Chocolate Wars

by Deborah Cadbury

  BOURNVILLE, BIRMINGHAM, ENGLAND

  On the other side of the Atlantic, Hershey’s struggles were mirrored by those of twenty-six-year-old George Cadbury Jr. at Bournville. The Swiss, the Dutch, and even their old rival Fry had launched a milk chocolate bar, Fry’s Five Boys Milk Chocolate. The Rowntrees, in an attempt to cash in on Swiss success, launched a Swiss Milk Chocolate followed by their Alpine Milk Chocolate and Mountain Milk Chocolate. Although both Rowntree’s and Fry’s milk chocolate products were still based on milk powder and lacked the quality of the Swiss producers, it was surely only a matter of time before they caught up.

  The Cadburys had wrestled with the problem of milk chocolate for fifteen years and failed to find a breakthrough recipe. After a research trip to Switzerland, George Jr. had tried to release an improved milk chocolate bar in 1902 using condensed milk rather than powdered milk, but it fared no better than the previous attempts. Refusing to surrender the challenge, George and his team eventually stumbled on a discovery. They discovered a milk chocolate bar from Switzerland with a unique taste and texture: It was rich and creamy, like chocolate velvet. Tests confirmed that this bar—made on a small scale by the venerable Swiss family firm of Cailler—contained a higher percentage of milk mixed with the chocolate ingredients than Daniel Peter used to make his bars. For George Jr., it pointed the way forward.

  Each day, George Jr. drove his Lanchester to Bournville and walked up the steps to the modest room that passed as a chemists’ laboratory. The challenge seemed insurmountable: to create and mass-produce a bar that was even milkier and creamier than the competition. He was joined by Booth the chemist; a confectioner, Otto Unger; an engineer, Louis Barrow; and a foreman, Harry Palmer. He and his small team busied themselves measuring, titrating, and boiling the different mixtures. George was so caught up in the process that it is said that one night, sleepwalking and delirious, he “rose in the small hours and trundled his young wife, Edith, around the bedroom under the impression that she was a milk churn!”

  Late in 1904, an exhausted George Jr. and his team hit on the exact combination of temperature, pressure, and cooling to condense the milk in such a way that large volumes of milk could be mixed with the cocoa without spoiling. It was indeed a recipe that was creamier and sweeter than Peter’s chocolate; rich and very satisfying. Each half-pound bar contained a glass and a half of full-cream milk. George thought it good enough to take to the Cadbury board.

  Samples were duly handed around. The principal members of the board were George’s older brother, Edward, his cousins, Barrow and William, and his father, George Sr. In solemn silence the bite-sized chunks were chewed, pen and paper at the ready to note any flaws with exacting criticism if disappointed. The seriousness of the occasion was born of so many equally hopeful but abortive trials. Why should this be different? Slowly tongue and taste were wrapped around each other. Five gravely sober faces softened, then showed surprise and then excitement. Another small piece of chocolate confirmed what taste buds knew as tongues licked lips and fingers. This was like Swiss chocolate—no, better! This could be launched on the market with confidence.

  The date was set for 1905—the only question was volume. The Swiss were selling thirty tons of milk chocolate a week in Britain. Would the public prefer their product over the Swiss chocolate? The board was inclined to be cautious and suggested they create capacity for five tons of George Jr.’s new chocolate a week. Even this figure seemed optimistic, they reasoned, since it grossly exceeded consumption of any of their milk chocolate bars to date. George Jr. had a different plan. He wanted Bournville geared to twenty tons a week. His idea was to launch in a big way before other firms could copy them.

  After some debate, he won the backing of the board. Word of the new and wonderful chocolate spread around the company. The sales team decided to promote the milk content by calling the new bar Dairy Maid. Just six weeks before launch, there was a change of plan. According to the Bournville Works magazine, the winning idea came by chance from a Plymouth confectionery shop. The daughter of the shopowners happened to be enjoying a bar of Swiss milk chocolate just as a Cadbury salesman paid a visit. He could not resist telling her about the luxurious new milk chocolate they were bringing out “that will sweep the country—Cadbury’s Dairy Maid.” The young girl replied, “I wonder you don’t call it Dairy Milk; it’s a much daintier name.” Six weeks later she received a complimentary slab of milk chocolate with the name she had proposed emblazoned across the wrapping: Cadbury’s Dairy Milk.

  George Jr.’s milk chocolate bar finally rolled off the production lines in June 1905. Oddly, it was given hardly any advertising support and was presented in plain and cheap wrapping to keep the price down. Sales were slow and George’s estimate of twenty tons a week began to look reckless. The economy of the launch was not due to Quakerly frugality but a result of the company being stretched to the limit by their prolonged struggle with the Dutch over cocoa, the core of their business. Van Houten’s alkalized cocoa had cornered 50 percent of the market in Britain. Sales of Cadbury’s Cocoa Essence, their leading brand for thirty years, continued to fall in 1905.

  Without knowing Van Houten’s formula, George Jr. was once again required to come up with a solution—and fast. It wasn’t long before he brought a new taste before the board: Cadbury’s very own brand of alkalized cocoa. Once again the board agreed that the new cocoa had a good flavor. The sales teams, however, were baffled as to how to promote this new drink without undermining their old one. Cadbury’s name stood for pure, unadulterated food. If they promoted the superior taste and solubility of their alkalized cocoa, they risked drawing attention to weaknesses in Cocoa Essence. Refusing to hesitate, George Jr.’s new cocoa was launched at Christmas 1906. Packaged in colorful chocolate brown tins, its new name was boldly displayed on the side in large letters: Bournville Cocoa.

  In the space of one short year, George Jr. had launched the two creations that he hoped would save the company from the Swiss and Dutch onslaught: Dairy Milk and Bournville Cocoa. By this he would stand or fall. By this, the company might stand or fall. Like Hershey in America, all he could do was wait.

  VEVEY, SWITZERLAND

  As the Americans and the British strived to launch their own versions of Swiss milk chocolate, Swiss businessmen and bankers were already leaps ahead of them. The creator of milk chocolate, Daniel Peter, the man who had struggled with his invention for so many lonely years, found himself greatly in demand.

  Since 1896, Peter had not looked back. Investment in his company, Société des Chocolats au Lait Peter, increased rapidly. In the three years since 1900, Peter’s authorized capital rose from 1 million Swiss francs to 1.5 million, and his sales reached 6 million Swiss francs. In addition to his chocolate works at Vevey, Peter developed another plant to meet the rising demand for milk chocolate thirty miles northwest in Orbe.

  In January 1904, Daniel Peter was approached by another Swiss confectioner, Jean Jacques Kohler, who wanted to join forces. Although Kohler’s company was worth less than half of Peter’s, his chocolate products complemented Peter’s range, and he had strong sales teams in France and Switzerland. For sixty-eight-year-old Peter, it allowed him to step back from the front lines of the business, leaving the capable and likeable Kohler in charge. That same month the two firms merged to form Société Générale Suisse de Chocolat with authorized capital of 2.5 million Swiss francs.

  John Cadbury’s tea and cocoa shop in Bull Street, Birmingham—the start of the Cadbury chocolate business. From a drawing by E. Wallcousin, 1824.

  (COURTESY OF CADBURY)

  George Cadbury, age 25, taken in 1866 at a time when the family cocoa business was close to failure.

  (COURTESY OF THE CADBURY FAMILY)

  Richard Cadbury and his son, Barrow, in 1866.

  (COURTESY OF THE CADBURY FAMILY)

  The Cadbury’s Bridge Street factory in Birmingham in the mid-nineteenth century. (COURTESY OF CADBURY)

  Dixon Hadaway—Cadbu
ry’s first “traveller.”

  (COURTESY OF CADBURY)

  An advertisement for Fry’s cocoa. (COURTESY OF CADBURY)

  The Fry family of Bristol ran the largest chocolate factory in the world in the nineteenth century. (COURTESY OF CADBURY)

  The Cadbury brothers breakthrough product: a purer form of cocoa.

  (COURTESY OF CADBURY)

  Exterior photo of Cadbury’s Bournville, 1879. This is the first known photograph of the Bournville factory. (COURTESY OF CADBURY)

  In Switzerland, Rodolphe Lindt developed a new technique to grind the cocoa beans.

  (© CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG)

  A nineteenth-century chocolate conching machine, which made chocolate smooth and velvety. (MARY EVANS PICTURE LIBRARY)

  Henri Nestlé, circa 1875. Nestlé created milk powder and mass produced a new infant formula.

  (NESTLÉ HISTORICAL ARCHIVES, VEVEY)

  In the 1870s, Henri Nestlé’s neighbor, Daniel Peter, began experiments adding milk to chocolate at his factory in Vevey.

  (NESTLÉ HISTORICAL ARCHIVES, VEVEY)

  Milton Snavely Hershey, age 16, as an apprentice in an ice cream parlor in 1873.

  (COURTESY OF HERSHEY COMMUNITY ARCHIVES, HERSHEY, PA)

  Milton Hershey briefly attended a Quaker School House near Lancaster, Pennsylvania. (COURTESY OF HERSHEY COMMUNITY ARCHIVES, HERSHEY, PA)

  An early Easter egg advertisement.

  (COURTESY OF CADBURY)

  The village green at the Cadbury brothers model village at Bournville.

  (COURTESY OF CADBURY)

  Staff play croquet on the womens’ grounds at Bournville, 1896.

  (COURTESY OF CADBURY)

  Lily pond in the womens’ grounds. (COURTESY OF CADBURY)

  The girls’ dining room at Bournville, 1902. (COURTESY OF CADBURY)

  Horses and the first petrol vans at Bournville. (COURTESY OF CADBURY)

  Swimming lessons for staff at Bournville, 1910. (COURTESY OF CADBURY)

  King George greeted by George Cadbury, 1919. (COURTESY OF CADBURY)

  Vans leaving the factory. (COURTESY OF CADBURY)

  Bournville: the factory in the garden. (COURTESY OF CADBURY)

  Kraft cheesewagon, 1921.

  (KRAFT®, PHILADELPHIA®, VELVEETA® AND MIRACLE WHIP® ARE REGISTERED TRADEMARKS OF KF HOLDINGS AND ARE USED WITH PERMISSION.)

  By 1939, J. L. Kraft had 40 percent of America’s cheese market.

  (KRAFT®, PHILADELPHIA®, VELVEETA® AND MIRACLE WHIP® ARE REGISTERED TRADEMARKS OF KF HOLDINGS AND ARE USED WITH PERMISSION.)

  Milton and his wife, Catherine “Kitty” Hershey, 1910.

  (COURTESY OF HERSHEY COMMUNITY ARCHIVES, HERSHEY, PA)

  Milton Hershey used his fortune to create The Hershey Industrial School to help boys from deprived backgrounds.

  (COURTESY OF HERSHEY COMMUNITY ARCHIVES, HERSHEY, PA)

  Adrian and Dominic Cadbury, the fourth generation of brothers at the helm of the firm. (COURTESY OF THE CADBURY FAMILY)

  The Nestlé company kept a close eye on the deal. No sooner had Kohler and Peter completed their negotiations when they received a call from Auguste Roussy at Nestlé. Roussy had originally declined to help Peter develop his milk chocolate. Now Nestlé was hungry to get into the lucrative milk chocolate market and had plans to launch brands of its own.

  During the long summer of 1904, talks took place between Peter and Kohler and managers at Nestlé. The result was a collaboration that favored both sides. Nestlé invested a million Swiss francs with Peter and Kohler and agreed to hand over the manufacture of Nestlé’s own brands of chocolate to them. In return Société Générale Suisse de Chocolat was given access to Nestlé’s excess milk supplies and the company’s considerable expertise in sales and marketing and established position in foreign markets. Effectively the agreement meant that each company specialized in what it did best: Nestlé handled chocolate distribution and sales while Peter and Kohler concentrated on quality manufacturing.

  But when Nestlé’s deal with Peter and Kohler was announced, Nestlé’s main rival, the Anglo-Swiss Condensed Milk Company was spurred into action. Founded by two Americans, Charles and George Page, Anglo-Swiss had been Nestlé’s leading competitor for thirty years, and it also wanted to get in on the chocolate bonanza. When it failed to secure a deal with other Swiss chocolate firms, such as Suchard, it approached Nestlé. In 1905 the two companies merged to create a Swiss dynamo. The Nestlé and Anglo-Swiss Condensed Milk Company was a truly international food concern with American and European staff and expertise and eighteen factories worldwide, including five in Britain, twelve in Europe, and one in America.

  By skillfully combining their assets and talents, the Swiss had launched a food manufacturing superpower, which could already deliver milk chocolate to Europe and America and had plans to tap into Australia and Asia as well. While the Americans and the British had only recently discovered their recipes, the Swiss deals meant that consumers throughout the developed world would soon wake up to the delights of quality Swiss milk chocolate.

  HERSHEY, PENNSYLVANIA

  But even the sophisticated Swiss bankers, with their eyes fixed on the American market, had not bargained on the well-honed entrepreneurial skills of Milton Hershey. By 1906 the town of Hershey was on the map. On entering, the visitor was left in no doubt of that fact. The name proclaimed itself with confidence, writ large and bold and frequently. It shone from the towering factory chimneys and blazed above the main factory entrance, reminding anyone who passed through that determination over an indifferent fate by Milton Hershey had created a living fairy tale: A town that made chocolate.

  The sheer scale of his operation in America dwarfed the efforts by the Europeans. Apart from his milk chocolate Hershey Bar, he introduced conical chocolate drops called Hershey’s Kisses in 1907, followed swiftly by Hershey’s Almond Bar. With his leading rivals an ocean away and the voracious American appetite spreading from coast to coast, he had created a chocolate money machine. Net sales soared from $1.3 million in 1906 to more than $5 million by 1911.

  Thousands of visitors flocked to see Hershey’s miracle and to marvel at the astounding chocolate factory. The factory in a cornfield was not unlike Bournville but it was done on an American scale. Sightseers could enjoy a stroll down the wide boulevards and wander into the center of town, which boasted such novelties as landscaped gardens, a zoo, a miniature railroad, and a band. Shops sprang up along the main avenues, and there were carefully designed homes for the workers to buy or rent. All the while, Hershey continued to buy up thousands of acres near the town, which he turned into dairy farms to supply the factory. The entire region prospered.

  At the very heart of this chocolate utopia was Hershey’s palatial home, High Point. Approached across a green carpet of lawn, its many wings framed by woodland and a view of the Blue Mountains beyond, it was the embodiment of material success. With its white-pillared porch reminiscent of ancient temples, fine interiors, and echoing halls, the house was so opulent that it could not have been further from the plain homestead of Milton’s youth. Hershey’s mother, a Mennonite, gave her full approval to her successful son. She had her own large house on Chocolate Avenue, and her financial troubles were over. Known as “Mother Hershey” or sometimes “the Queen mum,” she enjoyed a respect in the community that she prized after many long years of struggle. Not content to wallow in her newfound comfort, she combed her grey hair into a starched cap, donned her apron, and continued to wrap sweets for her son as she had always done. Their new wealth and the company’s potential seemed limitless.

  But no amount of money could solve one very personal problem. After ten years of marriage, it was clear that Milton Hershey’s beautiful wife, thirty-eight-year-old Kitty, who had long suffered from ill health, was not able to have children. There would be no son, no heir for his wealth. Hershey felt the loss deeply. “It’s a sin for a man to die rich,” he told his friends. He found it hard to accept
the doctor’s verdict that there was no cure for her nervous disorder. Kitty hid the growing signs of her weakness and paralysis to spare him pain, and all he could do was watch as his beautiful wife—decorated with any jewel she wished from Tiffany—deteriorated to the point that she needed a wheelchair.

  She began to talk of a new venture, a venture that promised a future: a special orphanage for deprived children. Hershey seized on the idea; it was something they could create together. For both of them, it became a lifeline. They could give something real and useful to those in need. There would be children about the place with their innocence and their fresh way of seeing things. And the orphans would want for nothing that it was possible for Hershey to provide. They would have all the things he had not as a child. In November 1909, Kitty and Milton Hershey signed a deed of trust endowing their orphan school with 486 acres of farmland. According to a close relative, Joseph Snavely, they wanted to make themselves “literally parents to a family of orphan boys.”

  It was a proud moment when the first ten boys enrolled at the Hershey Industrial School. The teaching was informal at first, with the boys gathered around one large table to learn crafts and skills, but they soon graduated to a converted barn. The children stayed at the local farms, but Milton Hershey made a point to visit every Sunday.