Well played Cottee’s . . . well played indeed.

In 2009 whilst employed at Cadbury, we concurrently “changed the recipe” and downsized the chocolate (“candy” for US types) blocks by 20%.

Four weeks of the most intense consumer backlash on the changed recipe in Australia and even more intense backlash in New Zealand caused the global Board to swiftly act. Though the actual product had yet to hit shelves, the Board directive was immediate.  To avoid contagion to global markets using the exact same “new recipe” for over the 35 years, the Board directed immediate cessation of “new recipe” and the flushing of all lines; an instantaneous mega-million-dollar cost impact on A/NZ operations to mitigate global consequence risk 20+ the size.

Somewhat comically, the “superior” product of which consumers had complained without having experienced, flowed through the distribution supply chain for the following 8 months without a single word of complaint; the only noise heard was consumer groups back-slapping over their success over a global corporate to revert a recipe. Coincidentally, every single competitor product also has that similar “new recipe” vegetable fat ingredient at 5% inclusion. Similarly, all international products that have since flowed through those supply chains have had the international “new recipe”.

Ironically, Cadbury also faced backlash over the downsizing of blocks from 250g to 200g, a 20% downsizing in mass, yet was supported by a 21% reduction in retail price point. The consumer economically benefitted, however, this was also perceived as a multinational “ripping us off” by downsizing products. Interestingly, two years later, due to a global glut of cocoa butter, Cadbury increased the block size by 20g, 10%, with no cost to the consumer. Rare, though this may be, it was never lauded or celebrated as a company sharing the spoils of market conditions with its devoted consumers. Simply, Cadbury were unnecessarily pained through this period, though, they had delivered great customer and consumer economics.

So too, when a brewery tries to change our favourite beer’s alcohol level from 4.9%/vol to 4.8% or Arnott’s change Tim Tams to a lesser pack size or our tinned tomatoes get downsized to meet more optimal economic conditions, we cry blue murder.

It appears, if mass, or unit count or “alcohol” is reduced we automatically claim our favourite brands are ripping us off, though, they are trying to optimize shareholder returns against globally competitive pressures.

So, Cottee’s recently reduced their cordial concentrations by 20%. No retail price point change, the consumer overnight received 20% less bang for buck. But as concentration is not as simple for the consumer to “feel” as opposed to mass, count or “alcohol” . . . it slipped through to the keeper unnoticed. No blue murder, no public backlash, no pain of lost volume, disrupted supply chain or sales.

Well played Cottee’s, that’ll have directly improved ~15-18% operational margin and survival.