It’s Easter and chocolate is very much on the menu. But it could be meltdown for the industry as the cost of cocoa soared to a historic high of more than $10,000 a tonne last week after two years of poor harvests in the key west African growing region.
Sitting calmly among the relics of Cadbury’s history in the company archive, Louise Stigant, the boss of Mondelēz’s UK arm – which includes the British chocolate brand celebrating its 200th anniversary this year – is charged with making sure it has a future, as key ingredients, including sugar as well as cocoa, have soared in price.
Half of the Easter eggs sold by the company are picked up in just two weeks of frantic trading, making it the second busiest time for chocolate brands behind Christmas.
Consumers have had to grow accustomed to a higher cost of living over the past couple of years. Cadbury was no exception when it came to raising prices, increasing them on some products by more than 8% in January, on top of previous increases in 2023. There was also a controversial reduction in size of the main Dairy Milk bar in 2022 and of course the 2015 change in recipe of the Creme Egg.
“We’re at 40-year record [cocoa price] highs. So it is very significant,” says Stigant. “We do have to make some choices that are tough choices, but we believe are right as we focus on making sure that [our chocolate bars] taste delicious.”
She admits prices could rise again, or chocolate bars be trimmed down, “always as a last resort”, as the price of sugar and cocoa continues to increase and the business faces “considerable challenges”.
“We understand the context that we’re playing in, we’ve taken decisions to absorb some of those costs over a period of time. And then we make very careful decisions about when and how we elevate our list price to our retailers, as a consequence of some of those input cost changes.”
We’re in Bournville, where the smell of chocolate still wafts from the Cadbury factory over the Birmingham suburb 200 years after John Cadbury founded the brand.
Around us are carefully displayed relics of some of the many iterations of its popular treats, from Dairy Milk and Wispa bars to Creme Eggs and Milk Tray boxes, but also those that no longer exist, such as Spira and Aztec bars and Cadbury’s Classic Ginger selection boxes.
As the group tackles rising costs, Stigant says: “You only need to look around this room and the heritage that exists, and that sense of the nation’s favourite, [to see] that it is absolutely fundamental that when people pick up a [Cadbury’s product] it delivers against the quality and the taste that they’re expecting of us.”
John Cadbury, a Quaker, began selling drinking chocolate in Bull Street, Birmingham, in 1824 as an alternative to alcohol, and began manufacturing in 1831 from a nearby warehouse. In 1879, John’s sons Richard and George moved the business to a rural area which they renamed Bournville, building workers’ cottages as well as a factory.
In 2010, there were fears the brand would shift all production overseas after it was bought out by the giant US corporation Kraft. While a factory in Somerset was controversially closed not long after the takeover, not only do the streets of Bournville remain a chocolate box of social provision – with homes, sports fields and parks – but the factory, and eight other sites in the UK employ 4,000 people.
Now part of Mondelēz – the snacking business that Kraft spun off in 2012 – Cadbury has brought back production of more Dairy Milk bars to the UK as well as Freddo and other brands. Stigant says the group has invested £270m in its UK sites, including its sciences lab in Reading.
“Twelve years on, I would imagine that if you were to walk into most businesses they’ve changed, and this business has changed. We’ve had to navigate lots of different opportunities and challenges. And I think we’ve done that successfully. But I think that ethos, that underpinning of care for one another, and generosity of spirit, remains in the culture that we have today.”
Stigant, who started her career with five years at the upmarket grocer Waitrose after taking a food marketing degree at Sheffield Polytechnic, is a walking example of a company that is prepared to do things differently. She fell into the food industry after enjoying a rather last-minute choice of a business studies A-level. Her interest in food came from her mother, an excellent cook as well as a hairdresser, while her father was a printer. “I had no experience of the world of sort of food or commerce,” she says.
Stigant says she was “brought up on Cadbury” but it was Kraft that took her on from Waitrose in 1994, where she worked her way up to head Mondelēz’s UK business in 2018. As a relatively rare female business leader in the UK, Stigant says that “a really important element of how I want to show up when I come to work is helping people reach their potential and see their possibilities”.
Another effort to maintain the Cadbury family ethos is an investment in Cocoa Life, which has been helping farmers to operate more sustainably, with an aim to secure all cocoa via the programme by the end of next year. About $400m has already been ploughed into initiatives including planting more trees, empowering women and tackling child labour in partnership with NGOs including Fairtrade, with a further $600m set aside until 2030 with the aim of supporting 300,000 farmers.
Mondelēz’s research centre in Reading is also working on ways to help farmers improve cocoa yields in the face of more erratic weather caused by the climate crisis. The research includes creating a farm in Indonesia designed to “support a better robustness against climate change”.
Then there is a totally different kind of research as the whole snacking industry faces increasing regulatory efforts in the battle against obesity. In England, restrictions on the marketing of food and drink that is high in fat, salt and sugar (HFSS) have so far been quite weak. Such products can no longer be displayed in prominent places in stores – such as aisle ends or by tills – but restrictions on advertising and multi-buy deals have been delayed until next year.
Mondelēz is responding by developing products that fall outside the HFSS restrictions, such as its Fruitier & Nuttier trail mix and bars. It is also working on reduced sugar versions of Crunchie, Double Decker and Fudge, and has launched the relatively low calorie Delights, with 91 calories per serving. Those experiments come despite recently ditching a low-sugar version of the Dairy Milk bar less than five years after it launched because of lack of demand.
“One thing we have learned is that when people want chocolate or a treat they are looking for that moment to be the Cadbury they know,” says Stigant.
Executive summary
Age 56
Family “Husband and two children, aged 22 and 25, who are all sport mad, and a crazy golden labrador.”
Education Sheffield Polytechnic (food marketing sciences).
Pay “I recognise the privileged position I am in, and the access to Cadbury chocolate is a real perk.”
Last holiday Sri Lanka.
Best advice she’s been given “Treat others as you’d like to be treated.”
Biggest career mistake “Promoting a Jello easter egg mould … it was a wobbly career moment!”
Phrase she overuses “What’s the worst that can happen?”
How she relaxes “Laughing loudly with family and friends.”
