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Why the Cadbury crown may be slipping

Aside from the impact on the local economy, the closure of the Cadbury factory in Dunedin could do serious damage to its brand in New Zealand, says TRA's Colleen Ryan.

For the people of Dunedin, the closing of the Cadbury production plant has a tangible impact. For the rest of New Zealand, it is the intangible impact on the brand that Cadbury will need to consider. Their products will still be available in New Zealand, albeit made overseas, and no one really doubts the ability of overseas producers to knock out perfectly adequate batches of Pineapple Lumps but how people view the brand is another matter.


Our take on where New Zealanders stand on this (and at TRA we talk to nearly 3000 people every year in some type of qualitative open-ended discussion) is that the global cultural currents swirling around the world and filtered through the New Zealand landscape are having an impact on what people want and expect from the companies they are customers of.

While our institutions haven’t fared as badly as others in the western world, we are nevertheless seeing a rise in conversations around brand transparency, accountability, and trust. People are talking about this in many different ways and the patterns we are detecting are accreting around taking responsibility (for sustainable practices, for example), being honest and transparent (owning up when things go wrong) and behaving in a way that deserves respect and trust (communicating what you stand for and behaving accordingly). Behaving like a Kiwi in fact.

New Zealanders believe that their national character is inherently trustworthy, honest and does the right thing, leading to a culture of helping out your mates, doing your civic duty, low crime rates and fairness in the workplace. There is pride that international reports rank us highly on criteria such as being a non-corrupt place to do business, and we were of course early to grant women the vote and to legalise same-sex marriage. All in all, we see ourselves as a owning the high moral ground of decency.

New Zealand’s brands benefit significantly from this. They acquire these underlying Kiwi characteristics by right. Brands strongly associated with being 'New Zealand’ get around having to prove they are trustworthy and an embodiment of the Kiwi values. Even start-ups get a leg up in this regard, but for longstanding Kiwi brands, this inherent Kiwi decentness becomes part of the fabric of what the brand stands for. All they can do is screw it up. And their ability to use their get out of jail card when they do screw up will depend on how they handle it and how strong the brand is in people’s minds.

From our many interactions with people through research projects, what we are hearing is an elevated level of passion around the integrity of brands and companies – no matter what the focus of the research project, it’s a conversation that crops up a lot. But we are also hearing a grounded and pragmatic conversation about these issues. Companies have to make money – making money is ok, being greedy isn’t; companies employ people just like me – if customer service staff are rude and unhelpful there’s something wrong with the employee’s experience in that company; companies are imperfect just like human beings – companies are allowed to make occasional mistakes, it’s whether you own it and how you deal with it that matters. And being Kiwis we give companies the benefit of the doubt, especially if they have worked consistently to establish their brand in our hearts and minds. We all trust people we know more than those we are only loosely acquainted with.

Look at Volkswagen. That was a serious screw-up. You’d have to have thought the brand couldn’t survive. The reality is that they have suffered a drop in sales, but not a cataclysmic one – by far the biggest cost is the lawsuits. They are surviving because of the strength of the brand built by years of consistent brand story, by being crystal clear what they stand for and making sure everyone knows it, and being instantly recognisable. That kind of consistency earns trust and it's trust that VW needs to rebuild, not even rational trust that they won’t cheat on their engineering but emotional trust that they won’t disappoint people again.

It’s trust that Cadbury potentially may have damaged. They are a brand deeply ingrained into New Zealand society so there was an underlying trust, a belief that Kiwis had always supported them and they would in turn support Kiwis – we were mates. So it’s not about whether the product will be as good if it’s made offshore, it’s whether the brand will retain our trust and what Cadbury will do to convince us that they deserve it.

Colleen Ryan is head of strategy at TRA.
This story first appeared at StopPress.