Chocolate Wars

by Deborah Cadbury

  Poring over a map of the fields—Yellow Meadow, Far Hall Meadow, Barn Close, Fox Hill—George began to sketch out his plans. He appointed William Harvey, a young local architect to help him. At the heart of the model village would be a green, graced with trees, winding paths, and rose beds. The homes would be nestled around the village green, each one individually designed to avoid ugly uniformity and set back from wide, tree-lined carriageways. Harvey was strongly influenced by the Arts and Crafts movement, which was inspired by John Ruskin and others to promote craftsmanship in art and architecture. Harvey’s houses had a cozy English cottage feel, with stepped gables, timber porches, and Venetian windows over canted bays. Their spacious gardens were 140 feet long at the back and were planted with several fruit trees to give a vista of blossoming trees in the spring. More than 10 percent of the land was set aside for open spaces, including parks, lawns, tennis courts, and playgrounds. On hand to help was the Gardeners Department at Bournville, which could provide support to those aspiring owners who had never grown anything before.

  The model village served to complement changes at the rapidly expanding factory. In 1895 George and Richard turned land adjacent to the chocolate works into a men’s recreation ground with a lodge. Soon plans were underway to build a cricket pavilion. On the other side of Bournville Lane, twenty-three acres around Bournbrook Hall were turned into women’s grounds. The Martin’s pool, where the brothers and staff had skated in the early years, was turned into a lawn surrounded by shady pathways. A section was laid out for croquet, swings, and other games. Plans were made for a swimming pool and an ornamental pond. George’s grand scheme was meant to demonstrate that rather than using land to benefit private individuals, land reform could benefit the whole community.

  Bournville village, however, was not a charity. Houses were available at a price of up to £250. Loans were available at low rates; 2½ percent if borrowing less than half the value of the home, 3 percent for a larger loan. These loans were lower than the average rent and enabled an applicant to own his house outright after twelve years. In this way, the would-be homeowner was not only encouraged to save but could also aspire to a better lifestyle and more secure future for himself and his family.

  George Cadbury was not the first to try creating a model city. In 1853, a pioneering industrialist in the Yorkshire wool industry, Titus Salt, had constructed a model village for his millworkers. In 1888, the leading soap manufacturer, William Lever, created Port Sunlight on fifty-six acres of marshy land on the banks of the River Mersey near Liverpool. Both schemes were designed to benefit the workers. George’s plan, however, went further in that he hoped to provide housing for Bournville staff and a broad, social mix of people drawn from all walks of life. He wanted his model community to become a template to raise living standards of the poor elsewhere in England. Any investor, he believed, could operate such a scheme without losing money, something he hoped to demonstrate by extending his model village using revenue from the estate. As building got underway in 1895, the homes proved so popular that George was soon negotiating for additional land.

  But the utopia could not survive without funds. The Cadbury brothers faced growing competition from abroad. The next challenge came from left field, from their old rival, the Dutch firm of Van Houten, which had come up with a technical breakthrough that could threaten the success of their chocolate empire.

  CHAPTER 10

  I’ll Stake Everything on Chocolate!

  WEESP, HOLLAND

  At his factory in Weesp, Holland, Coenraad van Houten, who sold George Cadbury his first cocoa press, was sitting on top of another breakthrough that had the potential to radically transform the cocoa business once again.

  Van Houten wanted to improve the quality of drinking cocoa. He took a scientific approach to the problem, systematically testing out different ideas. It was known that the Aztecs added wood ash to their preparations to counter the stringent acidity of cacao. Working on the same principle, Van Houten experimented with adding alkalis, such as potassium or sodium carbonate, during processing. The result took him by surprise.

  When Van Houten added alkaline salts before roasting the bean, he found the cocoa tasted less bitter. But to his delight, there were other unexpected benefits in the texture and flavor of the drink. Although the alkalized cocoa was not completely soluble in milk or water, it was more miscible than any other cocoa product, blending more evenly in solution and becoming easier to swallow. Better still, the alkali enhanced the rich cocoa taste. The cocoa powder was darker, strongly aromatic, and altogether smoother and more chocolatey. When he released samples of his new drink to the public, they loved it. He began selling the product in the 1860s and gradually word spread. No one knew the exact secret, but the process earned the nickname “Dutching.”

  By the late 1880s, Cadbury’s travellers were troubled by the growing presence of Dutch cocoa. Wherever they went, the smiling face of the glamorous model on the packaging of Van Houten’s cocoa greeted them, proclaiming this was “best and goes furthest.” What is more, this seemed to be achieved effortlessly. Grocers stocked Dutch cocoa simply because the public asked for it, and for the Cadbury brothers, this could spell catastrophe. Their winning streak could be in jeopardy. Although sales of their Cocoa Essence were still growing as more people consumed cocoa, there was strong evidence to suggest that their best-selling product was achieving a smaller slice of a burgeoning market. By the early 1890s, their market share was clearly in decline.

  Richard and George were caught in a dilemma. They had staked their reputation, even their name, on purity. So how could they possibly start adding chemicals like alkaline salts? It would make nonsense of all their earlier claims.

  Worse still, Van Houten’s flyers showed that a distinguished group of British scientists agreed that their cocoa drink was superior to anything else. Professor Attfield of the Pharmaceutical Society of Great Britain, Dr. Theophilus Redwood, emeritus professor of chemistry and pharmacy, and Dr. John Muter, former president of the Society of Public Analysts, tested Dutch cocoa, and they sang its praises: “The alkaline salt as introduced by the Van Houten preparation, not only does not spoil but very greatly improves the cocoa both in its sensible and nourishing properties.” The eminent panel applauded Van Houten’s ingenuity and scientific approach, adding, “Van Houten’s cocoa merits the term ‘soluble’ more fairly than any other cocoa.”

  George Cadbury, true to character, went on the offensive. Convinced that purity stood for quality, he set out to prove that alkaline salts were risky contaminants. The public must be warned that Dutch cocoa was not pure and had added chemicals. Once they knew, surely they would win back consumers. The first step was to use the Cadbury packaging to communicate their views. An explicit warning appeared beneath the sweetly smiling Cadbury girl assuring the public that while their cocoa is pure, “Among the Cocoas that do not answer to this description are those of foreign make, notably the Dutch, in which alkalis and other injurious colouring matter are introduced.” Richard and George soon found experts of their own willing to fight on their side of the battle, including the ever-obliging medical profession.

  The Birmingham Medical Review of October 1890 was in no doubt where they stood. “Quite apart from any question as to the injury resulting to the human system from taking these [alkaline] salts,” they stormed, “it would only be right that the medical profession should resolutely discountenance the use of any and all secret preparations.” Scientists writing in Peterson’s magazine in 1891 went so far as to specify what injury alkalis might cause: “They dissolve animal textures . . . and excite catarrh of the stomach and intestines.” Dr. A. J. H. Crespi went further, arguing that foreign cocoas with alkaline salts were quite simply “dangerous and objectionable.” Even on the continent—though not in Holland—Dutch cocoa was given the thumbs down. One anonymous German expert declared that Dutch alkaline cocoa is “in the highest degree destructive,” damaging “the essential constituents of cocoa.” In s
hort, he fumed, the Dutch method is “perfectly barbarous.” Cadbury’s efforts soon made Dutch cocoa look like something Machiavelli might administer to a sworn enemy.

  But nothing could entice the British public away from its favorite new chocolate drink. Sales for the more soluble Dutch cocoa soared, reaching 50 percent of the British market in the 1890s. George and Richard had to accept that purity was less of an issue than in the past, when people had to worry about manufacturers adding red lead and brick dust to their cocoa. Consumers were now confident that their cocoa would not harm them, and they wanted a more enjoyable drink. The Cadburys had nothing to match what the Dutch offered.

  And then the travellers arrived with more bad news. It came in the form of Swiss chocolate.

  VEVEY, SWITZERLAND

  It had not been easy for Daniel Peter. After the initial excitement of discovering his revolutionary milk chocolate drink in 1875, it took almost twenty years to make headway scaling up his chocolate enterprise. His efforts to turn milk chocolate into a bar for eating were equally troubled. A key stumbling block was funding. In the 1870s he paid several visits to England, where he confirmed that there was a hearty appetite for his creamy, milk chocolate drink. It was unique, unlike anything else on the market, and very popular. The English could not get enough of it. But Peter struggled to convince potential backers in Switzerland of his business proposition. His manufacturing process was fraught with pitfalls that steely-eyed Swiss financiers could spot a mile away.

  It was hard to create a standardized milk-based product for export in bulk. Milk was a tricky commodity to deal with. Thundery summer weather could turn it sour. Large quantities of milk often went bad before it could be processed. The quality of the milk could vary from farm to farm and season to season. Attempts to manufacture a milk chocolate bar presented other problems. Early efforts were dry and crumbly, and all too often the milk went bad, making the bar rancid. Convinced he had a great product, Peter searched long and hard for a financial backer but without success. Henri Nestlé had retired, but the new directors of Nestlé would not support Peter. Nor did he partner with Anglo Swiss, the firm that produced condensed milk. Peter found himself utterly shut out by Swiss bankers who dismissed his product and its ingredients as too risky.

  He soldiered on, and after years of low-budget experiments, he finally mastered a technical process in 1886 that produced a temptingly soft and creamy milk chocolate bar. It was launched as Gala Peter and received immediate acclaim. When demand far exceeded supply, bankers finally began to pay attention. Everything came together for Peter in the early 1890s, when two Swiss businessmen, Albert Cuenod and L. Rapin, and a banker, Gabriel Montet, invested enough for him to create a new company, Société des Chocolats au Lait Peter, and scale up production.

  “I think I can say with a pretty high degree of certainty that the majority, if not all, of the Swiss chocolate makers, have tried to copy me,” Peter proudly told his new board. “All have had to give up!” The only product still in the running was a treacly milk chocolate paste, manufactured by the Anglo Swiss Condensed Milk Company, that was no match for the quality of Peter’s goods.

  With resources now dedicated to ramping up production and advertising, orders rushed in from across Europe. In the first six months of trading in 1895, Peter’s sales doubled to ten tons of chocolate. The business was such a success that he and his team decided to recapitalize the company at a million Swiss francs, and they opened a second factory, which doubled their production capacity. The milk chocolate that had been a novelty luxury fifteen years earlier was becoming widely available, and no export market had a sweeter tooth than Britain.

  British grocers took to Swiss chocolate as they had taken to Dutch cocoa: They could not get enough of it. But the English Quaker chocolate makers could not fathom how the product was made. It was a conjuring trick; no clues given. Those who had wrestled long to make this particular “food of the Gods” had no intention of disclosing the recipe.

  BERNE, SWITZERLAND

  Daniel Peter was not the only Swiss chocolatier whose secret was becoming legendary. When Rodolphe Lindt built his unique conching plant at his factory in Berne, he had ensured that only a few of his workers had the key to the door. As the years passed with no one able to top the quality of his chocolate, the mystique and intrigue surrounding his special process caught the public’s imagination. A German magazine, Gordian, published an article in 1899 inviting readers to guess Rodolphe Lindt’s special recipe. The magazine was inundated with letters. Did Lindt have a new type of grinding machine to crush his beans to a finer texture? Did he beat his chocolate mixture for longer? Could it be the addition of essential oils like peppermint? No one had the answer. Gordian’s editorial team pronounced their verdict: Lindt’s secret would never be known.

  But Rodolphe Lindt, the gentleman entrepreneur, was in a selling mood. His business partnership with another Berne confectioner, Jean Tobler, had fallen through. Lindt, now almost fifty, was approached with other offers. The Stollwercks in Germany offered as much as 3 million marks. But in 1899, Lindt opened the door of his conching plant to another Swiss manufacturer: Johann Rudolf Sprüngli of Zurich. Sprüngli had made a canny offer. Lindt would receive 1.5 million Swiss francs—a small fortune worth roughly 100 million Swiss francs today—and be a director in their new joint venture.

  Johann Rudolf Sprüngli, described in company literature as a shy man, was anything but reticent when it came to business decisions. Shortly after inheriting his share of the Sprüngli chocolate business from his father, he initiated a rapid expansion program that culminated in his moving the family firm from cramped headquarters in the old town of Zurich to a new, modern factory on the shores of Lake Zurich by the railway at Kilchberg. The following year he joined forces with Lindt. Their new company, Chocoladefabriken Lindt and Sprüngli, was a force to be reckoned with. For Rudolphe Lindt, it was a far cry from his inauspicious start in fire-damaged buildings in Berne. Together they were about to scale up the production of some of the most acclaimed chocolate in the world.

  YORK, BRISTOL, AND BIRMINGHAM, ENGLAND

  In Britain during the 1890s, cocoa changed from being a product that only a few could afford to a product that was on every household shopping list. Cocoa consumption more than doubled over the decade, from 20 million to 43 million pounds. But it was the continental chocolatiers with the miracle of chocolate fondant and milk chocolate that were poised to collect.

  The Quaker firms had established a clear lead over their English rivals. The Taylor Brothers and Dunn and Hewitt of London watched as their profits slid. There were newcomers, especially in confectionery. John Mackintosh of Halifax launched his toffee and confectionery business with a £50 loan, and it was worth £15,000 ten years later. Terry of York prospered at its Clementhorpe works on the River Ouse, producing a considerable range of chocolates and sweets alongside the company’s traditional candied fruits and peels. But during the 1890s, Fry, Cadbury, and Rowntree were the dominant players in cocoa and chocolate.

  By 1895, Fry had sales of £932,292. Cadbury was close behind with sales of £706,191, and now there was heady talk: How long before they caught up with Fry or even overtook them? Both firms were among Britain’s largest employers: Cadbury with 2,600, and Fry with over 4,000. After a prolonged struggle, Rowntree was at last making headway. Their sales of £190,328 in 1895 had more than tripled over ten years, and they were narrowing the gap between them and the two leading Quaker chocolate firms. The prodigious appetite for pastilles continued to grow and was complemented by the successful launch in 1893 of Rowntree’s clear fruit gums. But Joseph Rowntree knew his Cocoa Elect was struggling next to established brands of pure cocoa, and he had a huge investment underway in Haxby Road. As he made the transition from a family firm into a large-scale manufacturer, his personal notes reveal he watched the foreign competition anxiously.

  To take on the Europeans, Joseph Rowntree took the unusual step of approaching Joseph Storrs Fry II an
d the Cadbury brothers to discuss some form of collaboration. The English Quaker firms had much in common and were soon discussing policy on a number of issues. For example, at the time, shopkeepers could charge what they liked for a product, sometimes overpricing chocolate to increase their profits or underpricing to undercut a competitor. The Quaker firms wanted shops across the country to sell at the price that was printed on the label: Six pence on the packet meant shopkeepers had to sell at six pence. By uniting on such issues, the Quaker firms aimed to guarantee that distributors received good margins but that they could not go above them to the detriment of their companies’ chocolate sales.

  Their informal discussions on discounts and shop displays during 1895 ensured that a price war or a margin war did not break out between the English Quaker firms. In discussing pricing and advertising strategies, they hoped to fend off the European giants. But Dutch and Swiss sales were strong, and the fast-growing Nestlé Company was waiting in the wings: The battle lines were being drawn for Europe’s Chocolate War, with the unsuspecting British consumer the prize. The winners in this financial jeopardy would be those who could devise the most irresistible chocolate mouthfuls to woo and win the English palate. As the European chocolate firms lined up to do battle to produce ever more luscious concoctions of chocolate and cream, a newcomer appeared on a different continent with a plan for a chocolate enterprise that could dwarf the contest in Europe.