Cadbury Beverages

Cadbury Beverages is a division of one of the world’s largest multinational firms, Cadbury Schweppes PLC. Cadbury Schweppes can be traced back to 1783 in London, where they created and sold the first artificial mineral water. In the late 1800s, Schweppes introduced tonic water and ginger ale and in the 1969, they diversified into food products in a merger with Cadbury, the British candy maker. The company was ranked 457th in Business Week’s Global 1000 firms, had worldwide sales of $4.6 billion, and product sales in more than 110 countries. Beverages for Cadbury accounted for 60 percent of company sales with an operating income of 53 percent.

Today, Cadbury Schweppes is the third largest soft drink marketer behind Coca-Cola and PepsiCo. They have achieved this success with product extensions, acquisitions, and through consistent and aggressive marketing. Over the years, Cadbury has established a diverse product portfolio, including the acquisition of Crush, from Proctor & Gamble for $220 million, the rights to Sunkist and Canada Dry soft drinks, and several soft drink brands in Spain and Portugal. Many of Cadbury’s brands are the market leader in their category. In the orange-flavored soft drink category, Sunkist and Crush combined lead the way, Canada Dry is the top selling ginger ale and seltzer, and Schweppes leads the way in tonic water. In the United States, Cadbury beverages are broken down as follows for sales, Canada Dry accounts for 39 percent, Sunkist 22 percent, Crush 20 percent, Schweppes 17 percent and the remaining 2 percent are from other soft drinks. (See the breakdown in Exhibit 1, page 2).

Exhibit 1

The acquisition of the Crush brand from Proctor & Gamble needs to be repositioned and re-launched into the orange soda market to be successful. There are three main issues that need to be focused on. First, the bottling network for the Crush soft drink brand needs to be immediately rejuvenated. Secondly, the Crush brand equity needs defined and a...