Cadbury backlash a win for Kiwi chocolate brand Whittaker's

Thursday, 23 February 2017

The decision to close the Cadbury factory in Dunedin has prompted an outcry.

Consumer backlash at Cadbury's decision to shut its Dunedin factory could be a boon for the company's competitors.

Since it was revealed that the factory is set to close next year, culling hundreds of jobs, a boycott movement has taken off.

A Boycott Cadbury NZ Facebook page has been launched, and actor Sam Neill has encouraged New Zealanders and Australians not to buy Cadbury's products again.

University of Auckland marketing expert Bodo Lang said it was another in a series of blows to Cadbury's brand reputation.

* Sam Neill's from Dunedin and doesn't want you to buy Cadbury chocolate - ever again**

'Cadbury has been under immense pressure over the past few years. 2009 was particularly trying because Cadbury admitted that it had replaced cocoa butter with vegetable fat including palm oil and that it had also reduced its family blocks from 250g to 200g,' he said.

'Because of pressure from consumers, Cadbury reversed its decision on palm oil fairly quickly and it also lifted its family blocks back to 220g a few years later. While the actions were reversed, the consequences for the Cadbury brand were here to stay and they were disastrous.'

He said Cadbury had started discounting more heavily, to win customers back.

But the furore had given local brand Whittaker's a golden opportunity to increase market share, he said.

'Their tongue-in-cheek advertising, focused on 'quality ingredients' and 'New Zealand-owned and made' and it worked. With the closure of the Cadbury plant in Dunedin, Whittaker's is being given yet another golden opportunity. Now Cadbury will have to be imported from Australia which leaves the door wide open for Whittaker's. Negative consumer reactions are inevitable as will be more price discounting by Cadbury.

'The real question is what will Whittaker's do with this opportunity? While they may not be able to roll out their old advertising campaign, all they have to do is to stay true to their brand values: focus on quality, local ownership and production and tap into the New Zealand psyche and sense of humour. This should guarantee further success.'

He said Nestle could also benefit if it became more active in the New Zealand market.

'Whatever will happen, the battle for New Zealand chocolate lovers has just entered the next round.'

Lang's colleague, Mike Lee, said how the Cadbury brand fared would depend on a range of factors.

'If a consumer doesn't trust Cadbury HQ, then some research shows that up to 25 per cent of such consumers will boycott the brand, and further 7 per cent of non-consumers will definitely not purchase Cadbury, even though they were not fans before,' he said.

'The situation is also particularly bad when a factory relocation damages the identity of the local region, which in this case it does.

'On the other hand, if consumers do not identify with the factory being relocated/closed, the effect on the brand is actually mitigated. So that means that consumers who do not feel as close to the Dunedin factory are less likely to boycott the brand because of the close.'

Countdown is offering Cadbury products on promotion this week – including Crunchie bars for 90c instead of the normal $1.60.

But a spokesman said it was not a response to the factory closure headlines.

'All of our promotions are planned well in advance, so this is not related.'

Foodstuffs would not comment on any planned discounting, except to say it would continue to stock the products.

Whittaker's marketing manager Holly Whittaker said: 'We will continue our strategy of making premium quality chocolate from beans to bar in Porirua.'