An unexpected bitter taste

Some see it as plain bad luck. Others blame wide-eyed naivety. And a few point to the pressures of cultural transformation in a rapidly globalising world. But there is little doubt that the recent embarrassing mishaps that have befallen Cadbury Schweppes have left the company looking accident prone and out of touch.

As Cadbury Schweppes looks to separate its confectionery and Americas Beverages businesses and faces a potential break up by investors, observers are wondering if there is a common thread connecting its recent run of misfortunes.

The latest calamity struck last week when the Advertising Standards Authority (ASA) banned Cadbury Trebor Bassett’s cinema and television commercials for Trident chewing gum, saying they contained offensive racist stereotypes (MW last week). The campaign, created by JWT, is part of Cadbury’s most significant UK launch this year, challenging the dominance of chewing gum market-leader Wrigley’s, which has more than 90% share. So the stakes could not be higher.

Cadbury wanted the campaign to portray a "revolution" in the market, so it used a performer of dub poetry proclaiming a revolution in the taste of gum. Two of the ads showed a black man speaking in rhyme with a strong Caribbean accent, and shouting the catchline "Mastication for the nation". Other ads showed white people rhyming in similar Caribbean accents.

The ASA received more than 500 complaints from viewers. The watchdog ruled that the commercials had caused "deep offence", presented a "humiliating and negative depiction of black or Caribbean people" and should not be shown again. Even though the company’s own research showed that one in five black people would find the campaign offensive, Cadbury screened the ads. One complainant commented/ "It is as if they are laughing at black people who campaign for equal rights"".

High moral stance
One observer says such responses are "deeply embarrassing" for Cadbury, which constantly harks on about the importance of its high moral stance, Quaker roots and Christian values. It claims in its social and environmental report that it is "living our values, yesterday, today, tomorrow". It would be inconceivable that the company set out to offend or was conscious that it was promoting offensive racist stereotypes. But the Trident ads seem out of touch and clumsy, given the sensitivities surrounding issues of race in Britain.

A spokeswoman claims that despite the poor reception of the ads, life has been breathed into the chewing gum market since Trident’s launch in February and the brand has taken a 15% volume share across all channels. ""The category has been declining by 4-5% over the past 24 months, and in the last six weeks it has grown at a rate of 12-13%,"" she says.

The Trident launch has attempted to inject some personality and warmth into the category. The launch was led by Cadbury Trebor Bassett’s marketing director Phil Rumbol, who joined the company a year ago from Inbev where he managed Stella Artois. It is understood that he was personally enthusiastic about the "Mastication for the nation" line.

By comparison, Wrigley’s ads are somewhat cold, often produced overseas and have little resonance for younger UK consumers. In fact, the last time Wrigley did an edgy ad – showing a man with bad breath vomiting on a dog – it became the most complained about ad until that date and was banned by the ASA.

Now it is Cadbury’s turn to reinvent its gum marketing strategy following an adverse ASA ruling. But the company’s spokeswoman says she cannot confirm how the ruling will affect other elements of the campaign and whether it will continue to use the same catchline. She refuses to confirm whether the company will maintain its relationship with JWT.

The Trident fiasco comes on the heels of another outrage in the US caused by a sales promotion campaign for its soft drink brand Dr Pepper that went wrong (see box). Before that, there was the problem of the Cadbury Easter Eggs distributed without proper allergy advice. The company was also hit by a fraud crisis in Nigeria last year. These problems followed dozens of people being hospitalised after eating salmonella-infected Cadbury chocolate. And of course, there was the deeply humiliating Get Active promotion, axed in 2003, which was criticised for promoting obesity under the guise of encouraging health.

marketing misadventures One industry source says some of these misadventures, certainly on the marketing side, spring from the the company’s innocence. "They genuinely believe they are a decent corporation, but I don’t think they are attuned to the cynicism that exists in the outside world," he says.

The Get Active campaign, for instance, was an honest attempt to address the obesity crisis. "It really shook them when it went wrong, they didn’t expect it", adds the source. "They look at the world in a very positive and giving light. Sometimes they don’t look at things through the steely eyes of the pressure group or the consumer."

Another observer thinks that some problems have arisen from structural changes within Cadbury as it seeks to adapt its traditional, decent British culture to the needs of a global corporation. "The world is changing, the old Cadbury is giving way to a more American-style, centralised corporate driven culture," he says. "The old marketing department was based in Bournville and it was in touch with its caring Quaker roots, but it has become less Cadbury and more American."

Chief executive Todd Stitzer, who in 2003 became the first American to run the business, has been busy pursuing a strategy of low-cost growth and innovation. There has been a root and branch re-organisation and deep cost cutting. The workforce of 55,000 is being cut by 10% and the company has had to integrate US gum-maker Adams, which it bought in 2002. Problems have arisen at regular intervals under his tenure, but the company seems to have made a hamfisted job of dealing with the crises.

The spokeswoman says: "Unfortunate things happen from time to time. You get over them and move on." She points to a long list of recent successes, with an acclaimed campaign for Crème Eggs, bringing back the Flake girl, the successful launch of Cadbury Melts (although this was delayed after the salmonella crisis) and the impending launch of Bournville Deeply Dark.

It has been pointed out that US confectionery rival Mars has far fewer high-profile mishaps, but this may be down to its strict command and control structure. As Cadbury promotes a more creative and decentralised culture, there is greater leeway for mistakes.

Cadbury Schweppes is in the middle of re-inventing itself. Observers will be watching with fascination to see how the company’s culture develops in future and whether its successes will outshine its failures.v

Cadbury blunders

1. March 2007
Trident Gum ads are banned by the Advertising Standards Authority after 519 complaints.

2. February 2007
A sales promotion for soft drink Dr Pepper in the US goes disastrously wrong. A series of clues lead treasure hunters seeking a £760,000 prize to a graveyard in Boston containing the remains of historic American figures such as Samuel Adams. The managers of the graveyard – where Cadbury has buried the winning gold coin – complain and a national outcry ensues. Cadbury admits to "poor judgement" but says none of the graves was damaged.

3. February 2007
Cadbury recalls thousands of Easter eggs which were distributed without nut allergy warnings. It is criticised for sending retailers stickers to place on the packaging rather than recalling all the eggs.

4. November 2006
Cadbury Schweppes discovers accounting irregularities at Cadbury Nigeria. It forces the company to make £38m in provisions.

5. June 2006
Cadbury recalls 1 million bars after salmonella contamination. The company is accused of a cover-up after failing to notify the authorities months after it knew about the problem. It still faces prosecution.

6. 2003
Cadbury’s axes its Get Active scheme which encourages people to collect chocolate wrappers to exchange for sports equipment. The company is criticised for promoting obesity after it is found that over 5,000 wrappers would be needed to obtain one football net.