Cadbury may regret changing recipe

OPINION: It's ironic that the company that did so much for drum-playing gorillas now stands accused of destroying the habitat of gorillas' great ape cousin, the orangutan.

Cadbury has been buried in criticism after recent product changes but remains defiant that it is only guilty of good marketing - understanding customer needs and changing its products in response.

A lot has changed from the late 1980s when I worked in the computer department at Cadbury in Dunedin. The advertisements were run, the distribution channels serviced and good quality product delivered. Nobody would have imagined the humble chocolate bar could be so controversial.

Early this month both Auckland Zoo and Orana Park in Christchurch banned Cadbury chocolate, citing its new palm oil ingredient as environmentally destructive. Palm oil production has caused natural rainforest to be destroyed in several countries, threatening the habitat of creatures such as the orangutan.

This has kicked off a storm of protest against Cadbury, although it maintains its palm oil is sustainably harvested. Not only had it reduced the amount of cocoa butter in its product and replaced it with palm oil, it had reduced the size of some of its blocks by 18 per cent (along with the price, it should be noted).

Arch-rival Whittaker's, a locally owned manufacturer, has been relishing the controversy. Its aggressive comparative advertising campaign has boosted brand awareness and, according to the company, contributed to increased sales.

Cadbury's response? It's all about reflecting consumer taste and the opposition is a "vocal minority". According to Cadbury, the whole thing has been a response to market need. Palm oil helps give the product a softer "bite" that people like, the chocolatiers said after considerable consumer testing.

What leaves a bitter taste in the consumer's mouth is the fact that the company has been struggling in recent times. Its 2008 revenue fell to $283.4 million from $294.2m the year before, with profit dropping by more than 30 per cent to $17.7m.

Most consumers suspect there is more than an element of cost-cutting in the move, and when you add in the threat to the fluffy old orangutans, it is a sticky situation for Cadbury. If the product was meant to be so much better, at a more affordable price, why didn't Cadbury celebrate this with consumers, rather than pull out this spin only when things turned bad?

Cadbury is a venerable old brand but it has looked slow and plodding in response to this situation. It seems to be wedded to the old model of spending up large, charming us all with cool television adverts made by its British headquarters (such as the drumming gorilla and the eyebrow kids), putting its products in the shops and expecting we'll rush into buy.

It clearly underestimated consumer response. Traditional media coverage has been intense and none too flattering, with scrutiny of Cadbury on television, print and radio.

What has been more interesting is the online response. Internet technologies enable consumers to mobilise quickly, sharing information and displaying their outrage. Facebook pages, online petitions with many signatories, thousands of twitter messages and even people selling "Orang- utan friendly" Cadbury chocolate (that is, pre-palm oil) on Trade Me emerged within days of the controversy breaking.

Cadbury has made the fatal, although common, mistake of forgetting that the consumer owns the Cadbury brand, not it. It only exists in our collective consciousness. If it wants to change things that's fine, but show us the respect we deserve and be honest about it. Don't hide behind PR spin - tell us why it is better for us and why we are going to like it more.

Will it have a lasting effect on Cadbury? After all, it was Kiwis' most trusted brand for the seventh year in a row in this year's Reader's Digest survey.

I believe this controversy may take its toll.

Another company introduced a "great" new product after much consumer testing. It ignored initial storms of protest and kept on selling. Only when the financial impact began to hit did it finally reverse its decision and go back to the old product the consumer demanded. Coca-Cola is flying again now, but the New Coke debacle of the 1980s almost destroyed the company. Cadbury should be learning similar lessons.

At the core of the lesson is that it is not just about the product. The reason why Kiwis have traditionally bought Cadbury is not just the taste of the chocolate. We have an emotional connection with the brand - built from many great experiences of buying and enjoying its products, from our trust that it is an established and reputable company, from an expectation it is environmentally responsible.

Cadbury has not respected that strong connection, and is suffering for it. The internet has given us consumers a lot more power, which lumbering multinationals such as Cadbury need to get better at respecting.

* Owen Scott is from marketing company Concentrate Ltd. www.concentrate.co.nz He likes black forest chocolate.

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