A while back I wrote a commentary on the book Building Brand Authenticity by Michael Beverland. In it, he explored what “authenticity” means to a brand, and if its something that can be created or, rather, something that must be earned.
Well, a confrontation is playing out in the US that has pitted two chocolate brands—US-based Hershey’s and UK’s Cadbury—in a battle that’s testing the notion of what brand authenticity is.
This tale starts in 1988 when Cadbury sold its US candy operations to Hershey’s for $300 million. As part of the deal, Hershey’s would make and market Cadbury-branded products in the US under the same familiar names that were so popular in the UK.
Sounds reasonable at first, at least to shareholders and accountants. But fast forward 27 years and you can see how these “sell-part-of-your-brand” deals rarely play out successfully.
Essentially, Cadbury sold the right to market its own brand. And if you’ve ever compared the two products side-by-side, you know what I’m talking about when I say that while they may look similar, what’s in the wrapper just isn’t the same.
If you look at the ingredients of the US versus the UK versions, Hershey’s Cadbury lists sugar as the first ingredient. With the UK Cadbury, the first ingredient is milk. The US version also has a collection of ingredients intended to improve shelf life. And the difference goes on as you work your way down the labels. It’s not hard to see why the UK version simply tastes better.
Small retailers across the US have for decades realized that this was a marketing opportunity and sold the UK version to chocolate lovers who wanted the real deal. Not surprisingly, some larger chains in the US also caught on and started selling them too. And larger means, well, just that. Larger. As in revenue. Enter the lawyers.
This all came to a head when Hershey’s successfully blocked the sale of all UK-made Cadbury’s in the US. So now, no UK Cadbury’s will be sold in the US. Period.
So what’s the lesson here?
First, hindsight is a terrific gift in the world of business. Cadbury in the eighties really blew the chance to itself grow the brand in the States. Hershey’s and Mars had 70% of the market share at that point and Cadbury didn’t see how it could possibly break through. So, the organization chased the dollars (er, pounds) and went for the short-term earnings boost.
Hershey’s then started monkeying with the recipes to better suit its needs while continuing to market under the same brand names. Does that make Hershey’s the bad guy? Of course not. It bought the right to do exactly that. Does it make Cadbury a victim? Hardly. Cadbury was the one that cut the deal.
The lesson we all can learn is that brand authenticity and consistency greatly matter. In the corporate world of “making the quarterly numbers,” it’s very tempting to make deals and agreements that are driven by short-term financial gains that don’t take into account long-term brand authenticity ramifications.
In the consumer world, high-level brands will create “dumbed down” versions that can be sold in stores like Target. Case in point: I love to cook, and am a sucker for kitchen gadgets and cookware. I was in a Target about a year ago and noticed that there was a Target version of Calphalon, a brand of which I have several pieces and greatly like. Fast forward. The Calphalon for Target version is nowhere near the quality of the “real” Calphalon, and I have to admit that it has changed my perception of the brand overall. Is it worth watering down—in effect changing—the authenticity of the brand for a new single sales channel?
Brand authenticity is something that first needs to be recognized, and then greatly protected. Sometimes it can run counter to the quarterly financial objectives of a company, but it’s something that needs to be carefully assessed to avoid these brand mash-ups down the road.
So, next time you see a Cadbury Flake at 7-11, you can think how aptly named, and inauthentic, it really is.