Rowntree's is an English confectionery business based in
Founded in 1862, the company developed strong associations with
In 1862, Rowntree's was founded at Castlegate, York by
In 1881, Rowntree introduced
In 1890, to cater for this increased demand, Rowntree acquired a 20-acre site at Haxby Road on the outskirts of York. The Tanners Moat site had become too small for Rowntree's needs, and the company had noted the success of Cadbury's purpose-built factory in
Robert Fitzgerald has accused the company of being slow in new product development and marketing compared to its major competitor of the period, Cadbury. Fitzgerald suggests that Joseph Rowntree imitated the successes of competitors, (Cadbury's Cocoa Essence, French fruit pastilles) and that under his leadership, the company did not introduce any innovations of its own.
In 1899, Rowntree introduced its first
Rowntree had struggled to make a milk chocolate product of comparable quality or value to Cadbury's Dairy Milk. Joseph Rowntree even described the growing market for milk chocolate as a fad. Rowntree's poor performance in the category became a major problem from 1914 onwards, as British public preference continued to move towards milk chocolate, and away from the more bitter cocoa essence products. Rowntree's two major rivals, Cadbury and Fry, merged in 1918, and although Rowntree was invited to partake in the merger, the company declined to do so. Meanwhile, the Rowntree board was torn as to whether it should become a low-turnover, high-quality product company or a mass producer of cheaper lines. Seebohm Rowntree inherited a struggling company when he succeeded his father as chairman in 1923. By 1930, as a result of all its problems, Rowntree was approaching bankruptcy.
In 1927, the company began to market its fruit gums, and its pastilles from 1928, in the now familiar tube packaging.
George Harris was appointed marketing manager for chocolate bars in January 1931. Harris had learned the latest marketing techniques while he was in the United States. According to Robert Fitzgerald, "It was Harris's drive and insight which inspired his firm's renaissance in the 1930s." In 1932, Rowntree appointed a new advertising agency, the London branch of
In January 1935, Rowntree decided to abandon its attempt to compete with Cadbury Dairy Milk. In May 1935, Rowntree launched the
In 1969, the Rowntree board rejected a £37 million takeover bid from
In 1971, Rowntree Mackintosh acquired
In 1978, the Hershey contract was renegotiated, giving Hershey the rights to the Kit Kat and Rolo brands in the US in perpetuity.
Kenneth Dixon was appointed as chairman and chief executive in 1981. Between 1981 and 1987, Rowntree invested nearly £400 million in upgrading its manufacturing facilities and developing high-volume, product-dedicated equipment for several of the company's leading global brands, including Kit Kat, After Eights, and Smarties.
Between 1983 and 1987, Rowntree spent nearly £400 million on acquisitions, including
Between 1982 and 1987, the number of UK staff was reduced from 19,700 to 15,600.
In 1987, Rowntree operated 25 factories in nine countries and employed 33,000 people, including close to 16,000 in its eight UK operations. Group turnover was £1.4 billion, with the UK and Ireland accounting for 40% of the total.
On 13 April 1988, the Swiss confectioner
Nestlé eventually won control with an offer valuing Rowntree at £2.55 billion. Strategically, Nestlé had always seen Rowntree as a perfect fit for its own operations. Nestlé had strength in the block chocolate bar business, and Rowntree had strength in the countline branded chocolate business. Rowntree's strong global brands were the key reason for Nestlé's interest. Due to potential synergies between the two companies, Nestlé believed that savings between 5 and 15% of Rowntree's operating costs could be made if the companies were to combine.
The takeover was controversial, as Nestlé was effectively protected from similar takeover attempts under Swiss law. After the Nestlé takeover, the Rowntree chocolate ranges began to use the branding "Nestlé Rowntree", before eventually the Rowntree name was dropped from the packaging altogether, except on Rowntree's Cocoa and the Fruit Pastilles and Fruit Gums lines. The Mackintosh branding was dropped from all former Rowntree Mackintosh products except for Mackintosh's Toffee.
In the six years following the takeover, the Nestlé Rowntree workforce was reduced by 2,000. The Nestlé Rowntree factory in
In September 2006, it was announced that the manufacture of Smarties was to be relocated to Hamburg, resulting in 645 job losses at the York factory. Production of Dairy Box was relocated to Spain, and Black Magic to the Czech Republic.
Nestlé has invested more than £200 million in the Rowntree business since 1988, making the York site one of the world's largest confectionery factories. Nestlé's global research centre for confectionery is also based in York, and recently doubled in size following a £7 million investment.