Friday, January 22, 2010
Sweet, Sweet Synergies
The last of the Cadbury Roses are but a sweet memory around here. Christmas is unquestionably over. Will it have been the last to feature the rich chocolate and voluptuous cream fillings that makes Cadbury's chocolates so decadent?
While it's been said that Kraft arrived at a reasonable price, it's also to be noted that the two firms have to be melded into one. It's Riverdeep merging with Houghton Mifflin, duplicate departments hunted down and brought to heel. For Kraft to make their merger work, they have to find a way to save $675 million per year for the next three years.
A candy company can cut costs by changing the recipe, reducing the amount of costly ingredients and adding cheaper substitutes. Kraft could add enough wax to Cadbury chocolates that they would serve as candles in an emergency. Imagine a box of Roses with wicks, to be inserted and lit in the event of a power failure.
High fructose corn syrup is cheaper than sugar, even though the flavor and texture isn't the same. A slight tweak, however, would not be expected to hurt sales significantly. After all, there's Mars to contend with, and Kraft wouldn't want to cheapen the Cadbury brand.
And then there are the employees.
Just like the unfortunates at Houghton Mifflin and Harcourt when Barry O'Callaghan whacked them with his synergy stick, the workers at Cadbury have become costs and potential savings.
One accounting department is all that is needed, so farewell Cadbury bean counters. There will be redundancies found in the sales and marketing departments.
In the end, Cadbury's can't possibly be the same. We can only hope that Kraft won't tamper, changing the Cadbury Rose into an artificial confection as unpalatable as their so-called "cheese" products.