Cadbury’s parent expands production at Bournville

Cadbury parent Mondelēz International is to expand production at the confectioner’s Bournville base for the first time since it invested £75m to upgrade facilities at the plant.

Mondelēz has taken the decision to introduce Cadbury Dairy Milk Oreo and Cadbury Dairy Milk Tiffin to the new production lines.

The announcement came as the parent revealed it was set to take a 3% hit to its Q2 performance as a result of the worldwide ransomware attack on June 27 (see below).

Glenn Caton, President of Northern Europe for Mondelēz International, said: “Cadbury Dairy Milk Oreo and Cadbury Dairy Milk Tiffin are the first additional products we are welcoming to Bournville following our multi-million pound investment in the UK.

“It shows that our investment has paid off and that Bournville is now competing in the Premier League of European factories.”

Cadbury Dairy Milk Oreo is a recent innovation by the chocolate maker; the product has never been made in Bournville before. It combines Mondelēz’ best selling cookie brand with the Dairy Milk choclate.

The Bournville plant will produce around 28 million of the new bars a year. The introduction is being made now so the brand can be launched in the autumn.

Cadbury Dairy Milk Tiffin was recently tested as a limited edition to mark the 80th anniversary of its original launch. The test has proved to be popular enough for the company to commit to full-scale production, which will see 20,000 of the bars produced every hour.

Mr Caton said the commitment demonstrated two of Mondelēz’ strengths: bringing innovative new treats to market and listening to what the consumer wanted.

Mondelēz has invested more than £200m into UK manufacturing, research and invention since its acquisition of Cadbury’s in 2010. This includes the £75m investment at Bournville, which has resulted in the installation of four new production lines.

An additional £18m has been spent on research and development, where Bournville also serves as the group’s Global Chocolate Centre of Excellence.

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The company said it believed the June 27 attack, which impacted production at a plant in Australia, had been contained and it was making good progress in restoring systems across the business.

“We believe the issue has been contained and a critical majority of the affected systems are up and running again,” it said in a statement.

“Given the timing of this significant global attack, despite our best efforts, we experienced disruption in our ability to ship and invoice during the last four days of our second quarter.  There are a few markets where we have permanently lost some of that revenue due to holiday feature timing, but we expect we will be able to recognise the majority of these delayed shipments in our third quarter results.

“Our preliminary estimate of the revenue impact of this event is a negative 300 basis points on our second quarter growth rate.”

It said it was maintaining its prediction of full year organic revenue growth of at least 1%.

“We expect to incur incremental one-time costs in both our second and third quarters as a result of this issue, but our underlying margin progress continues to be in line with our outlook of mid-16 percent for the full-year,” it added.