Change to Creme Egg recipe costs Cadbury $13m

Foil-wrapped Cadbury Creme Eggs move along the production line at the company's factory in Birmingham. Photo / Getty Images

The makers of Cadbury Creme Eggs have suffered multi-million dollar losses after a controversial change to their chocolate recipe last year.

A new report shows that Cadbury is gearing up for a spring offensive as cracks have begun to appear in its dominance of the Easter egg market in the UK.

Research by analysts IRI for trade magazine The Grocer found that the brand's best-selling Easter lines lost more than £10 million in sales last year, narrowing its market share from 42 per cent to 40 per cent.

The report says that the Creme Egg was the biggest loser after US owner Mondelez sparked a storm of protest across Britain by replacing the Dairy Milk in its recipe with cheaper chocolate. Filled and shell Creme Eggs lost more than £6 million ($13 million), said the study.

However, Mondelez insists that the recipe change did not have an impact.

Marketing manager Claire Low told The Grocer: "The fundamentals of Cadbury Creme Egg remain exactly the same. It's simply not the case that Creme Egg has always been made with Cadbury Dairy Milk."

But the report says that Creme Egg was not the only casualty. Sales of Cadbury Egg 'n' Spoon, launched in 2012, crashed by £1.2 million as average prices fell by nearly a fifth, partly as a result of fiercer deals and strong growth for own label and the discounters.

Low acknowledged that with this Easter the earliest since 2008, recovering lost sales would be a tall order.

"We are aware shorter seasons can be challenging," she told the magazine. "To strengthen our positioning, we will continue to invest in power brands, launching new seasonal products and a brand new Easter pack design."

The Grocer said that competition is heating up with Mars' January launch of Galaxy Golden Eggs, its extension of the Malteaster bunny range with a new family pack and Ferrero's launch of Kinder Joy among notable new product developments.

Ferrero customer development director Levi Boorer said: "Spring represents a £139 million sales opportunity for chocolate, with three key gifting occasions."

A Cadbury spokesman said: "The fundamentals of the Cadbury Creme Egg remain exactly the same as the original in 1971 recipe with delicious Cadbury chocolate and a unique gooey creme filling. In fact, only six out of 45 years of gooey history saw the shell made with Cadbury Dairy Milk.

"Cadbury remains the number one treat at Easter. The Easter 'season' changes every year depending on when Easter falls. It was two weeks shorter in 2015 than 2014 so it's hard to compare like for like.

"This is why most of the big chocolate brands show a fall in revenue for 2015 against 2014. We are proud to be the nation's favourite at Easter and we will continue to strengthen our position by investing in power brands and launching new seasonal products."