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Cadbury is a leading global confectionery company with an outstanding portfolio of chocolate, gum and candy

brands. We employ around 50,000 people and have direct operations in over 60 countries, selling our products in
almost every country around the world.
In India, Cadbury began its operations in 1948 by importing chocolates. After 60 years of existence, it today has
five company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi
(Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and Chennai). The corporate office is in

Our core purpose "creating brands people love" captures the spirit of what we are trying to achieve as a business.
We collaborate and work as teams to convert products into brands. Simply put, we spread happiness!

Currently Cadbury India operates in four categories viz. Chocolate Confectionery, Milk Food Drinks, Candy and
Gum category. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over
the years. Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, Éclairs and Celebrations. Cadbury enjoys
a value market share of over 70% - the highest Cadbury brand share in the world! Our flagship brand Cadbury
Dairy Milk is considered the "gold standard" for chocolates in India. The pure taste of CDM defines the chocolate
taste for the Indian consumer.

In the Milk Food drinks segment our main product is Bournvita - the leading Malted Food Drink (MFD) in the
country. Similarly in the medicated candy category Halls is the undisputed leader. We recently entered the gums
category with the launch of our worldwide dominant bubble gum brand Bubbaloo. Bubbaloo is sold in 25 countries

Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. For over two decades, we
have worked with the Kerala Agriculture University to undertake cocoa research and released clones, hybrids that
improve the cocoa yield. Our Cocoa team visits farmers and advises them on the cultivation aspects from planting
to harvesting. We also conduct farmers meetings & seminars to educate them on Cocoa cultivation aspects. Our
efforts have increased cocoa productivity and touched the lives of thousands of farmers. Hardly surprising then
that the Cocoa tree is called the Cadbury tree!
We are performance driven, values led. Throughout changing times, our constant values have inspired us to be
pioneers in business and in corporate responsibility. They help ensure we are proud of our company and are
critical to our core purpose of creating brands people love.

Our values are:

We are passionate about winning. We compete in a tough but fair way. We are ambitious, hardworking and make
the most of our abilities. We are prepared to take risks and act with speed.

We put quality and safety at the heart of all of our activities - our products, our people, our partnerships and our

We genuinely care for our business and our colleagues. We listen, understand and respond. We are open, friendly
and welcoming. We embrace new ideas and diverse customs and cultures.

We always strive to do the right thing. Honesty, openness and being straightforward characterise the way we do
business. We have clear principles and do what we say we will do.

We take accountability for our social, economic and environmental impact. In this way we aim to make our
business, our partners and our communities better for the future.

Our Business Principles are our code of conduct and also take account of global and local cultural and legal
standards. They confirm our commitment to the highest standards of ethics and business conduct. Core purpose
and vision section: Core purpose: Our core purpose is creating brands people love. The core purpose captures the
spirit of what we are trying to achieve as a business.
Cadbury would realize several possible advantages in going abroad. By penetrating a foreign market the
company could:
• Maintain a stable growth of a company by maximizing the use of its production capacity and thus increase
economies of scale and scope.
• With its brand name, Cadbury could counterattack the competitors it faces in the domestic market by
attacking their domestic market.
• Keep up with the financial strength by increasing its sales and profit, indeed the foreign market could
present higher profit opportunities than the domestic products.
• Acquisition rules in UK, reduce its dependence on the UK market and therefore diversify its market specific
• Overall, Cadbury has been successful through the new products (development) it has to offer.

Generally, as Cadbury has a weak position in the US market, thus, need to change its target to a different
location. Besides its lack of distribution network, it also has a small total of market share altogether.
Therefore in order to market the product in France successfully, Cadbury would have to find out on how it
can improve in order to have great performance. It is also good to find out what are the situations that they
could avoid in order to be successful. In order to market products the following issues should be considered:
• Total French production of chocolate bars and confectionary, which has increased by 24.5 per cent
between 1988 and 1991, has slowed down in more recent years, partly due to the economic slump.
• Consumption of chocolate products, which has been growing until 1991, remained fairly static in 1992,
reflecting a fall in demand due to the gloomy economic situation.
• Sales of milk chocolate bars, which account for 24 per cent by volume of total sales of chocolate bars,
decreased by 3.7 per cent.

Through its confectionary product line, least to mention is to build viable positions in prioritized markets
through organic growth and acquisition. Besides what is mention above, Cadbury has other opportunities to
have market development in Russia and China. The Timeout Candy Bar market is growing worldwide. This
company is also at the same time distributing its products via the internet – Develop Gourmet Line. Besides
developing the “Low Calorie” line of chocolates and sweets, they also offer the “Sugar Free” sweets line.
This has thus opened a completely Cadbury world in US.
Therefore in order to get the product into a new foreign market, France, Cadbury would have good
opportunities in store for them. Opportunities are as follows:
• In terms of political issues, France is an advanced parliamentary democracy and politically is highly stable.
The political power is centralized in the parliament, the Prime Minister and the President. The country
specific risk is negligible. France is a member of the European Community and has excellent relations with
the UK.
• Economically, France has the fourth largest Gross Domestic Product in the world. It is a first-world
advanced market based economy. Despite a recent recession, its economy is very strong and also highly
deregulated in line with European Union policies. France represents a very large potential market with a high
standard of living and purchasing power. The economy is highly open internationally and conducts a high
percentage of trade within its European partners.
• With regards to its social situation, France has a broadly central/southern European culture which has
many similarities with the UK. However cultural differences do exist and these must be considered when
planning for the market.
• France has a high technological level and a lot of industries are based in the technological sector. This
technological base constitutes one of France’s competitive advantages.


Due to its confectionary products, it is very important for Cadbury to be aware of any present or upcoming
threats. The company should take note of the changes in the consumer’s buying trend. It is perceived that
consumers might shift from chocolates to “Healthy” snacks. If this were to happen, there might be a poor
product development which would tarnish the Cadbury’s name. Needless to say price wars would occur
between its competitors like Mars, Hershey and Nestle. Due to the abovementioned, there would be
seasonal sales slumps all year round which will reflect to an increase in cost of the raw materials needed.
Cadbury would then have to be prepared for growth of small local gourmet chocolates and regional candy

However if Cadbury were to market its products in France, the company has to be aware of the risks it could
encounter. It might:

• Not understand foreign customer preferences and fail to offer a competitively attractive product;
• Not understand the foreign country’s business culture or know how to deal effectively with foreign
• Underestimate foreign regulations and incur unexpected costs.
• Threat of entry due to the competition growing through acquisition.

Obviously any foreign entry decision must take the abovementioned elements into account.

The Ansoff matrix


Present New



Because Cadbury is introducing its brand name to a new region, in relate to the Ansoff matrix above, it can
be argued that it is under market development. Although the company has come up with a few current
products, it is targeting to a new market. Despite the competition against the rest (Hershey’s, M&M Mars and
Nestle), Cadbury has to have the bargaining power of the buyers in order to be competitive in the market.
Although the company need to know that substitutes are not a major concern. Finally, to conclude that
Cadbury is in the Market Development, they would have to have the bargaining power of suppliers as they
are not in power position due to commodity like nature. And also to be aware of the cost of packaging
materials as it has increased over time.
There are a few strategic recommendations that Cadbury could come up with in order to market its products
not only in the region of France, but also to market it products successfully. After much discussion on the
position of the product currently, the following recommendations could be suggested:

• Increase Frances Involvement by implementing a pound campaign to Launch Timeout in France which has
already been done in America.
• Increase Marketing and Promotion globally by marketing products in emerging markets.
• Focus on non-chocolate development/acquisitions by developing line of non-chocolate candies.
• Develop Novelty/Specialty markets—Gourmet Line on Internet, by developing gourmet line to be
distributed via internet.
• Aggressive new product development—low calories, sugar free and sweets. This has to be done by
researching and developing new products/ joint venture.


In order for Cadbury to reach the peak of achievement, the company would have to stress on the global
growth of the product. It can be a risk to market it in the region France, but with careful study of the target
market segments and its economic position, it can be an attainment. Cadbury should also look into other
countries like the Asia Pacific in order to market its products popular globally. But then again, careful
considerations to look at its major competitors and to obtain the rules and regulations of a certain country
are equally important.

• Cadbury Schweppes plc is a very profitable organization, generated revenue of more than £6,508 billion
• It is a global chocolate brand built upon a reputation for fine products and services.
• Cadbury Schweppes plc was one of the Fortune Top 100 Companies to Work For in 2005. The company is
a respected employer that values its workforce.
• The organization has strong ethical values and an ethical mission statement


• Cadbury has a reputation for new product development and creativity. However, they remain vulnerable to
the possibility that their innovation may falter over time.
• The organization has a strong presence in the United States of America, UK and India. It is often argued
that they need to look for a portfolio of countries, in order to spread business risk.
• Cadbury's recall over 1 million chocolate bars over salmonella fears
• The organization is dependant on a main competitive advantage, the retail of coffee. This could make them
slow to diversify into other sectors should the need arise.
• The company has no apprehensions of cannibalization of its chocolate brands.


• Cadbury company is very good at taking advantage of opportunities.

• The company has the opportunity to expand its global operations. New markets with new products which
are limited in particular region.
• Cadbury has decided to focus on a few of its key brands such as Cadbury Dairy Milk, Bournvita, Eclairs
and Halls to drive growth for the company.
• Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other
goods and services both have potential.
• Cadbury India is attempting to increase the declining market for chocolate with innovation, one of which is
its sweet snack, Bytes.
• Brand ambassador Amitabh Bachchan for advertising there new products.


• Who knows if the market for Cadbury will grow and stay in favour with customers, or whether another type
of beverage or leisure activity will replace coffee in the future?
• Health organization have so many barriers for new development
• Cadbury’s are exposed to rises in the cost of chocolate and dairy products.
• Entry into salted snacks was ruled out so it is important to do new innovation and marketing research.
BSE Code: NSE Code:
Reuters: CADB.BO
"Cadbury House", 500793 CADBURY
19, Bhulabhai Desai Road,
Mumbai - 400026
Telephone: 022 - 4939558
Fax: 022-4938698 Listing: BSE, NSE.
Website: N.A


A 51% subsidiary of the Cadbury Schweppes UK, Cadbury India enjoys leadership position in Chocolate
segment in India. The brand name 'Cadbury' is synonymous with chocolates in India. The company has
leading brands in all segments viz. 5 star (countlines), Dairy Milk (bars), Gems (panned confectionery),
Eclairs (toffees) and Perk (wafer chocolates).

Shareholding Pattern

The share capital of the company is Rs. 35.7

crore and the number of total shares
outstanding amount to 3.57 crore. The face
value per share is Rs.10. The share is currently
trading at Rs. 418, as on May 22, 2001. The
market capitalization of the company is
Rs.1990.52 crore. The parent Cadbury
Schweppes holds 51% stake in the company.

Board of Directors
C Y Pal - Chairman
Matthew Cadbury - Managing Director
Rajiv Wahi - Vice Chairman
Jaithirth Rao - Director
S N Talwar - Director
Rajeev Bakshi - Director
Harsh Mariwala - Director
N V Iyer - Director
David Kappler - Director
B Puri - Executive Director
P Chhaya - Executive Director
J Strydom - Executive Director
G Sridhar - Executive Director
G M Bhat - Executive Director

Business Overview

Cadbury India's main source of revenue is its 70% bite of the 23,000 tonnes Indian chocolate market.
It is also present in the malted food market (Bournvita enjoys a 24 percent share of the 20,000 tonnes
brown drinks market). Of late, the company has ventured into the 120,000 tonnes sugar confectionery
market ('Googly') and has gained about 5% market share there. The revenue break up of its different
business segments is as follows:

Despite the fact that Indians have strong affinity for sweets, the size of domestic confectionery market
is small on account of traditional consumer tastes and habits. The Chocolate market in India is a niche
market penetrated largely in urban areas and per capita consumption is low as compared to those in
developed countries of the West. But future prospects of the chocolate category looks good as the
company plans to move into the arena of snack foods, as it has done in the Western markets.

The market for Malted food drinks is large and is characterized by a few large players. The market can
be broadly segmented into white malted food drinks which dominates in the Southern and the Eastern
parts of the country and Brown Malted food drinks which dominate in the North and the West. Large
brands like Bournvita and Horlicks dominate in Malted food drinks sector and the growth has been
steady in the last five years.
The future mission of Cadbury India is 'A Cadbury in Every Pocket'. The company's business strategy
hinges on following for driving its future growth:

• Increase the width of chocolate consumption, through low price point packs and distribution
• Increase depth of consumption, targeting regular chocolate consumers through generating
impulse and a dominant presence at Point of Sale.

• Maintain image leadership through a superior marketing mix.

• Be a significant player in the gifting segment, through occasion linked gift packs.

• Build critical mass in the sugar business by introducing value-added sugar confectionery

Future revenue growth will be through increasingly higher volumes rather than price increases. The
management believes that price increase can only be a short term objective. It is volumes, which are
very important to achieve the long-term goal of having a wide consumer base.

The company sees its growth in future in market expansion and new product launches. Increased
reach, new launches, higher marketing spend and intensive promotions - the mix, Cadbury is looking
at to fuel its future growth. The company is also looking for acquisition of brands, and its huge cash
reserves might be utilized for the purpose.

Performance of segments

Items Sales Value (Rs.Lakhs)

12/1999 12/2000 %Change
Malted Foods 11436.90 13144.75 14.93%
Cocoa Powder and Drinking Chocolates 747.22 723.94 -3.12%
Chocolates, Coated Wafer Biscuits and
38923.60 43245.03 11.10%
Sugar Confectionery.


The company manufactures and sells

• Chocolates
• Sugar confectionery
• Malted foods,
• Cocoa powder,
• Drinking chocolate and malt extract

Established brands of the company in the Chocolate segment includes Dairy Milk, Perk, Crackle, 5 Star,
Eclairs and Gems. The main brands in sugar confectionery category are Googly, Frutus and Gollaum. In
the malted health category, Cadbury has a strong brand in Bournvita. Other food drinks offered by the
company are Cadbury’s Drinking Chocolate and Cadbury’s Cocoa powder. The company is also into the
business of Soft drink and has drinks like Canada Dry and Crush.

SWOT Analysis

Strong brand names like Cadbury Dairy Milk, Five star and Eclairs.
Rich product mix.
Support from the parent Cadbury Schweppes.

Lack of launch of new brands in Chocolates segment.


The Indian market and more specifically the urban areas where the penetration of Chocolates is low
can be developed as a future market through affordability and availability.
Using information and technology to bring efficiency in logistics and distribution.

Stiff competition in Confectionery segment.

The company has large exposure to foreign currency exchange rate risk, mainly on account of
imported cocoa beans and cocoa butter in US Dollar and Pound Sterling.

Cadbury's means quality: this is our promise. Our reputation is built upon quality: Our
commitment to continuous improvement will ensure that our promise is delivered'


Mr Bakshi, who took over at the helm in early 1998, set out a vision to achieve "a
Cadbury in every pocket" dream by increasing the penetration of chocolates, largely as an
impulse product in India. Mr Bakshi was earlier the marketing director at Cadbury India
before he took over as managing director, after a short stint at the company's London

• Promotion of brands carrying mass franchise without compromise on quality or

• Increasing the market depth including rural India’s coverage. (so far in case of
chocolates, rural areas are not covered)

• Better product quality and packaging.

• All round efficient utilisation of tangible as well as intangible assets such as

brands and people.

• Effective use of real estate including sale or lease

• Efficient working capital management

• Depreciation charge to meet the CAPEX needs every year.

• Surplus cash so generated to be either gainfully and meaningfully reinvested in

business or return to stakeholders.

To capture the cricket craze amongst the Indian kids which would boost the sale of our
client product



The story of Cadbury Dairy Milk started way back in 1905 at Bournville, U.K., but the journey with chocolate lovers
in India began in 1948.

The pure taste of Cadbury Dairy Milk is the taste most Indians crave for when they think of Cadbury Dairy Milk.

The variants Fruit & Nut, Crackle and Roast Almond, combine the classic taste of Cadbury Dairy Milk with a variety
of ingredients and are very popular amongst teens & adults.

Recently, Cadbury Dairy Milk Desserts was launched, specifically to cater to the urge for 'something sweet' after

Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk Wowie, chocolate with Disney characters
embossed in it, and Cadbury Dairy Milk 2 in 1, a delightful combination of milk chocolate and white chocolate.
Giving consumers an exciting reason to keep coming back into the fun filled world of Cadbury.

5 star
Chocolate lovers for a quarter of a century have indulged their taste buds with a Cadbury 5 Star. A leading
knight in the Cadbury portfolio and the second largest after Cadbury Dairy Milk with a market share of 14%,
Cadbury 5 Star moves from strength to strength every year by increasing its user base.

Launched in 1969 as a bar of chocolate that was hard outside with soft caramel nougat inside, Cadbury 5
Star has re-invented itself over the years to keep satisfying the consumers taste for a high quality & different
chocolate eating experience.

One of the key properties that Cadbury 5 Star was associated with was its classic Gold colour. And through
the passage of time, this was one property that both, the brand and the consumer stuck to as a valuable

Cadbury 5 Star was always unique because of its format and any communication highlighting this uniqueness,
went down well with the audiences. From 'deliciously rich, you'd hate to share it' in the 70's, to the 'lingering taste
of togetherness' & 'Soft and Chewy 5 Star' in the late 80's, the communication always paid homage to the product

More recently, to give consumers another reason to come into the Cadbury 5 Star fold, Cadbury 5 Star Crunchy
was launched. The same delicious Cadbury 5 Star was now available with a dash of rice crispies.

Cadbury 5 Star & Cadbury 5 Star Crunchy now aim to continue the upward trend. This different and delightfully
tasty chocolate is well poised to rule the market as an extremely successful brand.


A pretty teenager; a long line, and hunger! Rings a bell? That was how Cadbury
launched its new offering; Cadbury Perk in 1996. With its light chocolate and wafer
construct, Cadbury Perk targeted the casual snacking space that was dominated
primarily by chips & wafers. With a catchy jingle and tongue in cheek advertising,
this 'anytime, anywhere' snack zoomed right into the hearts of teenagers.

Raageshwari started the trend of advertising that featured mischievous, bubbly

teenagers getting out of their 'stuck and hungry' situations by having a Cadbury
Perk. Cadbury Perk became the new mini snack in town and its proposition "Thodi si
pet pooja" went on to define its role in the category.

As the years progressed, so did the messaging, which changed with changes in the
consumers' way of life. To compliment Cadbury Perk's values, the bubbly and
vivacious Preity Zinta became the new face of Perk with the 'hunger strike'
commercial in the mid 90's.

the new millennium, Cadbury Perk moved beyond just owning 'hunger' to a "Kabhi
bhi kaise bhi" position, because the urge for Cadbury Perk could strike anytime and

With the rise of more value-for-money brands in the wafer chocolate segment, Cadbury Perk unveiled two new
offerings - Perk XL and XXL.

The temptation to have more of Cadbury Perk was made even greater with the launch of Cadbury Perk Minis in
2003 for just Rs. 2/-

In 2004, with an added dose of 'Real Cadbury Dairy Milk' and an 'improved wafer', Perk became even more
irresistible. The product was supported in the market with a new look and a new campaign. The advertisement
spoke of the irresistible aspect of the brand, with 'Baaki sab Bhoola de' becoming the new mantra for Cadbury

Cadbury Celebrations was aimed at replacing traditional gifting options like Mithai and dry- fruits during festive

Cadbury Celebrations is available in several assortments: An assortment of chocolates like 5 Star, Perk, Gems,
Dairy Milk and Nutties and rich dry fruits enrobed in Cadbury dairy milk chocolate in 5 variants, Almond magic,
raisin magic, cashew magic, nut butterscotch and caramels.

The super premium Celebrations Rich Dry Fruit Collection which is a festive offering is an exotic range of
chocolate covered dry fruits and nuts in various flavours and the premium dark chocolate range which is exotic
dark chocolate in luscious flavours.

Cadbury Celebrations has become a popular brand on occasions such as Diwali, Rakhi, Dussera puja. It is also a
major success as a corporate gifting brand. The communication is based on the emotional route and the tag line
says "rishte pakne do" which fits with the brand purpose of strengthening your relationships with something sweet.


Ever see people hide away their chocolate since they don’t want to share
it! If you have, then its likely to be a bar of Cadbury Temptations!
Cadbury Temptations is a range of delicious premium chocolate in five

Research revealed a niche segment of “ chocoholics” - those exposed to

international chocolates and those who love a variety of chocolates but
possibly find the price of international chocolates too high. Cadbury
Temptations is a range targeted at this segment of discerning chocolate

The Cadbury Temptations range is available in 5 delicious flavour variants

- Roast Almond Coffee, Honey Apricot, Mint Crunch, Black Forest and Old
Jamaica. With its international quality chocolate Temptations soon became a
popular brand for "chocoholics".

Eclairs was first discovered by a local confectionery firm in London,
England in the 1960s. The firm then became part of Cadbury in 1971
making Cadbury Eclairs the second largest brand in the company.
The experience of eating a Cadbury Dairy Milk Eclair is truly unique
because of its creamy caramel exterior and rich Cadbury Dairy Milk
chocolate at the center. In 2006 Cadbury Dairy Milk Eclairs launched
a crunchy Eclair with a hard caramel outside and delicious Cadbury
Dairy Milk chocolate inside called Cadbury Dairy Milk Eclairs


The saying "Good things come in small packets" has been proven right many a times and it couldn't have been
truer for the pretty chocolate buttons called Gems. Who can forget the unique, brightly colored chocolate buttons
with crispy shells, encased in a pack that's as colorful as the product itself? Unrivalled in all these years, Cadbury
Gems has captured every consumer's fantasy for almost 4 decades. Little wonder that Cadbury Gems, the brand
that came into India in 1968 is still going strong.

The sheer taste and the fun associated with eating Cadbury Gems and the joy of sharing it with friends has made
the brand a dear companion and a source of nostalgia for consumers.
Cadbury Gems brings happiness to the consumer's world. With this promise in mind, Cadbury Gems has
always had 'Masti' as the key proposition in all its communication. In fact, Cadbury Gems is always a willing
ally for pranks and fun.

Cadbury Gems has continuously tried to be relevant and exciting for consumers. In its
constant attempt to contemporarise, a unique stand up tube pack with a flip top was
launched, which became an instant hit with consumers.

Early 2006 gave consumers one more reason to celebrate with Cadbury Gems; the launch
of Cadbury Fruity Gems, a fruit flavoured variant with a crispy shell outside and white
chocolate inside. Now consumers had not one, but two reasons to enter the 'Masti' world
of Cadbury Gems.

Today, Cadbury Gems has established itself as one of the leading brands in its segment.
With the single-minded purpose to delight every consumer and help them discover the fun,
exciting and adventurous side of life, Cadbury Gems will continue to be the leading brand
in Cadbury India's portfolio.

Cadbury bytes

Cadbury Bytes was launched in 2004-05 as Cadbury's foray into the rapidly growing packaged snack market.

Cadbury Bytes is a one of a kind snack, in that it is sweet and not salty, as compared to most of the other snacks.
It's a bite sized snack with a crunchy wafer and rich Choco cream filling. There are three variants of Bytes available
in the market - Regular, Coffee and Strawberry, at two price points- Rs 5 and Rs 10.

Cadbury Bytes is targeted at teens as they are the largest consuming segment of packaged snack category. They
are also the gateway to the family, especially for a new sweet snack.

With Bytes, Cadbury has entered into a new category with well entrenched and established brands. It is an exciting
challenge for us to take the brand forward and make it a stupendous success.

Cadbury Bytes is positioned as the 'only sweet snack' in the world of salty snacks. The proposition we have arrived
at is "Snacking ka meetha funda", where we take a pot-shot at other snacks, by saying `Har snack namkeen nahi
hota'. The product is all about breaking a cliché and teenagers identify with breaking stereotypes. The new
commercials- 'Tommy' and 'Villain', talk about breaking the stereotype.



Cadbury was incorporated in India on July 19th, 1948 as a private limited company under the name of Cadbury-Fry
(India). Cadbury Bournvita was launched during the same year.
It is among the oldest brands in the Malt Based Food / Malt Food category with a rich heritage and has always
been known to provide the best nutrition to aid growth and all round development.

Throughout it's history, Cadbury Bournvita has continuously re-invented itself in terms of product, packaging,
promotion & distribution. The Cadbury lineage and rich brand heritage has helped the brand maintain its leadership
position and image over the last 50 years.

Halls accounts for 50% of international cough drop sales and is the leading sugar confectionery brand in the world.
In 1930’s, the Hall brothers invented its Mentho-Lyptus formula, using a combination of menthol and eucalyptus,
and began producing cough drops. The cough drops were introduced into the US during the mid-1950s. Warner-
Lambert recognised the potential of the product and acquired Halls in 1964. In 1971, Warner Lambert began
selling Halls under the Adams family, and the first national television campaign was aired in the US & the results
were a resounding success.

Cadbury India has expanded its confectionary portfolio in 2007 by foraying into the Bubble gum category with the
launch of Bubbaloo Bubblegum- a successful bubblegum brand from its international portfolio.

Bubbaloo is an innovative soft bubblegum with a centre filled liquid.

It is filled with a high level of a great tasting fruit flavoured liquid that floods your mouth instantly.

Bubaloo is currently available in two yummy flavors- Strawberry and Mixed Fruit.

The communication focuses on the "fun filled liquid centre " of Bubbaloo and is anchored by “Bubba- the cat”, the
international mascot for the brand Bubbaloo

Cadbury is today releasing its Interim Management Statement covering trading for the
third quarter ending 30 September 2008, organisation changes and an update on cost
reduction programmes.


• Good third quarter revenue performance: +6% despite cycling strong prior year
• Continued double digit growth in emerging markets: +13%
• Streamlined organisation to accelerate decision making and improve execution
• New Vision into Action cost reduction initiatives announced
• Outlook for the year unchanged from guidance in July

Note: All comments on revenue growth are on a like-for-like basis at constant exchange

Todd Stitzer, Chief Executive Officer, said: "The good third quarter performance was in
line with our expectations. Our new streamlined organisation, together with additional
cost reduction initiatives, will increase the focus on implementing our strategic plans and
underpin delivery of our margin targets. Despite weaker economic conditions, we expect
strong profit growth for the year and reconfirm the revenue and margin guidance we gave
in July."


We are today announcing important changes to our organisation and management

structure which will strengthen our focus on globally led categories and further
streamline the organisation. Our four region operational structure will be eliminated,
leaving seven business units (listed in Appendix A) which will report directly to Todd
Stitzer, CEO. At the same time, we are strengthening our global chocolate, gum and
candy category structure, further increasing our focus on category development.

Overall, these changes remove our current regional structure, de-layer the organisation
and further reduce SG&A costs. They will enable faster decision making, improve in-
market execution and ensure a stronger alignment of category strategies and commercial

As a result of these and related changes, approximately 250 people will leave the
business including a number of senior managers. We expect these changes to underpin
delivery of our Vision into Action margin goal. The cost of this programme will be
funded from the total restructuring programme announced in June 2007.


In June 2007, we presented the Group's VIA strategy which included a significant
increase in our margins to mid-teens by 2011. Part of achieving this goal included
investing around £650m, including £200m of capital expenditure, to drive a major
reduction in SG&A and supply chain costs, the benefits of which would be progressively
realised over the period to 2011.

As part of this continuing programme of management action, we are today announcing

three further restructuring measures within our operations:

Reconfiguration of chocolate manufacturing in Australia and New Zealand

• Following a review of the confectionery supply chains in Australia and New

Zealand, we have started a major programme of plant optimisation and supply
chain reconfiguration to simplify our manufacturing activities, creating centres
focusing on key technologies. As part of the programme, we expect to reduce
SKUs by around 30% and see an incremental improvement in customer service.
Around 330 positions will be removed over the next two years.

Further centralisation of European operations

• We are proposing to establish a single, state-of-the-art science & technology

centre of excellence in Europe focusing on gum and candy. Based in Switzerland,
it would consolidate three separate facilities and builds on the centralisation of
commercial and supply chain management for Europe in Switzerland which has
been largely put in place during 2008.

Outsourcing of global facilities management

• We have reached agreement with a global partner to progressively provide

facilities management and related services to Cadbury. Subject to consultation,
this will likely result in the transfer of a significant number of existing roles and
third party contracts over the coming years.

These initiatives are within the scope of the VIA programme already announced and are
part of the performance improvement targets set out in 2007. Taken together, projects
which will deliver around 60% of the total planned cost savings have been announced to


In line with the new organisation set out above, a new reporting structure will be
introduced in 2009. A re-presentation to the new reporting units will be provided at the
time of the 2008 final results. All comments on revenue growth are on a like-for-like basis
at constant exchange rates.

Overall, the Group delivered a good performance in the third quarter following a strong
first half. Revenue growth in the quarter was 6%, bringing year-to-date growth in
revenues to 7%. Performance benefited from an excellent quarter in our business in
Britain and continued double-digit growth in emerging markets. All categories made
good progress supported by sustained marketing and promotional investments.

In Britain, Ireland, the Middle East and Africa (BIMA), revenues grew by 10%
despite lapping strong prior year comparatives. This reflected strong performances from
both our developed market operations in Britain and emerging markets, particularly in
South Africa where revenue growth was 22%. In Britain, growth of 11% benefited from a
significant recovery in candy, which in the same quarter last year was adversely impacted
by floods at our factory in Sheffield, a strong innovation programme supported by further
increases in marketing and a focus on strengthening our core products. Key product
launches included the new range of Cadbury Dairy Milk bars - Cranberry & Granola and
Apricot Crumble - and the re-launch of Wispa.

In Europe, revenues were 4% ahead in the quarter. Overall, our gum portfolio performed
well in difficult market conditions, driven by market share gains in France, Northern
Europe and Russia. Integration of the recent Intergum acquisition in Turkey has
progressed well with major changes in route to market activities now starting to benefit
market share and revenue trends. The overall rate of growth in Europe was held back by
the market slow-down in France, Spain and Northern Europe and the near term impact of
route to market changes in Russia.

In the Americas, revenues were ahead 7% in the quarter, reflecting good growth in South
America and the US, partly offset by a weaker performance in Canada. In the US, our
candy business, driven by Swedish Fish and Sour Patch Kids, performed well. Compared
to recent trends, the US gum market grew more slowly in the quarter. We sustained a
strong market share and in late September we announced an 8% increase in US gum
prices, which will be implemented through the fourth quarter. Growth in our emerging
market businesses in Latin and South America remained strong, particularly in Brazil
where the business delivered strong revenue growth in good market conditions.

In Asia Pacific, revenues were 2% ahead in the quarter, with continued growth in
confectionery, up 5%, partly offset by a weaker quarter in our Australian beverage
business where revenues were 5% lower. Confectionery growth was very good across our
key Asian emerging market businesses which had a strong quarter, with revenues up
19%. In particular, India and South East Asia delivered strong double-digit increases in
revenues on the back of continued market growth, new product launches, including new
variants of Bubbaloo, and promotional activities. In Australia, confectionery revenue was
impacted by year-on-year changes in promotional phasing and frequency and some trade

Update on Financial Position

Over 80% of our revenues and underlying profit from operations are generated outside
the United Kingdom. In 2008, movements in exchange rates, and in particular the
weakening of the pound versus the US dollar, Australian dollar and the euro, are expected
to increase revenues by around 7% and underlying profit from operations by around 12%.

Our projected interest rate for the year as a whole is unchanged at around 6%. In July,
we completed a successful 10 year sterling bond issue (£350m at 7.25%) and in early
October, we redeemed a 5 year US dollar bond ($1bn at 3.875%) issued at the time of the
Adams acquisition. At this time, around 65% of our borrowings are at fixed rates,
reflecting recent issuances and redemptions.

Other than as disclosed in this release, there have been no other material changes to the
financial position of the Group.


During 2008, considerable progress has already been made implementing the VIA
programme. The further restructuring activities and organisation changes announced
today underpin Cadbury's focus on organic growth and margin improvement.

Commodity prices remain in line with our expectations. Overall commodity cost inflation
during 2008 is expected to remain between 5-6%. So far in 2008, price realisation has
remained strong and is expected to recover overall input cost increases for the year
despite higher inflation in the second half.

We continue to expect further cost pressures in 2009, particularly in respect of cocoa

costs. At this early stage, our 2009 commodity and input costs are expected to be in the
range of 6 to 8% higher than 2008. Consequently, we are in the process of implementing
price increases in most of our major markets to cover the impact of these future cost rises.

We are in a period of unprecedented global financial turmoil and it is not possible to

gauge with certainty what effect the most recent market turbulence may have on both
trade customer and consumer behaviour. However, despite these increased headwinds we
participate in a resilient category with a strong business model and continue to expect a
successful outcome for the year with guidance on revenue and margin unchanged from
the Interim Results in July.
We will provide a further update on trading at our customary pre-close update on 16