Inside Cadbury: Kind hearts and chocolates

Cadbury is the target of a takeover bid by its US rival Kraft. Andy McSmith examines the history of a company that is far more than just a confectioner

Cadbury means more than a sweet taste in the mouth. There is social history in those chocolate bars, which take us back to the great Victorian reformers, who worked hard and used their money to do good. Similarly, the word Bournville might signify a bar of dark chocolate to most of us but it is also the name of a model village near Birmingham which is one of the last places in Britain where no one can buy a drink; there are no pubs and no off licences there. Even the mighty Tesco supermarket had its application to sell alcohol in its Bournville branch turned down. And all because the British love their chocolate.

The man who started it all was a shopkeeper with a social conscience named John Cadbury, whose wealthy family were leading members of the West Midlands Society of Friends, or Quakers. Religion restricted the young Cadbury's choice of career. Quakers were not allowed to enter university, which ruled out professions such as medicine or the law. A military career was out because Quakers are pacifists, so he spent six years as an apprentice tea dealer in Leeds and went back to Birmingham in 1824 to open a little grocery shop, selling tea, coffee, hops and mustard at 93 Bull Street.

This was the beginning of the industrial revolution, which created hideous overcrowding and social problems in cities like Birmingham. Cadbury was a dedicated reformer. He hated to see animals mistreated and helped to launch the society that later became the RSPCA. He also joined the campaign to end the practice of employing small children as chimney sweeps.

But the greatest of social evils, in his estimation, was alcohol. It was very cheap and vast quantities poured down the throats of the wretched slum dwellers, and their children, to ease the pain of living. John Cadbury never touched alcohol in his life and believed adamantly that the poor had little chance of bettering themselves unless they renounced it. But rather than serve them up lectures, he decided to offer a better way to quench the thirst.

So it was with a sense of almost divine mission that he set to work with a mortar and pestle in the back of his little shop, grounding imported cocoa into blocks, adding sugar, potato flour and sago starch according to taste. He told customers that when they got the block home they should scrape off a little of it into a cup or saucepan, add milk or water and enjoy a drink that was tastier and far less harmful than cheap gin.

Whether or not this had any effect on Birmingham's drink problem, it did wonders for trade and turned Cadbury into one of the city's leading retailers. He gave up shopkeeping and turned to manufacturing, starting from an old malthouse in Crooked Lane, Birmingham, from which he sold 16 varieties of drinking chocolate and 11 cocoas. But one idea that never entered his inventive brain was to sell chocolate in solid slabs as food. That was first tried by Cadbury's Bristol-based rival, JS Fry, a company founded in the 18th century by another great reforming Quaker businessman, Joseph Fry. The Dairy Milk bar that is Cadbury's signature product, with more milk than any chocolate bar the nation had tasted before, was launched in 1905. Cadbury's place as Britain's leading chocolate manufacturer was secured when it bought JS Fry in 1919.

Meanwhile, John Cadbury handed over his firm to his sons, Richard and George, who were threatened with bankruptcy, and not just by the competition from J S Fry; another major firm had entered the market. This was the Cocoam Chocolate and Chicory Works, in York, run by Joseph Rowntree, yet another Quaker on a mission to improve society.

In a tight corner, the Cadbury brothers daringly invested in new technology from Holland that enabled them to squeeze the cocoa butter out of the cocoa. They marketed the resulting purified "cocoa essence" so successfully that by the 1870s they were looking for somewhere to open a bigger factory. They picked a stretch of open land outside Birmingham, near Selly Oak village, which was conveniently near a railway station, a canal and a plentiful supply of water. The nearest large building was Bournbrook Hall, but that year France and French confectionery were all the rage, so the brothers called the site "Bournville".

Here they built was what intended to be a model factory, where the workforce enjoyed better conditions than most factory labourers at that time, including a half-day on Saturdays. In Bournville, they had heated dressing rooms, kitchens, gardens, a large sports field and a swimming pool. Management negotiated special workers' fares with the railway company and encouraged young employees to go to night school. For half a century, there were also morning prayers and Bible readings. In 1906, Cadbury set up a pension fund.

In the 1890s, another group of Quakers with a special interest in town planning launched the garden city movement, which produced the towns of Letchworth and Welwyn in Hertfordshire, which were designed to provide everything that would make life pleasant for the inhabitants – except, of course, anywhere that sold alcohol.

George Cadbury and his wife Elizabeth were most impressed, because they had already been thinking along those lines. "When I first came to Birmingham and we were living at Woodbrooke, morning after morning I would walk across the fields and farmland between our home and the works, planning how a village could be developed, where the roads should run and the type of cottages and buildings," Dame Elizabeth wrote in her memoirs.

Cadbury bought another 120 acres of land and created the Bournville estate, which is still alcohol-free. That explains why, when students of Birmingham University, whose campus adjoins Bournville, want to go out for the evening, they all seem to head in the opposite direction. Bournville Village Trust has proved so tough and so true to its Quaker roots that it even defeated the mighty Tesco.

In 2007, Britain's biggest retailer applied to open a Tesco Express on the site of a disused petrol station just outside the Bournville estate, and applied for a licence to sell alcohol. "We will oppose this all the way. You can expect residents to be putting up barricades and we will be right behind them," Alan Shrimton, a leading member of the Bournville trust, vowed at the time.

And they were victorious. "The Tesco shop is there but it doesn't sell alcohol," a spokeswoman for the trust said yesterday. "There is no drink sold in Bournville, because we still have the Quaker tradition."

Chocolate is one of the last things the British public wants to give up, even in a recession. Sales were up 2 per cent in the first half of this year, and Cadbury's performance was even more impressive, with revenue up 12 per cent.

Its success has been much helped by one of the simplest and most effective advertising campaigns of recent years – a 90-second film of a gorilla sitting at a drum kit, apparently transported by the music of Phil Collins singing "In The Air Tonight". Socially, it meant nothing, but it certainly sold Cadbury's chocolate.

So there is no great mystery as to why the US company, Kraft, the world's second-biggest food manufacturer, should want to buy this unique British brand name, for which it is offering £10bn. Nor is it any wonder that the board of Cadbury is intent on fighting off a takeover. Cadbury is doing quite nicely on its own and has a lot of history to protect.

Cadbury in numbers

1.5m Creme Eggs produced each day at the Bournville plant.

104 Years since the first Dairy Milk bar was produced.

60 Countries Cadbury operates in around the world.

3 Average number of Creme Eggs each person in the UK will buy in a year.

1960 The year in which Cadbury Buttons arrived in the shops. White Buttons followed 29 years later. Until 1998, the packs featured nursery rhymes

2 Seconds – average frequency that a Dairy Milk bar is sold.

50,000 Number of people who work for Cadbury.

186 Calories in a Cadbury Crunchie bar.

460 Football pitches that would be covered by a year's supply of Dairy Milk.

1.1 Tonnes was the weight of the largest Cadbury chocolate bar in the world, made in 1988.