Tall, trim, impeccably dressed, with carefully considered answers that betray his legal training, and a fondness for management speak that marks him out as all-American, Todd Stitzer is every inch the CEO of a major, multinational company.
But Stitzer doesn't head just any listed company. He runs Cadbury, a British confectionery business that deals not only in sugar and chocolate commodities, but dinosaurs and gorillas. A place of fun and dreams, that (as the song goes) takes a sunrise, sprinkles it with dew, covers it in chocolate and a miracle or two.
So what's his favourite sweetie, I ask, at the end of a serious and lengthy interview that has touched on margin improvements, commodity prices, sustainability, trade investment, difficult investors, innovation and recession. And he starts out on a long, enthusiastic and slightly waffly answer. "I'm like a kid in a candy bar," he says. "I'm very fond of Crunchie. I first discovered them in Canada when I was based in the US and I was delighted every time I had to go back. But I like Fruit & Nut. I like Caramel. I like Bournville Dark."
As Stitzer continues to list his favourites - "I like sugar candy too," he remembers. "Maynards wine pastilles are a real favourite" - it also emerges that he's not a particular fan of Green & Black's chocolate (even though he bought the company for £20m in 2005), though he's partial, he says, to the butterscotch variant. "I've not got a very sophisticated European palate. I don't like chocolate with a high cocoa content."
It's a rather unwieldy answer to a relatively straightforward question. And on one level it's incongruous with the measured, rational, serious man in front of me.
On the other hand, a rogue investor like Nelson Peltz would doubtless have seized on his response as a symptom of the unwieldy business that Cadbury Schweppes itself had become when he called on the company to improve its margins and return a £1.7bn cashpile to investors without delay.
Vast, disparate, Stitzer and his team had built Cadbury into a global giant with diverse interests over the past 10 years, but investors such as Peltz saw, in the acquisition trail, a 'kid in a candy shop' mentality that had Stitzer buying up companies big and small - from organic chocolate brand Green & Black's to gum and candy manufacturer Adams - across the globe. With Dr Pepper/Seven Up, an enormous US-based soft drinks business, bolted on the side, the growth targets of 3% to 5% by Cadbury Schweppes in his first five-year tenure were deemed too slow and too unambitious, by analysts. What was to be done?
Stitzer's response was to decouple the soft drinks business earlier this year to focus on a confectionery-only business comprising chocolate, sugar and gum. The result was Cadbury plc. And with it came a radical restructuring of the business that will see 15% of the factories closed, along with the axing of 5,000 jobs (15% of the workforce) and a new structure that increases the number of direct reports into Stitzer increasing from four to seven, stripping out another layer of bureaucratic middle and senior management fat.
Stitzer denies that the progress until that point had been slow. "We completely agree [with Peltz] that we need to get our margin in a different place. But I think our credibility on margin improvement is very strong," he says, pointing to the improvement in margins at Adams against the backdrop of analyst scepticism following its acquisition by Cadbury in 2002. "In Adams we promised to take margins from 12% to high teens. We said we would do it in four years. We did it in three."
Gorilla suit not permitted
Describing his management style as "inclusive, focused and energetic" and believing that "people need to do things at pace", nevertheless, he says, putting together the pieces to deliver a global confectionery business is not an easy task. "It's a big job, multidimensional, and it demands patience, energy and hard work."
And just as Stitzer's somewhat stiff appearance can be deceptive (he wanted to present to investors in a gorilla suit earlier this year but was persuaded against it by his investor relations team), so it is with his attitude to change. An M&A lawyer based out of New York, Stitzer switched to sales and marketing to kickstart his progression at Cadbury, having joined as assistant general counsel. It was a transformational moment, as he went on to run first the Dr Pepper/Seven Up business, before moving to head up Cadbury itself.
Now, aiming to reinvent the business against the backdrop of increasing supermarket power, health concerns and recession - while carefully retaining and updating the principles that have guided the business since its foundation in 1824 - Stitzer is clearly confident that the changes are making a difference.
The move to a new UK and global HQ in unglamorous Uxbridge, which was "magically contemporaneous" with the corporate transition to a new entity, according to Stitzer, has been "tremendously energising", he says. Light, open, with the global team on one floor, and the UK (led by MD Trevor Bond) on the floor below, "it's a great facility". "Previously we were in this beautiful office building [in Berkeley Square, London] but it wasn't easy to work in. The speed of communication here is light years ahead. It's energising in a really visible way."
Margins raised to the high teens
And the strategy is going according to plan says Stitzer, with a 120 basis points improvement indicated at the group's third-quarter update. "The margin generation is moving along nicely."
As well as sales growth for the full year expected to be at the top end of a 4% to 6% range, Cadbury has "delivered up several activities every quarter - [such as] the move to Uxbridge, the closure of Keynsham and two Australian plants, the SKU reduction, the removal of management - that show real progress is being made".
And the arrival of new chairman Roger Carr appears to have accelerated the speed of change still further. Shareholders are starting to respond. The share price has risen by 24% off a year low of 445p in mid October. That's in marked contrast with other suppliers and indeed multiples that have seen their stocks continue to fall.
Of course it helps that Cadbury is in the business of confectionery. "We sell affordable treats. This is part of what makes Cadbury a resilient business." And charting the growth of chocolate value versus GDP (see left) suggests that "if other recessions are anything to go by, we are in a good position".
But the strategy itself is every bit as important, and 2007 also marked a shift in focus away from volume towards margin. This Easter, for example, Cadbury purposely reduced its promotions.
"It's easy to drive share unprofitably. If you give it away, customers are happy to take it. We've sought a different dynamic based on innovation and the launch of interesting new products.
Wispa "was not Facebook plot"
"If you look at the past 12 weeks, our chocolate singles share in the UK has really shone, because we have focused sales and innovation in chocolate. We've sold millions of Wispa bars: 12 million to consumers in four weeks, with three to four times that much on order on the back of excellent sales execution."
But is it so innovative to bring back Wispa, I ask. "The removal of Wispa wasn't my decision," says Stitzer. And he praises his marketing team for their "sensitive and insightful calls for Wispa's reintroduction" following a Facebook campaign.
So this wasn't a big marketing plot seeded via a Facebook page? "Absolutely not," Stitzer answers. "We originally said let's see how it works and we said let's in and out it." And he still won't commit to its long-term future. " I'm not convinced of what we'll do with it. But the success is pretty phenomenal. It's twice as much as Creme Egg Twisted, and that was twice as much as any [other launches in the confectionery] market," he claims.
Other innovation has included the spectacular UK rollout of Trident at the start of 2007, which has been followed up by four new flavours this year, including a chocolate and mint-flavoured gum that Stitzer describes as "a major bestseller". And there are two new chocolate bars in the Dairy Milk line-up, an apricot crumble and a cranberry granola.
Giving scale to smaller brands
Innovation only goes so far, however, in determining the success of a product. Where Cadbury can add value is by offering scale, taking the quintessentially English organic brand Green & Black's to the US and other markets, for example, while bringing The Natural Confectionery Company, a small Australian confectionery business acquired in 2002/03 to the UK, Ireland and New Zealand.
Not that scale automatically brings profit. Prior to Cadbury's acquiring Green & Black's, a part-time bookkeeper did the accounts. Today, a small army of big four-trained accountancy execs prepare them. "But that's part and parcel of the burdensome regulatory environment in which a public company operates," says Stitzer. "Small private entrepreneurial company are not subject to the same scrutiny."
"Where we score more highly," adds Stitzer, "is in execution." At Green & Black's, Cadbury reduced the number of SKUs. "We narrowed its focus. We tried to refocus on gifting, moulded and we also have ice cream and biscuits." It has since doubled in size, not including the US.
Like The Natural Confectionery Company, it is also "very profitable", according to Stitzer. "We have expanded its distribution into the most fertile territory. Our sales clout and access has gotten us wider coverage."
However, execution is not perfect, Stitzer admits. "We've gotta get smarter, to make innovation pay more quickly. But we're doing that, perfecting the product and the margin dynamic profile before we launch. Otherwise you can waste time and money."
Stitzer also admits to disappointment at the failure to establish penetration in countries such as Mexico and Brazil. "We tried in Mexico with Mr Big [which is a Canadian Cadbury brand] and our distribution was wonderful, but it's already a well-established market, and you need to fulfil a need. We haven't been able to do that."
Values and ideals
Where Stitzer is unequivocal, however, is on the subject of values and ideals. Of course, when you've got, on the one hand, an investor like Peltz on your tail, and unions criticising job losses, it's not easy to keep sight of the original Cadbury values.
Yet Stitzer is as driven by the social values of the company as he is by the bottom line. The son of a preacher, he buys absolutely and unequivocally into the idea that one can be 'performance-driven but values-led', as the Cadbury mantra has it, and believes the CSR message is as relevant as ever.
The redundancy programme is "very thoughtful, with lots of notice and retraining", but he's trying to tweak it, however. "We are the original corporate citizen, but we [are interpreting this now] in a modern context. We've made a huge commitment to CSR, investing £200m in the past six to seven years."
This, he explains, is not about sacking people nicely, but addressing issues such as climate change, sustainable agriculture and health, in addition to the constant themes in its 200-year history such as employee wellbeing and community investment. "We have embedded sustatinability as a core part of our business," says Stitzer.
And it's one of the surest signs yet of the wider transformation of Cadbury. On a new website, Dear Cadbury, the company is "more specific in our targets and how we measure our progress. And we're clearer in our goals, where we want to get to in the medium term."
The most startling of these goals, and an industry first, it claims, is Cadbury's commitment to reduce its carbon footprint by 50% by 2020 in absolute terms (ie regardless of volume growth). A reduction of 3.6% in 2007 shows it is well on the way.
Health
Stitzer also sees nothing wrong with Cadbury's sponsorship of the London Olympics 2012 and believes that, like its chocolate, Cadbury's support has provided a welcome comfort to the organisers and indeed the whole country. "We are a British company. We are about fun and games and are determined to get kids engaged in sport ."
Stitzer also defends Cadbury's record against attacks from the likes of Conservative Party leader David Cameron, who criticised the sale of Cadbury's chocolate bars at the tills of WH Smith.
"We'd never imagine that a consumer would eat a whole 200g bar. We offer shareable treats. And 100-calorie packs. And sugar-free gum. And sugar-free wine gums. What concerns me most is not the interference itself, it's the lack of a joined-up approach. Instead of different interest groups uniting, we get this fractured approach. The Government needs to act as a unifying force. If it is a crisis of epic proportions, people ought to focus on it as a crisis, and not let it splinter."
So will the next step be a low-fat chocolate as some have predicted. Stitzer admits it's the holy grail, in R&D terms. But "it's almost an oxymoron", he adds. "And you wouldn't be able to even call it chocolate."
But the NPD pipeline for the next two to three years is in good shape, he says. The restructuring is going according to plan. And the next step, he says, is to be the biggest and the best. "The financial markets make a big transaction - friendly or unfriendly - much less likely now," says Stitzer, referring to rumours of a merger with Hershey or a takeover by Kraft.
"Financing is a different dynamic. But whatever the economic climate, the best defence is executing against a plan. Our job is to deliver on plan." And by the looks of it, the Candy Man can.
But Stitzer doesn't head just any listed company. He runs Cadbury, a British confectionery business that deals not only in sugar and chocolate commodities, but dinosaurs and gorillas. A place of fun and dreams, that (as the song goes) takes a sunrise, sprinkles it with dew, covers it in chocolate and a miracle or two.
So what's his favourite sweetie, I ask, at the end of a serious and lengthy interview that has touched on margin improvements, commodity prices, sustainability, trade investment, difficult investors, innovation and recession. And he starts out on a long, enthusiastic and slightly waffly answer. "I'm like a kid in a candy bar," he says. "I'm very fond of Crunchie. I first discovered them in Canada when I was based in the US and I was delighted every time I had to go back. But I like Fruit & Nut. I like Caramel. I like Bournville Dark."
As Stitzer continues to list his favourites - "I like sugar candy too," he remembers. "Maynards wine pastilles are a real favourite" - it also emerges that he's not a particular fan of Green & Black's chocolate (even though he bought the company for £20m in 2005), though he's partial, he says, to the butterscotch variant. "I've not got a very sophisticated European palate. I don't like chocolate with a high cocoa content."
It's a rather unwieldy answer to a relatively straightforward question. And on one level it's incongruous with the measured, rational, serious man in front of me.
On the other hand, a rogue investor like Nelson Peltz would doubtless have seized on his response as a symptom of the unwieldy business that Cadbury Schweppes itself had become when he called on the company to improve its margins and return a £1.7bn cashpile to investors without delay.
Vast, disparate, Stitzer and his team had built Cadbury into a global giant with diverse interests over the past 10 years, but investors such as Peltz saw, in the acquisition trail, a 'kid in a candy shop' mentality that had Stitzer buying up companies big and small - from organic chocolate brand Green & Black's to gum and candy manufacturer Adams - across the globe. With Dr Pepper/Seven Up, an enormous US-based soft drinks business, bolted on the side, the growth targets of 3% to 5% by Cadbury Schweppes in his first five-year tenure were deemed too slow and too unambitious, by analysts. What was to be done?
Stitzer's response was to decouple the soft drinks business earlier this year to focus on a confectionery-only business comprising chocolate, sugar and gum. The result was Cadbury plc. And with it came a radical restructuring of the business that will see 15% of the factories closed, along with the axing of 5,000 jobs (15% of the workforce) and a new structure that increases the number of direct reports into Stitzer increasing from four to seven, stripping out another layer of bureaucratic middle and senior management fat.
Stitzer denies that the progress until that point had been slow. "We completely agree [with Peltz] that we need to get our margin in a different place. But I think our credibility on margin improvement is very strong," he says, pointing to the improvement in margins at Adams against the backdrop of analyst scepticism following its acquisition by Cadbury in 2002. "In Adams we promised to take margins from 12% to high teens. We said we would do it in four years. We did it in three."
Gorilla suit not permitted
Describing his management style as "inclusive, focused and energetic" and believing that "people need to do things at pace", nevertheless, he says, putting together the pieces to deliver a global confectionery business is not an easy task. "It's a big job, multidimensional, and it demands patience, energy and hard work."
And just as Stitzer's somewhat stiff appearance can be deceptive (he wanted to present to investors in a gorilla suit earlier this year but was persuaded against it by his investor relations team), so it is with his attitude to change. An M&A lawyer based out of New York, Stitzer switched to sales and marketing to kickstart his progression at Cadbury, having joined as assistant general counsel. It was a transformational moment, as he went on to run first the Dr Pepper/Seven Up business, before moving to head up Cadbury itself.
Now, aiming to reinvent the business against the backdrop of increasing supermarket power, health concerns and recession - while carefully retaining and updating the principles that have guided the business since its foundation in 1824 - Stitzer is clearly confident that the changes are making a difference.
The move to a new UK and global HQ in unglamorous Uxbridge, which was "magically contemporaneous" with the corporate transition to a new entity, according to Stitzer, has been "tremendously energising", he says. Light, open, with the global team on one floor, and the UK (led by MD Trevor Bond) on the floor below, "it's a great facility". "Previously we were in this beautiful office building [in Berkeley Square, London] but it wasn't easy to work in. The speed of communication here is light years ahead. It's energising in a really visible way."
Margins raised to the high teens
And the strategy is going according to plan says Stitzer, with a 120 basis points improvement indicated at the group's third-quarter update. "The margin generation is moving along nicely."
As well as sales growth for the full year expected to be at the top end of a 4% to 6% range, Cadbury has "delivered up several activities every quarter - [such as] the move to Uxbridge, the closure of Keynsham and two Australian plants, the SKU reduction, the removal of management - that show real progress is being made".
And the arrival of new chairman Roger Carr appears to have accelerated the speed of change still further. Shareholders are starting to respond. The share price has risen by 24% off a year low of 445p in mid October. That's in marked contrast with other suppliers and indeed multiples that have seen their stocks continue to fall.
Of course it helps that Cadbury is in the business of confectionery. "We sell affordable treats. This is part of what makes Cadbury a resilient business." And charting the growth of chocolate value versus GDP (see left) suggests that "if other recessions are anything to go by, we are in a good position".
But the strategy itself is every bit as important, and 2007 also marked a shift in focus away from volume towards margin. This Easter, for example, Cadbury purposely reduced its promotions.
"It's easy to drive share unprofitably. If you give it away, customers are happy to take it. We've sought a different dynamic based on innovation and the launch of interesting new products.
Wispa "was not Facebook plot"
"If you look at the past 12 weeks, our chocolate singles share in the UK has really shone, because we have focused sales and innovation in chocolate. We've sold millions of Wispa bars: 12 million to consumers in four weeks, with three to four times that much on order on the back of excellent sales execution."
But is it so innovative to bring back Wispa, I ask. "The removal of Wispa wasn't my decision," says Stitzer. And he praises his marketing team for their "sensitive and insightful calls for Wispa's reintroduction" following a Facebook campaign.
So this wasn't a big marketing plot seeded via a Facebook page? "Absolutely not," Stitzer answers. "We originally said let's see how it works and we said let's in and out it." And he still won't commit to its long-term future. " I'm not convinced of what we'll do with it. But the success is pretty phenomenal. It's twice as much as Creme Egg Twisted, and that was twice as much as any [other launches in the confectionery] market," he claims.
Other innovation has included the spectacular UK rollout of Trident at the start of 2007, which has been followed up by four new flavours this year, including a chocolate and mint-flavoured gum that Stitzer describes as "a major bestseller". And there are two new chocolate bars in the Dairy Milk line-up, an apricot crumble and a cranberry granola.
Giving scale to smaller brands
Innovation only goes so far, however, in determining the success of a product. Where Cadbury can add value is by offering scale, taking the quintessentially English organic brand Green & Black's to the US and other markets, for example, while bringing The Natural Confectionery Company, a small Australian confectionery business acquired in 2002/03 to the UK, Ireland and New Zealand.
Not that scale automatically brings profit. Prior to Cadbury's acquiring Green & Black's, a part-time bookkeeper did the accounts. Today, a small army of big four-trained accountancy execs prepare them. "But that's part and parcel of the burdensome regulatory environment in which a public company operates," says Stitzer. "Small private entrepreneurial company are not subject to the same scrutiny."
"Where we score more highly," adds Stitzer, "is in execution." At Green & Black's, Cadbury reduced the number of SKUs. "We narrowed its focus. We tried to refocus on gifting, moulded and we also have ice cream and biscuits." It has since doubled in size, not including the US.
Like The Natural Confectionery Company, it is also "very profitable", according to Stitzer. "We have expanded its distribution into the most fertile territory. Our sales clout and access has gotten us wider coverage."
However, execution is not perfect, Stitzer admits. "We've gotta get smarter, to make innovation pay more quickly. But we're doing that, perfecting the product and the margin dynamic profile before we launch. Otherwise you can waste time and money."
Stitzer also admits to disappointment at the failure to establish penetration in countries such as Mexico and Brazil. "We tried in Mexico with Mr Big [which is a Canadian Cadbury brand] and our distribution was wonderful, but it's already a well-established market, and you need to fulfil a need. We haven't been able to do that."
Values and ideals
Where Stitzer is unequivocal, however, is on the subject of values and ideals. Of course, when you've got, on the one hand, an investor like Peltz on your tail, and unions criticising job losses, it's not easy to keep sight of the original Cadbury values.
Yet Stitzer is as driven by the social values of the company as he is by the bottom line. The son of a preacher, he buys absolutely and unequivocally into the idea that one can be 'performance-driven but values-led', as the Cadbury mantra has it, and believes the CSR message is as relevant as ever.
The redundancy programme is "very thoughtful, with lots of notice and retraining", but he's trying to tweak it, however. "We are the original corporate citizen, but we [are interpreting this now] in a modern context. We've made a huge commitment to CSR, investing £200m in the past six to seven years."
This, he explains, is not about sacking people nicely, but addressing issues such as climate change, sustainable agriculture and health, in addition to the constant themes in its 200-year history such as employee wellbeing and community investment. "We have embedded sustatinability as a core part of our business," says Stitzer.
And it's one of the surest signs yet of the wider transformation of Cadbury. On a new website, Dear Cadbury, the company is "more specific in our targets and how we measure our progress. And we're clearer in our goals, where we want to get to in the medium term."
The most startling of these goals, and an industry first, it claims, is Cadbury's commitment to reduce its carbon footprint by 50% by 2020 in absolute terms (ie regardless of volume growth). A reduction of 3.6% in 2007 shows it is well on the way.
Health
Stitzer also sees nothing wrong with Cadbury's sponsorship of the London Olympics 2012 and believes that, like its chocolate, Cadbury's support has provided a welcome comfort to the organisers and indeed the whole country. "We are a British company. We are about fun and games and are determined to get kids engaged in sport ."
Stitzer also defends Cadbury's record against attacks from the likes of Conservative Party leader David Cameron, who criticised the sale of Cadbury's chocolate bars at the tills of WH Smith.
"We'd never imagine that a consumer would eat a whole 200g bar. We offer shareable treats. And 100-calorie packs. And sugar-free gum. And sugar-free wine gums. What concerns me most is not the interference itself, it's the lack of a joined-up approach. Instead of different interest groups uniting, we get this fractured approach. The Government needs to act as a unifying force. If it is a crisis of epic proportions, people ought to focus on it as a crisis, and not let it splinter."
So will the next step be a low-fat chocolate as some have predicted. Stitzer admits it's the holy grail, in R&D terms. But "it's almost an oxymoron", he adds. "And you wouldn't be able to even call it chocolate."
But the NPD pipeline for the next two to three years is in good shape, he says. The restructuring is going according to plan. And the next step, he says, is to be the biggest and the best. "The financial markets make a big transaction - friendly or unfriendly - much less likely now," says Stitzer, referring to rumours of a merger with Hershey or a takeover by Kraft.
"Financing is a different dynamic. But whatever the economic climate, the best defence is executing against a plan. Our job is to deliver on plan." And by the looks of it, the Candy Man can.
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