Chocolate Wars

by Deborah Cadbury

  But it wasn’t plain sailing. “Grandfather was absolutely right about Fry,” says Adrian. “We hampered ourselves with Fry.” Cadbury dominated the chocolate and assortment market to such an extent that Fry could make no headway. “We were stuck with the Fry sales force. What were they going to do?” recalls Adrian. The board decided that Fry must challenge Mars’s lead in the new area of countlines. “But they were the weaker sales force and the weaker brand. So the area where we should have been growing, we had in fact handicapped ourselves by feeling that we had to look after Fry.”

  And soon there was another worry. Rowntree began promoting Aero in a way that challenged Dairy Milk head on. Aero, they claimed, “digests twice as fast as old-fashioned milk chocolate.” Technical drawings appeared to show the rough texture of ordinary milk chocolate compared to the smoothness of Aero. Rowntree decided to seek a patent for its production process. Cadbury mounted a legal challenge, arguing that some of the processes involved were already in use at Bournville.

  As both Cadbury and Rowntree directors hurried to meetings with lawyers, the two Quaker firms appeared to have reached an impasse. Quaker solidarity and allegiances shared over a century evaporated in the face of the intense struggle to win market share.

  Seebohm Rowntree, perhaps uncomfortable with the strained situation, chose this time to retire from the board. Cadbury found a common interest with Nestlé, which was also losing customers to Rowntree’s Aero. Warily, the two rival firms of Nestlé and Cadbury began to liaise over legal challenges to Rowntree’s patent for Aero.

  News of this collaboration reached the Rowntree board on April 20, 1937. The possibility that the dispute could be settled before the Society of Friends was briefly considered. This was, after all, how Quaker firms had resolved their differences in the past. But such a meeting never happened because the Society of Friends had ceased to be a relevant or enforceable forum for modern business negotiations. All parties resorted to lawyers, and it was late summer before an agreement was reached on patents and promotions that required Rowntree to back down.

  Under the cutthroat conditions of an increasingly saturated market, the moderating Quaker influence declined. In York the Quaker voice diminished in the Rowntree boardroom as independent managers replaced family directors who left or retired. At Bournville, the Cadbury cousins found themselves straddling a widening gulf between business pressures and religious values.

  George Cadbury Sr. had pointed to a way forward when he created the Bournville Village Trust, and many of his and Richard Cadbury’s children built on his legacy. As Quakers they did not wish to accumulate large personal fortunes; instead, they created trusts or made gifts on a formidable scale. Due to the Quaker influence, wealth from the chocolate works was effectively diverted into the community and wider society.

  Barrow Cadbury, Richard’s oldest son, gave away much of his inheritance. He fulfilled his father’s ambition of creating an institute for the local Adult Schools in Moseley Road. Barrow and his wife, Geraldine, were local magistrates, and they set up a Children’s Court and Remand Home to help young offenders. In the 1920s, they used their shares in Bournville to establish two large charitable trusts. Apart from contributing to religious causes, they particularly wanted these trusts to help missionaries, charity workers, and those who had spent their lives helping others. Barrow and Geraldine also gave several former Cadbury houses to the community, such as the home for sick children at Cropwood and the Copeley Hill Hostel for young adults.

  Barrow’s brother, William, and his cousins Edward and George Jr. continued this tradition by setting up large benevolent trusts. Edward and George Jr. also donated sizeable chunks of land: two hundred acres on the Lickey Hills near Bournville went to the City of Birmingham and four hundred acres with the Chadwich Manor Estate, near Bromsgrove in Worcestershire, went to the National Trust. They gave buildings and funds to Birmingham University and the Queen Elizabeth Hospital Centre at Edgbaston. George Jr., with his love of horticulture, endowed an agricultural college at Offenham, near Evesham.

  For some family members, the desire to give up material possessions went to extremes. Richard’s youngest daughter, Beatrice, a missionary who inherited a considerable shareholding in Bournville, saw it as her duty to “mitigate the acute suffering caused by the capitalist order of society.” She and her Dutch husband, Cornelius Boeke, felt they should give away everything. And they tried to live with no money. When Barrow visited his sister and her eight children, he was shocked to find them living in tents. He insisted on setting up a trust to provide a modest home in Bilthoven for the young family.

  The “capitalist order” that Beatrice questioned was bringing a stunning array of luxuries to the consumer. In Britain by the late 1930s, chocolate was no longer a rare indulgence but a routine purchase. Almost everyone was eating chocolate, compared to just 3 percent of the population in 1900. Cadbury’s Dairy Milk at two ounces for two pence was the most popular chocolate bar by a large margin. Beatrice’s brothers and cousins were riding the wave of mass production and worldwide distribution. Their factories in Tasmania, Canada, and New Zealand were beginning to bring chocolate to the Commonwealth. Bournville, at the hub of it all, the largest and most modern chocolate works in the world, was nominated by a British newspaper as one of the Seven Wonders of Britain.

  The Cadbury cousins, however, were not alone in their global vision. Forrest Mars, fast rising to become Britain’s third largest confectioner, had devised a cunning scheme to challenge Hershey in America. It took the outbreak of the Second World War to spur him into action. In August 1939, the British government implemented plans to tax all resident foreigners. Forrest Mars left England that same month.

  Forrest did not use his father’s factory in Chicago as his spring-board. He knew that since his father’s death, it was being run by his stepmother, Ethel, and his half sister, Patricia. In arguably his cheekiest move yet, he went directly to his rival in Pennsylvania. Forrest Mars was obsessively secretive, but journalist Joël Glenn Brenner revealed the deal he struck in The Emperors of Chocolate: Inside the Secret World of Hershey and Mars. Forrest Mars turned up at Hershey and demanded to see the president of the company, William Murrie. Forrest Mars had a canny proposition: If the Hershey Company would supply the chocolate for his next venture, he in return would employ William Murrie’s son, Bruce, as vice president of his new company. As for the product, he had a plan allegedly inspired by a candy he had seen in Spain in the 1930s: chocolate drops coated in a brightly colored sugary shell.

  The deal was sweet enough for William and Bruce Murrie. As a symbol of the collaboration with Forrest Mars, they decided to call the new candies M&M—for Murrie and Mars. And so it was that Forrest Mars launched his assault on the American market from a warehouse in Newark, New Jersey—without the support of his own family—but with the support of his leading rival: Hershey.

  CHAPTER 17

  I Pray for Snickers

  BOURNVILLE, BIRMINGHAM, ENGLAND

  August 1939: With daily news reports suggesting that war was imminent, the Bournville and Somerdale chocolate works, gleaming showcases of mass manufacture, were examined as potential sites to make munitions. Somerdale, gutted of its new chocolate technology, was hastily converted for use by the Bristol Aeroplane Company. At Bournville, firms that could meet military needs like Lucas and Austin moved in. Gone were the lines of rosy girls in virginal white tending to the nation’s sweet tooth, replaced by the gun-metal colors of war. May 1940 brought a massive German offensive and the fall of Holland, Luxembourg, and France. With the looming prospect that Britain would be invaded after the crisis at Dunkirk, a large area of the chocolate works became Bournville Utilities. Laurence, often working through the night and not stopping for air raids, took charge of manufacturing war materials for the Ministry of Supply.

  The chocolate factory was unrecognizable. One young boy, ten years old when the war started, was struck by the difference. “It was a weird place,” recalls Adr
ian Cadbury. “It was covered in green netting and there were workers on the roof scouting for enemy aircraft. . . . Inside it was strange because parts of it were exactly as they had been and others transformed.” The Chocolate Molding Department made gun doors for Spitfires and cases for aeroplane flares. The Chocolate Packing Department created gas masks. The Metals Department produced aircraft parts. Elsewhere millions of jerricans, gas tanks for Spitfires and Lancasters, and gun mounts were in production. “Q block became Q metals run by Lucas,” Adrian recalls. “My older brother went in there.” To his immense frustration he was not yet permitted to join his fourteen-year-old brother, Julian, who was working on the production line. He had to stay at home with his young sisters, Veronica and Anthea, and the new arrival, a baby brother named Dominic.

  The Cadbury family was soon split up by war. Adrian’s sisters and baby Dominic were evacuated to Canada. When the Germans invaded Russia in June 1941, Laurence was asked by the Minister of Economic Warfare to fly to Moscow. His task: to lead a British mission to find out what materials the Russians needed and to work with the British Ambassador, Sir Stafford Cripps, towards an Anglo-Soviet pact. Adrian followed his father’s progress in the letters he sent home. “For the signing ceremony we went along again in a procession of cars to the Kremlin,” wrote Laurence. “As usual we all shook hands with Uncle Joe [Stalin]. . . . He smoked an occasional cigarette and if it went out before he had finished it, economically lit it again. All Russian cigarettes have a piece of cardboard tube, and as Russians do, he kinked the tube to make it act as a bit of a filter.”

  Back in Bournville, Adrian’s uncle, Edward, was running a much-reduced chocolate works. Initially there were large government orders to meet for the army, navy, and air force. But as milk supplies came under government control and imports of cocoa and sugar were threatened, core lines could no longer be made. To eke out precious sugar supplies, Economy Red Label Drinking Chocolate with added saccharin was introduced in July 1940 in plain grey wrapping. In place of Dairy Milk came Ration Chocolate in 1941, a dull and dreary substitute formed with dried skim-milk powder. With state control over rations and supplies and also the movement of foodstuff within transport zones, the chocolate works struggled. The confectionery ration per person per week was gradually reduced to two ounces. Every resource possible was diverted to the war effort. Bournville’s recreation fields were dug up to grow vegetables. Sheep grazed on the village green. Older workers at Bournville formed their own Home Guard unit.

  At the manor house, Adrian’s grandmother, Elsie, turned the farm into a training camp for the Friends Ambulance Unit. A slightly formidable presence, her eyesight failing, she would not leave the manor even when bombs fell nearby and windows were shattered. She and her companion, Elsa Fox, both dressed in hat and garb reminiscent of an earlier age, dedicated their remaining time to the charities that she and George Sr. had valued: the National Peace Council, the YMCA, the World Congress of Faiths, and countless others. Elsie had been awarded the honor of Dame Commander of the British Empire in recognition of her years of service. One night in November 1940, the home for cripples just over the road at Woodlands was struck directly. A wing of the hospital was obliterated, two staff members were killed, and more than thirty children had to be transferred. Even at eight-two, Dame Elizabeth—as she was formally known—threw her energy into rapidly restoring a normal routine for the remaining 140 patients.

  Adrian, hankering after a “proper job” at Bournville, was finally permitted to join his older brother. “My first job was a post boy. I must have been thirteen . . . and my last job with Julian was to do the blackout in the chemist’s department. The blinds were huge and there were curtains to put in place before we left for the day.” As the military operation expanded in 1941, Adrian remembers huts were hastily assembled by the canal where workers packed explosives into anti-aircraft rockets.

  The war reshaped the chocolate business, randomly creating winners and losers depending on accidents of geography or birth. One winner was Forrest Mars.

  From his factory in Newark, New Jersey, Mars was uniquely placed to benefit under the nurturing wing of his rival, Milton Hershey. William Murrie did all he could to help his son, Bruce, and Forrest secure a foothold in the market. When M&Ms were launched in 1940, many firms faced shortages of cocoa and sugar, but William Murrie made sure that his son was never short of chocolate.

  Despite this support, sales of M&Ms were slow to take off, and Forrest could not restrain his volatile bad temper. According to Fortune in 1967, just the sight of an ill-wrapped candy bar could provoke outrage. Once he became so incensed that staff watched in astonishment as “Mars hurled candy bars one by one against the glass panel in the board room.” The Washington Post reported, “He would abruptly sack any worker who failed to meet his exacting standards.” No one was spared the explosive tirades, not even his partner, Bruce.

  Forrest Mars finally had a chance to meet Milton Hershey, now a frail old man in his eighties, who was perhaps touched to recognize a fleeting image of himself in the enthusiastic entrepreneur. “It is strange how some ideas stay with you,” Forrest told Don Gussow in an interview in 1966. “I remember how Milton Hershey admonished me: ‘Don’t ever go public!’” Forrest took the sober warning from America’s chocolate king to heart.

  Nestlé also scaled up their American enterprise during the Second World War. The versatile Swiss, equipped with lessons from the Great War, made a radical decision when war broke out. The management team was simply divided in half: Senior staff, including the company chairman, Edouard Muller, moved to offices in Stamford, Connecticut, to expand operations in North and South America. The other half stayed at Nestlé’s headquarters in Vevey to run European operations as best they could as the horror of war approached the Swiss border.

  The Nestlé staff in Vevey struggled with an extraordinary set of circumstances. Nestlé’s Tempelhof works in Berlin fell within the borders of the Third Reich. Nestlé’s premises at Lisieux, France, were bombed. They were shut out of their most profitable European market in Britain. Europe belonged to Hitler. Strategies were changed over night as armies were moved like chessmen. Produce was requisitioned; food was in short supply. How different were the fortunes of the Nestlé group in America. They thrived thanks to a remarkable reaction to a very novel product: Nescafé. Instant coffee was such an instant success that by the end of 1940, 6,000 cases a month were being sold in fifty-three of America’s largest cities.

  DECEMBER 7, 1941

  The war reached a new crisis. Japanese bombers sunk or damaged eighteen American warships in Pearl Harbor. The next day America joined the war—an event Milton Hershey had long anticipated. As young men left Derry Township to enlist, Hershey and Murrie stepped up production of a unique kind of chocolate bar called Field Ration D. Crammed with vitamins, the Ration D bar could be drenched with tropical rain and remain dry; it could bake in the sun and not melt. Other types of specially adapted chocolate soon followed, such as Ration K chocolate. With one billion bars supplied to the troops over four years, it is hardly surprising that Hershey’s profits nearly doubled during the war, reaching $80 million in 1944.

  Milton Hershey was once again at the heart of this chocolate bonanza—but his time was running out. His heart was weakening, and his days were increasingly confined to two rooms he had kept for himself at High Point, surrounded by photographs of Kitty. He still enjoyed experimenting with new products, and his staff was baffled by some of his more eccentric ideas: a sweet potato fudge, a soap with medicinal properties, a nondairy ice cream. His nurses found him quixotic and playful. Harkening back to his Cuban days, he might dress up smartly, mask his grey hair and wrinkles with sunglasses and hat, and have a flutter on the racetrack or in the casinos. With the carelessness of someone who no longer considered the outcome, he ignored doctor’s instructions on drink and rich food and enjoyed champagne whenever he was in the mood.

  He still delighted in visiting the Hershey Industrial Sc
hool, which had expanded rapidly and was home to over a thousand boys who lived in surrounding farms and homes. Many had been rescued from extremes of poverty and hardship and felt deep gratitude to Milton Hershey. On one occasion when he attended the school assembly, he rose to speak. The room erupted in clapping and cheering. Hershey was overcome, and tears rolled down his cheeks. The man of few words could not speak at all: He simply waved his exit.

  When eighty-eight-year-old Milton Hershey died in October 1945, 10,000 people passed by his open casket, mourning the loss of a “fairy god-father.” Inspired by the Quakers and other philanthropists, he had given away most of his wealth and had earned legendary status in America. Eight graduates of the Hershey Industrial School served as pallbearers in a procession that stretched almost a mile to the Hershey cemetery. Everyone in town wanted to pay their respects as his casket was taken to the vault where he was reunited with his beloved wife. “When we thank God for his life,” said the Reverend John Treder in the eulogy, “it will be for the vision it held of a better life for other men.” For most there was a certainty that his utopian dream would survive and “his spirit would live on.”

  The loss of such a giant among the superheroes of the industrial age in America left a vacuum. And there were plenty whose sights were set on filling that void—no matter what it took.

  At Bournville in the final months of the war, an exhausted seventy-one-year-old Edward Cadbury stepped down as chairman and handed the reins to his younger brother Laurence, the fifth family member to assume the role. Laurence’s family, now reunited, welcomed another new arrival, Jocelyn, born in 1946.