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Cadbury: From grocery store to global giant

By Simon Hooper, CNN
A protester stands outside Cadbury's head office in Birmingham on Tuesday.
A protester stands outside Cadbury's head office in Birmingham on Tuesday.
STORY HIGHLIGHTS
  • UK chocolate company began life as grocery store in early 19th century
  • Store was run by a Quaker who saw drinking chocolate as alternative to alcohol
  • Cadbury became world's biggest confectionary company in early 2000s
  • Cadbury board has accepted $21.8B Kraft takeover offer
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London, England (CNN) -- The origins of Cadbury can be traced to a grocery store opened by a young Quaker in the industrial city of Birmingham, central England, in 1824.

John Cadbury's religious faith meant that he disapproved of alcohol so he began selling tea and coffee as alternatives and began experimenting with formulas for drinking chocolate, using a pestle and mortar to break up the cocoa beans and adding ingredients such as treacle and starches.

Cadbury's experiments paid off. In 1831 he bought a factory and established himself as a drinking chocolate manufacturer. In 1847 his brother Benjamin joined the business and two years later the brothers started selling Cadbury's first solid chocolate.

John Cadbury retired in the early 1860s, handing control over to his sons, Richard and George. The brothers introduced novel cocoa-pressing methods from the Netherlands and also established the company's headquarters at Bournville, just outside Birmingham.

Reflecting the family's Quaker beliefs, by the end of the 19th century Bournville had been developed into a "model village" where workers were provided with affordable housing, pension schemes and medical care -- and alcohol was tightly restricted.

By the early 20th century chocolate manufacturers were trying to imitate the smooth taste of Swiss chocolate, which was made using condensed milk.

Cadbury launched its first milk chocolate bar in 1897 but the company's real breakthrough came with the launch of Dairy Milk in 1905 -- Cadbury's signature brand to this day. The bar was sold in large slabs divided into squares which could be broken down into penny bars.

By the 1920s Dairy Milk dominated the British confectionary market. Popular Dairy Milk-derived products included the Milk Tray variety box and the Flake and Crunchie bars. From 1920 Dairy Milk was sold in its now-distinctive purple packaging and a year later the distinctive Cadbury signature became the company's logo.

In 1969, Cadbury merged with drinks maker Schweppes with the new company expanding into the U.S. soft drinks market, still under the control of a succession of Cadbury scions.

In the UK, Cadbury's position as the country's favorite chocolate manufacturer -- and purveyor of Easter eggs -- remained unchallenged with products such as Creme Egg, Curly Wurly and Wispa joining the ranks of Cadbury classics.

Since the 1980s the company had sought to extend its reach overseas, becoming the world's biggest confectionary group when it bought the U.S. Adams chewing gum business in 2003 for $4.2 billion.

Cadbury and Schweppes demerged under shareholder pressure in 2008 but the company remains a global player, employing around 45,000 people in 60 countries, including around 5,700 staff at eight manufacturing sites in the UK and Ireland.

In September 2009, Cadbury became the subject of a surprise takeover bid launched by American food giant Kraft, prompting demonstrations among Cadbury employees and "Keep Cadbury British" campaigns backed by trade unions, lawmakers and British consumers.

Members of the Cadbury family, which had remained at the helm until the mid-1990s but no longer owned enough shares to determine the fate of the company, also called for Cadbury's independence to be defended.

Cadbury's board dismissed the initial approach and a sweetened $16.4 billion offer in November as "derisory." But on January 19 2010 the board said it had accepted an offer worth $21.8 billion and agreed to recommend the deal to shareholders.