Chocolate Wars

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Chocolate Wars, by Deborah Cadbury, HarperPress £20, 352 pages

It wasn’t easy being Quaker. Banned from careers in government, the church or law and with their pacifism barring a military career, they were forced into commerce. Their high ethical standards meant they couldn’t be involved with alcohol, gambling or making armaments, so the grocery trade became a natural outlet for their energies.

All the great English chocolate dynasties were Quaker: Cadbury, Fry and Rowntree. Their belief in the brotherhood of man led to paternalistic employment practices. They built garden towns for their employees with crèches, sporting facilities and healthcare. David Cameron’s “Big Society” was second nature: they believed that co-operation and social provision were a necessary and natural adjunct to making money. They encouraged volunteering and debt avoidance as fundamentals of behaviour – until competition from the state made their efforts redundant. If the welfare state encourages dependency, the socially inclusive world of the chocolate industry encouraged self-reliance, hard work and abstemiousness. The Birmingham suburb of Bournville had no pubs and no tolerance for slackers in a tight-knit community – but generous provision for those who repaid the company’s confidence.

Deborah Cadbury’s branch of the Cadbury family wasn’t involved in the chocolate business but she garnered a deep impression from a childhood visit to her cousins’ company and the reader of Chocolate Wars feels they are getting an insider’s view. Her own background as a historian and TV documentary maker means that this book communicates in an episodic and visual style, making what risks being a dull subject gripping as it flips back and forth around the world documenting parallel events in the emergence of the chocolate industry.

These strait-laced, kind-hearted Quaker pioneers built great chocolate empires and fended off 100 years of assaults on the British market from Van Houten in Holland and Nestlé, Suchard and Peter from Switzerland, while building market domination wherever the globe was coloured pink.

Chocolate Wars is much more than a story of a few family businesses – it covers the worldwide growth of the now near-universal addiction to chocolate from the rather unappealing greasy adulterated chocolate drinks that prevailed at the beginning of the Victorian age. The impact of innovation, war and new technology on business development are all clearly and cleverly interleaved to make this book an enlightening overview of chocolate’s evolution from tiny beginnings to what is now a $500bn industry.

The book dwells in detail on the ethical dilemma faced by the early Quaker chocolatiers when they discovered that their cocoa bean supply came from plantations that relied on slave labour and tells how the Ghana cocoa industry was fostered to provide a smallholder-owned alternative. Yet there is just a fleeting mention of Fairtrade and not a word about Green & Black’s, the pioneer brand that my wife Jo and I created, which launched Maya Gold, the first ever Fairtrade-marked product, in 1994. We pioneered both the organic and Fairtrade categories and were a Cadbury acquisition in 2005. The sad fact is that slavery continues to be an issue for chocolate makers, albeit one that they have now joined forces to stamp out.

One question that the book doesn’t answer is: “Why Switzerland?” Chocolate doesn’t set at high temperatures and so at cooler latitudes and higher altitudes the chocolate making season is longer. Swiss watchmakers are good at the precision technology needed to produce good chocolate and Switzerland had the first structural dairy surpluses in Europe, providing cheap milk for processors. The fact that non-Swiss companies house their European headquarters in Switzerland points to another factor: taxation. The lamentation about job losses in Bristol (which Cadbury had already irreversibly exported to Poland) overlooked the greater loss: Cadbury’s annual contribution from its global activities to HM Treasury.

What triggered Cadbury’s loss of independence? Selling Hershey the US rights to the Cadbury brand in 1988 meant Cadbury could never become a truly global chocolate company. When Cadbury sought to take over Rowntree and become the world’s largest chocolate company the Thatcher government blocked it with a referral to the Monopolies Commission, then allowed a Nestlé takeover that handed the Swiss company global dominion. The disposal of Schweppes soft drinks in 2007 reduced debt and increased profitability but also made the company smaller – just about affordable for Kraft although they still had to make a $3bn asset disposal to fund the purchase.

It may be presumptuous to disagree with the dissenting view of my fellow Omahan Warren Buffett, but Kraft CEO Irene Rosenfeld saw a window of opportunity and seized the moment before it could close. For that Kraft’s shareholders can be eternally grateful – she got a great deal that will amplify their fortunes. The hedge funds dealt the final hand, but the vulnerability was already there and she went straight and determinedly for it.

The book ends on a slightly funereal note, regretting the demise of great British chocolate makers. But all is not doom and gloom: creative destruction is hard at work in the chocolate industry, with new entrepreneurial ventures eroding the concentration of power among the legacy chocolate giants. Britain is leading this new chocolate renaissance and it is becoming a worldwide gastronomic phenomenon.

Craig Sams founded Green & Black’s organic chocolate in 1991 with his wife Jo Fairley. It was sold to Cadbury in 2005 and he continues in the role of president of the company

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