Mondelez: Looking sweet after allsorts of bust-ups
US giant Kraft met with powerful resistance when it took over Cadbury. Now, as Mondelez, it is winning over the critics and its factory in Sheffield is making Oreo cookies
Friday 10 May 2013
Ask a taxi driver at Sheffield station to take you to the Mondelez factory and you will be met with a blank stare. Try Kraft, still nothing. OK, ask for Cadbury – the name will barely register. The giant sweet factory close to Hillsborough has been making jellies and gums since 1842 and is only ever known as Bassetts.
The white overall-wearing sweetmakers lined up on the factory floor, closely watching for a misshapen jelly baby or a malformed peppermint, can reel off the many name changes and takeovers in its long history.
But the one that really made the public gasp was when United States giant Kraft, from which Mondelez was spun off, bought Cadbury in a controversial £11.7bn takeover three years ago.
At the time the sweet deal for Kraft left a bitter taste in the mouths of the British public and MPs after promises to keep a factory open near Bristol were broken. Lord Mandelson and business secretary Vince Cable waded in to the public battle.
But today local MPs Nick Clegg and David Blunkett will don hairnets and overalls to celebrate the fact the sweet factory in Sheffield has expanded into biscuits. Oreo cookies, the chocolate and cream biscuits synonymous with the US, will be made in England for the first time.
This is Bertie Bassett meets the biggest biscuit brand in the world – the all-American cookie.
Bertie's factory has been given a £6m makeover and a warehouse has been converted into a state-of-the-art production line to make the cookies destined for the UK, Ireland and Europe.
Since launching in 2008 in the UK, Brits now munch their way through £22m worth, a growing part of the £1.3bn brand that launched in New York in 1912. The biscuit boom has meant the Oreo is made in 22 bakeries around the world and Mondelez has decided it will be more cost effective to make them here than ship them in.
Welcoming Mr Clegg and Mr Blunkett will be Mondelez UK and Ireland president Maurizio Brusadelli and factory boss Ian Dearn. It will be a far cry from three years ago when MPs were less than impressed when chief executive Irene Rosenfeld refused to attend a Parliamentary Select Committee following the hostile takeover.
Since then Mondelez has faced union protests and rumours that Kraft has changed the recipe of the famous Dairy Milk bar. Mr Brusadelli is adamant there have been no changes: "It is the jewel. Would you touch the jewel that is doing so well? Of course we would not do something so stupid as change it."
The recipe for the chocolate might be the same, but Mr Brusadelli has a big job running the UK arm. Since the split of Mondelez from Kraft Foods last year the UK has become a whole lot more important. With the American cheese and grocery business sliced off, the global snack business's second-biggest market is now here in the UK.
Mondelez's biggest growth markets will remain the emerging markets but what happens in the UK "is very relevant for the company," said Mr Brusadelli.
Critics have been waiting for further evidence that the company will close factories for cheaper alternatives in Europe. Around 200 job losses last year at its Bournville site fuelled further criticism but Mr Brusadelli said: "We must be efficient and effective but we also want to reduce the social impact. We employ 7,000 people in the UK and we have tried to limit the impact to people."
He said they were "lucky that there were people close to retirement at Bournville", so many of the voluntary redundancies were through early retirement. But he insisted: "We need to remain attractive and competitive on a global scale."
Mondelez's decision to move its European headquarters to Zurich in Switzerland led to another public outcry, this time over tax.
But Mr Brusadelli leapt to his company's defence again: "We follow the rules. We pay US corporation tax as we are an American company but we have made large investments in the UK and of course all our employees pay tax here. We follow all the rules of what taxes we should pay."
There are many critics of big corporations but for the 400 or so people in Sheffield news of the takeover was swallowed as readily as the jelly babies they produce.
Mr Dearn said: "The people here actually welcomed it." Sweets that were produced by small Yorkshire families have been gobbled up by ever bigger rivals over the years.
Maynards, Lion Confectionery, Bassetts, then Cadbury Schweppes and Cadbury Trebor Bassett; Mondelez is just the latest name above the door in a near-200-year history.
Mondelez can't employ the thousands that once worked in the confectionery industry when much was done by hand.
Run the numbers and the 400 manufacturing jobs that went in Bristol plus the 200 voluntary redundancies at Bournville versus 170 new research and development experts and sales staff is not appetising reading.
But the jobs it offers are perhaps a little less monotonous than the factory work of the past. New robots to package sweets means less work for people but in Sheffield Mr Dearn argues this is for the better: "Now the jobs here are less repetitive and there is less heavy lifting." The plant in Sheffield is 24 hours a day, 7 days a week, and the long shifts can at least be broken up by a mix in work.
One month a worker might be checking for rejects on the production line making the pink and yellow coconut rolls in the liquorice building, the next they might be monitoring the ovens in the jelly babies section.
Mondelez is keen to highlight the level of job promotions it makes and it is running an apprenticeship scheme.
The factory produces 40,000 tonnes of sweets destined for the UK and Ireland as well as Europe, including 12 million jellies, 7.5 million mints and 3 million liquorice pieces.
Cadbury had not invested in the liquorice floor since 1990 but this week the production line will be whirring to the sound of £550,000 of new machinery while around £2.5m has been squeezed into improvements in the jellies production line.
Add this to the £6m biscuit factory, which will also produce some runs of its "breakfast" biscuit Belvita, and the Sheffield plant takes this as a reassurance that jobs are here to stay.
Those working on the new biscuit lines even got the chance to visit other Mondelez factories in Spain and France for training.
Even Vince Cable sounds more convinced now. In September 2010 he said the takeover was "a classic example where short-term speculative activity is causing real economic damage".
But last year he was quoted as saying: "When you look now at what has happened, Kraft has brought sophisticated research and development into Cadbury's Bournville operation." While Mr Blunkett is even keener and said: “Whatever the controversy about the takeover by Kraft, the current investment and commitment to apprenticeships is extremely welcome. So much so that I have been prepared to welcome the Deputy Prime Minister to my constituency to celebrate the new product lines!”
Mondelez this month launched a new biscuit brand to the UK – Barny – a sponge biscuit that was first launched in France 14 years ago.
If Brits get a taste for the bear-shaped snack like we have with Oreos, then Bertie Bassett's biscuit factory might have to make some room for Barny too.
Food fight: Takeover rows, then a split
In a hard-fought takeover that saw Lord Mandelson call for UK takeover rules to be overhauled, the US giant Kraft - whose chief executive Irene Rosenfeld sparked anger by snubbing a parliamentary select committee hearing on the £11.7bn deal – gained control of the Cadbury brand in 2010. After buying up some of the UK's best-loved names, the group then decided to split in two.
In October last year Kraft Foods chopped off its snack foods business and created the bizarre-sounding Mondelez International. The rebranding was not an expensive marketing wheeze – two employees came up with the name, pronounced Mon-duh-leez, with Monde from the Latin word for "world" and Delez as a "fanciful expression of delicious".
Now Kraft Foods is a separate listed US group, owning brands from Kraft American cheese to Jell-O.
However, the financial results of Mondelez since the split have been less than satisfactory, with results this week showing net income at $568m (£366m) during the quarter to April, down 30 per cent from the same period last year.
- 1 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
- 2 PornHub turns masturbation into energy in bid to save the planet
- 3 Robert Mugabe eats a zoo for 'obscene' 91st birthday party
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 The jihadi girls who went to Syria weren't just radicalised by Isis — they were groomed
End of the licence fee: BBC to back radical overhaul of how Corporation is funded
Stephen Hawking's wife Jane Wilde on their marriage breakdown: 'The family were left behind'
Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
PornHub turns masturbation into energy in bid to save the planet
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...