Is it bitter, or is it sweet? Will it fizz or fizzle? In an effort to cut expenses, Britain's Cadbury Schweppes (NYSE:CSG) announced that it will reduce its workforce by 10% and close 20% of its factories.
While Cadbury's brands are familiar, many face daunting competition. Soft drinks Dr. Pepper, 7-Up, and of course, Schweppes Ginger Ale have great name recognition and die-hard fans (Dr. Pepper springs to mind as one with a cultish following), yet Cadbury lags cola giants Coca-Cola (NYSE:KO) and Pepsi-Co (NYSE:PEP).
Cadbury is also behind a variety of other well-known products, including many household names. Among them, Snapple, Hawaiian Punch, Mott's, Orangina, Halls, Dentyne, Trident, and of course, its chocolate, including that rather odd but strangely pleasing Easter Bunny delivery, the Cadbury Creme Egg.
Speaking of sweets, Cadbury's confections segment competes with the likes of gum giant Wrigley (NYSE:WWY), which was covered last week, and chocolate manufacturer Hershey (NYSE:HSY).
As unpleasant as job cuts are, perhaps some streamlining and cost cutting will put some fizz back into Cadbury's flat financials. Back in June, the company reported flat sales and expects the job cuts and factory closures to put $678.2 million into its coffers by 2007.
The market seems to agree -- somewhat. The stock ended up 1.14%, or $0.31, to $27.39 on Monday. The important thing to watch is whether moves like these will help Cadbury sweeten enthusiasm -- and sales -- for its products.
Alyce Lomax welcomes your feedback at [email protected].
