – including Hershey in the US and Nestle in Switzerland – to transform chocolate from unpalatable cocoa to the mass-market treat it is today. It may have had the greatest influence on the evolution of modern chocolate, because for the century after Cadbury’s foundation in 1831, Britain – its home market – was the world’s richest, most technologically advanced, and most competitive consumer marketplace. The number one player in that market tended to set the global standard.
Cadbury’s Purple Reign is an official corporate history. It is most valuable in explaining how the supply side of the chocolate industry created the conditions for universal chocolate demand. Today we take it for granted that chocolate is cheap, tasty, and accessible. None of that was true in 1900. Bradley shows how Cadbury implemented technological innovations – first reformulating cocoa with higher quality ingredients, and then introducing milk chocolate bars – that stoked the fires of demand. The British manufacturer invented none of the technologies that drove its business, preferring to adapt (like Apple and Microsoft) the inventions of Dutch and Swiss competitors. “Cadbury’s success was not that they were chocolate innovators, but rather the way in which they entered, exploited, and grew markets developed by others,” Bradley writes.
The company’s genius lay on the manufacturing and logistics side. Bradley argues that the decades-long trend of Cadbury chocolate improving in taste while dropping in price resulted from ever- increasing economies of scale. By the 1890s the company had so mastered factory production that hundreds of thousands of tourists visited its factory town of Bournville – the inspiration for Willy Wonka – to marvel at this wonder of the Industrial Revolution. Vast and concentrated industrial capacity, excellent transport links, vertical integration down to ownership of the Ghanaian cocoa plantations: all of these factors created efficiencies that expanded margins. And Cadbury passed on the savings directly to the consumer, slashing the price of its iconic Dairy Milk chocolate bar down to 1 penny by the outbreak of the First World War.
The price-cutting was strategic. It drove inefficient competitors out of business (its archrival Fry’s is now a note in the history books) and increased Cadbury’s market share to an unassailable level. But it also benefitted consumers in Britain and across the former British Empire. Chocolate was now super-cheap and accessible from London to Harare to Sydney.
OUR TAKE: Cadbury’s greatest legacy is its role (alongside Hershey) in turning chocolate into an affordable luxury. The combination of low prices, decent taste, and first-class distribution capabilities forced competitors to match its standard. Demand for the thing we now call chocolate was surely latent in consumers all along, because there is a clear physiological response to the combination of cocoa and sugar wrapped up in this treat. But for consumers to discover this taste, someone had to sell them a chocolate bar that tasted so good they wanted to buy another one immediately. It helped that it was a penny a piece.