Chocolate Wars: The 150-Year Rivalry Between the World's Greatest Chocolate Makers (23 page)

“I think I can say with a pretty high degree of certainty that the majority, if not all, of the Swiss chocolate makers, have tried to copy me,” Peter proudly told his new board. “All have had to give up!” The only product still in the running was a treacly milk chocolate paste, manufactured by the Anglo Swiss Condensed Milk Company, that was no match for the quality of Peter’s goods.

With resources now dedicated to ramping up production and advertising, orders rushed in from across Europe. In the first six months of trading in 1895, Peter’s sales doubled to ten tons of chocolate. The business was such a success that he and his team decided to recapitalize the company at a million Swiss francs, and they opened a second factory, which doubled their production capacity. The milk chocolate that had been a novelty luxury fifteen years earlier was becoming widely available, and no export market had a sweeter tooth than Britain.

British grocers took to Swiss chocolate as they had taken to Dutch cocoa: They could not get enough of it. But the English Quaker chocolate makers could not fathom how the product was made. It was a conjuring trick; no clues given. Those who had wrestled long to make this particular “food of the Gods” had no intention of disclosing the recipe.

Daniel Peter was not the only Swiss chocolatier whose secret was becoming legendary. When Rodolphe Lindt built his unique conching plant at his factory in Berne, he had ensured that only a few of his workers had the key to the door. As the years passed with no one able to top the quality of his chocolate, the mystique and intrigue surrounding his special process caught the public’s imagination. A German magazine,
Gordian
, published an article in 1899 inviting readers to guess Rodolphe Lindt’s special recipe. The magazine was inundated with letters. Did Lindt have a new type of grinding machine to
crush his beans to a finer texture? Did he beat his chocolate mixture for longer? Could it be the addition of essential oils like peppermint? No one had the answer.
Gordian
’s editorial team pronounced their verdict: Lindt’s secret would never be known.

But Rodolphe Lindt, the gentleman entrepreneur, was in a selling mood. His business partnership with another Berne confectioner, Jean Tobler, had fallen through. Lindt, now almost fifty, was approached with other offers. The Stollwercks in Germany offered as much as 3 million marks. But in 1899, Lindt opened the door of his conching plant to another Swiss manufacturer: Johann Rudolf Sprüngli of Zurich. Sprüngli had made a canny offer. Lindt would receive 1.5 million Swiss francs—a small fortune worth roughly 100 million Swiss francs today—and be a director in their new joint venture.

Johann Rudolf Sprüngli, described in company literature as a shy man, was anything but reticent when it came to business decisions. Shortly after inheriting his share of the Sprüngli chocolate business from his father, he initiated a rapid expansion program that culminated in his moving the family firm from cramped headquarters in the old town of Zurich to a new, modern factory on the shores of Lake Zurich by the railway at Kilchberg. The following year he joined forces with Lindt. Their new company, Chocoladefabriken Lindt and Sprüngli, was a force to be reckoned with. For Rudolphe Lindt, it was a far cry from his inauspicious start in fire-damaged buildings in Berne. Together they were about to scale up the production of some of the most acclaimed chocolate in the world.

In Britain during the 1890s, cocoa changed from being a product that only a few could afford to a product that was on every household shopping list. Cocoa consumption more than doubled over the decade, from 20 million to 43 million pounds. But it was the continental
chocolatiers with the miracle of chocolate fondant and milk chocolate that were poised to collect.

The Quaker firms had established a clear lead over their English rivals. The Taylor Brothers and Dunn and Hewitt of London watched as their profits slid. There were newcomers, especially in confectionery. John Mackintosh of Halifax launched his toffee and confectionery business with a £50 loan, and it was worth £15,000 ten years later. Terry of York prospered at its Clementhorpe works on the River Ouse, producing a considerable range of chocolates and sweets alongside the company’s traditional candied fruits and peels. But during the 1890s, Fry, Cadbury, and Rowntree were the dominant players in cocoa and chocolate.

By 1895, Fry had sales of £932,292. Cadbury was close behind with sales of £706,191, and now there was heady talk: How long before they caught up with Fry or even overtook them? Both firms were among Britain’s largest employers: Cadbury with 2,600, and Fry with over 4,000. After a prolonged struggle, Rowntree was at last making headway. Their sales of £190,328 in 1895 had more than tripled over ten years, and they were narrowing the gap between them and the two leading Quaker chocolate firms. The prodigious appetite for pastilles continued to grow and was complemented by the successful launch in 1893 of Rowntree’s clear fruit gums
.
But Joseph Rowntree knew his Cocoa Elect was struggling next to established brands of pure cocoa, and he had a huge investment underway in Haxby Road. As he made the transition from a family firm into a large-scale manufacturer, his personal notes reveal he watched the foreign competition anxiously.

To take on the Europeans, Joseph Rowntree took the unusual step of approaching Joseph Storrs Fry II and the Cadbury brothers to discuss some form of collaboration. The English Quaker firms had much in common and were soon discussing policy on a number of issues. For example, at the time, shopkeepers could charge what they liked for a product, sometimes overpricing chocolate to increase their profits or underpricing to undercut a competitor. The Quaker firms wanted shops across the country to sell at the price that was printed on the label: Six pence on the packet meant shopkeepers
had to sell at six pence. By uniting on such issues, the Quaker firms aimed to guarantee that distributors received good margins but that they could not go above them to the detriment of their companies’ chocolate sales.

Their informal discussions on discounts and shop displays during 1895 ensured that a price war or a margin war did not break out between the English Quaker firms. In discussing pricing and advertising strategies, they hoped to fend off the European giants. But Dutch and Swiss sales were strong, and the fast-growing Nestlé Company was waiting in the wings: The battle lines were being drawn for Europe’s Chocolate War, with the unsuspecting British consumer the prize. The winners in this financial jeopardy would be those who could devise the most irresistible chocolate mouthfuls to woo and win the English palate. As the European chocolate firms lined up to do battle to produce ever more luscious concoctions of chocolate and cream, a newcomer appeared on a different continent with a plan for a chocolate enterprise that could dwarf the contest in Europe.

In 1893, Chicago was host to a great exhibition: The Columbian Exposition. Twenty-seven million visitors showed up to view the most exciting inventions of the industrial world: engine-powered vehicles, electric lights, telephones, brand new household creations of every description. Among the crowds, one man kept returning to the machinery building: Milton Snavely Hershey.

There was one stall in particular that caught his eye. A German manufacturer, J. M. Lehmann of Dresden, displayed his latest designs for making chocolate. Lehmann had a long-standing reputation for the quality of his machinery. In fact, it was his firm that provided the engineering know-how that helped Van Houten develop his first cocoa press. Now Lehmann unveiled something that intrigued Hershey: a chocolate factory in miniature. The raw beans were roasted
and then crushed by granite rollers, producing an aromatic stream of chocolate liquor. Sugar, cocoa butter, and flavorings were added before the mix was set in molds. Hershey was mesmerized, taking in every step of the process. After pondering this deeply for some time, he then turned to his cousin, Frank Snavely: “Frank,” he declared, “I’m going to make chocolate!”

Hershey knew that American cocoa imports, although modest compared to Europe, were rising fast. Europeans were consuming 100 million pounds of chocolate per year—while Americans only consumed 25 million pounds—an amount that had almost tripled in ten years
.
Yet in just a generation, with immigration and rapid pace of progress, America was becoming the greatest industrial power in the world—outproducing Germany, France, and Britain combined. America’s vast mass market would surely wake up and smell the chocolate.

Hershey was a gambling man, and by the 1890s, he felt he was on a winning streak. After fourteen years of ceaseless labor, two failed businesses, and a lawsuit, things were finally going his way.

He had come a long way from the turmoil of 1886 in New York. After borrowing $10,000 to help fund the sale of the cough drops his father so believed in, he found he was unable to repay the loan. Every day as he had labored in his basement enterprise by the elevated railway, the gulf between what he could make in profit and his escalating debt widened. According to one sad tale in the Hershey archives, in a last determined bid to raise the money, Milton hired a horse and wagon. With the cart brimming over with sweets and cough drops, Hershey went out in search of new customers. When he entered a sweetshop, a gang of youths looking for some fun put firecrackers under the wagon. Milton emerged from the shop to see his terrified horse bolting up the street, the wildly veering wagon scattering its precious load in all directions. Stripped of hope that he would meet the deadline to make a partial payment on his $10,000 loan, he sold everything and went home to Pennsylvania.

This second failure proved decisive. His determination to succeed channelled steely grooves through his personality. He had learned so much, why work for someone else when he could try
again? Unfortunately he found his own resolve was equally matched by that of his mother’s family. No more money was forthcoming. The charming youth who had carried all their hopes of fifteen years ago had been transformed into the twenty-nine-year-old man, greying prematurely, who was a bitter disappointment. Money was not available. Not so much as a penny.

In 1886, with no capital available, it was back to basics for Milton Hershey. He believed in his new recipe for caramels. It bore a remarkable similarity to the recipe he had learned in Denver, Colorado, using milk instead of paraffin to create the creamy chew. No one on the East Coast was making a caramel quite like it. Hershey started once more, peddling his sweet dream from a pushcart around the streets of Lancaster, Pennsylvania.

This time, people came back for more. He couldn’t make them fast enough. The sales made it possible for him to rent workspace in a warehouse. He had to share it with noisy neighbors—a carriage works and a piano manufacturer among others. But he had room for his kettles and sugar stores. Once again his mother and his Aunt Mattie came to help with wrapping the sweets. As word spread, in a stroke of extraordinary luck, a British traveller passing through town in 1887 placed a big order for caramels to ship to England. Hershey duly set off to the banks in Lancaster to secure a loan to buy equipment to fulfill the deadline. No one would back him.