Speaking at a press conference shortly after Cadbury published its defence document to Kraft’s latest £10.1bn bid, Cadbury chief executive Todd Stitzer re-iterated that an “independent Cadbury can and will drive a higher value” following the company’s transformation in 2002. Confectioners Hershey and Ferrero have also both expressed an interest in bidding for the firm.
Clifton, chairman of Interbrand, says the deal would be more suited to the US market, which would not be in the best interests of Cadbury.
“Cadbury has made great strides in spreading its brand values across the world, including emerging nations. They makes it stand out from the crowd in the confectionery market, and Kraft would have a hard time convincing shareholders it could match that value.”
The chocolate manufacturer has set out upgraded targets for the next four years, which include organic revenue growth of 5-7% per year, and an increase in marketing investment of 10-12% based on annual sales. Stitzer says the growth is possible because consumers have related to the brand on a deeper brand value-led level.
Zoe Lazarus, director of Lowe Counsel London, says Stitzer’s confidence is accurate. “It is the value-led culture that has made Cadbury appealing in the first place. Its transformation has seen it become almost a challenger brand, and it has really related to consumers because of this. I’m not sure Kraft or Hershey have that appeal and would struggle to convince investors otherwise.”
Shareholders have until 5 January 2010 to respond to the offer. Kraft says they would be taking a risk if they support Cadbury’s independence.