The battle for chocolate

OPINION: The chocolate war involves two iconic brands, the juggernaut that is Cadbury and the little Kiwi battler in Whittaker’s.

They have both been in the press of late, but it reminded me of Coca Cola, who, a number of years ago, having failed blind taste tests in losing to arch rival Pepsi, changed its one hundred year old recipe to a new flavour; one that the public would be sure to love. They forgot their own history and didn't bank on nostalgia; Coke is popular for a number of reasons, none the less that it is identified as part of US culture; it is the ultimate brand.

I grew up loving chocolate; my favourite being Cadbury's Caramello, but the Whittaker's peanut slab was somewhat legendary too.

Cadbury changed the recipe; all for a raft of reasons; putting in palm oil instead of cocoa butter.

They've now changed back; because it tastes better? or because of the rain forests? or because of the orang-utans? (ironic given the Phil Collins revival and the drumming gorilla) or because of public pressure?

Well it doesn't really matter, because what it shows, and what is refreshing, is that the power of the consumer has been overwhelming.

No longer can any manufacturer arrogance prevail; the customer is all powerful, and it is a good lesson.

To mess with the customer is to forget the age old mantra, "the customer is always right".

We all need to concentrate on what the customer wants. If we can't supply what they want, they will vote with their feet.

Never underestimate both the power of the brand and the power of the customer.

Of course, it is the customer that makes the brand!

Sticking with chocolate; it's one that has again raised hackles, this time with resizing. Again, irony. The consumer is suffering at the moment, with every penny counting, so the manufacturer makes it cheaper, but shaves a bit off the top.

I remember when it first happened with toilet paper, of all things! They narrowed the width. The point is, if there is price pressure, and the company still needs to make a profit, then volume (or size) is the balancing variable. An absolutely valid technique; but once again, judged by the customer. If the customer feels aggrieved, whether rightly or wrongly, they will...always be right.

Adam Davy is Managing Partner of the Wellington Office of BDO Chartered Accountants and Advisers.