What big firms do wrong when buying small ones

By Rick Pendrous contact

- Last updated on GMT

Chocolate ambassador Josephine Fairley warned major corporations often make mistakes when they acquire small brands
Chocolate ambassador Josephine Fairley warned major corporations often make mistakes when they acquire small brands

Related tags: Chocolate

One of the biggest failings that big companies make when they acquire smaller brands is to attempt to “value optimise” and cut costs, according to Green & Black’s co-founder Josephine Fairley.

When Green & Black was sold by Fairley and her husband Craig Sams in 2005 to Cadbury, which is now part of Kraft spin-off Mondelēz, the new owner wanted to move production of the company’s organic and Fairtrade chocolate from the specialist producer in Lake Como, Italy to a new factory in Poland.

However, Fairley and Sams resisted the move, she said, giving the Society of Food Hygiene and Technology’s annual lecture in November. “There was a minor revolution in the office,”​ she said. “And basically we told Cadbury there was no way this could even be considered unless that factory could match the quality of the chocolate.”

Damage trust

Major corporations often make mistakes when they acquire small brands, which have the potential to damage trust in that brand, said Fairley. She still acts as a ‘chocolate ambassador’ for Green & Black.

“First of all, there is often an attempt to value optimise the product by cutting costs somewhere; reducing the quality of ingredients and hoping that the customer isn't going to notice. Because it will save a chunk on the bottom line,”​ she said.

After many costly attempts to match the quality of the Green & Black’s chocolate produced at the Lake Como factory, Cadbury admitted defeat, said Fairley. “Those final decisions about a reformulation must always be taken by the marketing department and not the finance department,”​ she said.

Fairley and Sams founded Green & Black in 1991, as a high-quality organic chocolate brand. It subsequently acquired Fairtrade certification.

‘Establishing trust’

“That symbol​ [Fairtrade] really does reassure the customer,”​ said Fairley. “I think independent third-party certification by a recognised body is the most effective way of reassuring the customer about traceability and establishing trust.”

However, Fairley criticised the proliferation of other “meaningless symbols”​, which she said damaged consumer trust. “I’m really interested in how we regulate that,” ​she said. “There are obviously phrases like grass-fed, free-range, crate-free, cage-free, etc, which are not policed and can be fairly meaningless.”

‘Keeps us clean’

Fairley claimed Green & Black’s strong organic and Fairtrade credentials had prevented Mondelēz from “tampering with the core values”​ of the brand. “Because we are organically and Fairtrade certified that sort of keeps us clean,”​ she said.

Meanwhile, Mondelēz International –  owner of the Cadbury's Creme Egg brand – has sparked controversy after changing the recipe for the confectionery icon, writes Mike Stones. Creme Egg lovers were outraged to learn the food manufacturing giant has switched the composition of the egg shell from “Cadbury Dairy Milk chocolate to a standard, traditional Cadbury milk chocolate”.  

Some Creme Egg aficionados were also disappointed to learn that there will now be five eggs per pack instead of six.

But a spokesman for the firm said: “The fundamentals of Cadbury Creme Egg remain exactly the same – delicious milk chocolate and the unique creme centre consumers love.”​ 

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