Cadbury cuts jobs and sells beverage division

Cadbury Schweppes, by its own account the world’s largest confectioner, has a new strategy that focuses on what the company calls its “under-exploited” potential. To this end, Cadbury is simplifying its structure and managing operations more centrally by focusing on the confectionery business and selling what remains of its erstwhile beverages unit. The new company will be called Cadbury plc.

In March, the company, which is owned by a consortium of private equity companies Blackstone Group und Lion Capital, had announced it would either sell or de-merge its U.S.-based beverage unit, Americas Beverages. A few months later, a sale looks more likely. Americas Beverage includes the brands Dr. Pepper, Snapple, and 7-Up. According to reports in the British media, two private equity groups are preparing competing GBP 8 billion (USD 15.8 billion) bids.

Cadbury has established a new revenue goal of 4 percent to 6 percent annually, reflecting what it believes is the higher growth potential of the stand-alone confectionery business.

In 2006 Cadbury Schweppes sold its European beverage unit for EUR 1.85 billion (USD 2.2 billion).

Along with reorganising its headquarters into one central location outside London and adopting a more centralised decision-making process and brand management, the company will close about 15 percent of its manufacturing sites around the world and cut its workforce by about 15 percent, or 7,500, it was reported.

Cadbury Schweppes was formed in 1969 from the union of Schweppes (beverages) and Cadbury (confectionery).

Bubbling up at number three among US soft-drink companies - behind Coke and Pepsi -, Dr Pepper/Seven Up is also the number one non-cola soft-drink business in North America. Dr Pepper, strictly speaking, has a spiced-cherry flavour and therefore does not qualify for fully-fledged cola status. Cadbury Schweppes’ North American business mixes up more than a dozen beverage brands.