UK: MANAGEMENT TODAY PROFILE - CADBURY SCHWEPPES'S CHIEF EXECUTIVE DAVID WELLINGS. - Cadbury Schweppes's chief executive has been there before but this time it's different - tougher, less insular. He wants to ensure it a seat at the international table.

by Julia Thrift.
Last Updated: 31 Aug 2010

Cadbury Schweppes's chief executive has been there before but this time it's different - tougher, less insular. He wants to ensure it a seat at the international table.

When is a chief executive not a chief executive? Well, try it round the other way. When a chief executive is, is he - beyond peradventure - a chief executive? Better ask Cadbury Schweppes. A year ago, when Dominic Cadbury moved into the chairman's seat previously occupied by Sir Graham Day, he retained (not nominally, it's true, but quite specifically) a full-time executive role in the company. Yet David Wellings, head of the group's confectionery side who was promoted to fill the slot vacated by Cadbury, also assumed his predecessor's title of chief executive. An executive chairman plus a separate CEO? Does this imply an overlapping of powers or a separation of roles? Prima facie, it looks like a matter for Dominic's elder brother Sir Adrian, who was himself - at different times - chairman and managing director of Cadbury Schweppes.

But they don't spend too much time on the metaphysics of corporate governance down at the company's head office in Berkeley Square. Wellings wafts the anomaly away with a puff of common sense. 'Broadly, how it works is that Dominic's role is running the board and turning his face outside the business, to be the interface of the business with the community outside.' Wellings' own job is 'to generate the required performance. So my face is - if you like - turned inside.' Yet it's clear that the high-profile executive chairman and his less well-known chief executive need to be bound by an umbilical cord. They must be imbued with common values, be compatible in style and share common perceptions of, and ambitions for, the group. No problem there, according to Sir Graham Day: 'Operationally there would be very little difference between them.' A one-time managerial colleague of both Cadbury and Wellings is more emphatic. 'Dominic Cadbury is not the sort of man who would feel happy with a chief executive whose style differed markedly from his own - Wellings and Cadbury see very much eye-to-eye,' believes this spectator. This could be one reason, perhaps, for the preferment of Wellings - over such potential rivals as Frank Swan, a veteran of Schweppes of pre-merger days and formerly Wellings' coequal as the managing director on the beverages side.

Wellings himself refuses to speculate on such matters. For a moment his customary urbanity appears unsettled. But then he adds, with a self-deprecation which friends say is typical: 'There are certainly people within the business doing a similar job to the one I was doing, and there are certainly people outside this business, who, as a detached observer, I would have thought could have done a much better job.' Says the former colleague, 'Wellings would always say that he's not the brightest person in the team'. It was not necessarily self-effacement, he adds unkindly, more 'an accurate assessment'. Wellings' strength, he insists, lies in implementation.

In some ways Cadbury and Wellings are fairly equally matched. At 53, Wellings is his chairman's junior in age by just seven months. In other ways they may be more complementary than alike. Wellings is not, according to the erstwhile colleague, 'a strategic visionary, but he'd probably make sure that he had people around him who were.' He is determined, it's said, a good team builder, and his marketing background 'shines through'. As non-family he obviously lacks the noblesse obligations, along with the Eton and Cambridge traditions, of the Cadburys. (Wellings is Manchester Grammar and Oriel, where he read modern languages.) But his commitment to the corporate culture of business responsibility and care for employees is as great as anybody's.

Wellings' close association with Dominic Cadbury dates from 1986, when he was recruited to run Cadbury Ltd - the confectionery arm - but his knowledge of the company goes much further back. He first joined it in Birmingham back in 1962, soon after coming down from Oxford, and did the rounds, starting as a salesman 'on the road' and coming to rest in the marketing department, as a product group manager. The Cadbury Brothers of the '60s was a different animal from the acquisitive multinational that is Cadbury Schweppes today. 'There was very much a family atmosphere,' Wellings recalls. 'Bourneville was not just a working environment, it was a working and living environment.' Nevertheless, after half-a-dozen years Wellings moved on, in search of breadth of experience, no doubt, and certainly for the betterment of his pocket and family. In the early '70s he found himself running a food-processing business, called Northray Foods, in Lincolnshire. This was a learning experience quite unlike Cadbury's, for Northray was a subsidiary of ITT and brought Wellings into direct contact with the US conglomerate's almost legendary chairman, Harold Geneen. 'It was management by provocation,' Wellings says. 'Not by terror, but by putting you in a position where you were defending everything you had.' From time to time, he would be hauled off to Brussels where ITT had its European HQ. 'It was a bit like the inquisition. You really did come out feeling that you were glad to escape, and to be still alive.' Through the early '80s Wellings was responsible, mostly as managing director or chairman, for a succession of food manufacturing companies under the banner of Imperial Group, firms with historically strong brand names like Ross Foods, Golden Wonder, Lea and Perrins. By mid-decade, when Hanson launched his bid for Imperial, he had moved into the centre, as business development director of Imperial Foods. The success of the bid meant an uncomfortable time for Wellings, among many others. Yet he is notably reserved in his comments.

'This is purely personal,' he says, 'and shouldn't in any sense be interpreted as critical of Hanson ... But the business philosophy and modus operandi of a Hanson-type operation was not really what I wanted to do. The Hanson organisation tends to buy and shape businesses over time. I suppose I am a business builder. I like to take what I've got, I like as few rules as possible, and at the end of the day I like to be able to produce something which has grown and evolved organically into something which is different - and of value.' Having decided that the time had come for a change, he was grateful enough to be headhunted.

He had never thought of returning to his original employer, but when the opportunity came he leapt at it. Cadbury itself had been through a change process. The merger with Schweppes had taken place in 1969, and the company had become less insular, less traditional. 'It had acquired an edge, a professionalism,' says Wellings. Indeed, the conversion of Cadbury Schweppes into a tougher, more competitive and internationally focused business was in full progress when he arrived, for Dominic Cadbury had been appointed chief executive three years earlier. Nevertheless, what Wellings calls 'the good characteristics' of the former Cadbury Brothers remained.

He lists these characteristics: openness, easy access to management, lack of ceremony, a genuine concern about people and a determination to deal with them fairly. Strangely, in view of its conscious espousal of high ethical standards, Cadbury Schweppes is not included in any of the major 'ethical' unit trusts - but the fact leaves Wellings unperturbed. 'My relationship with the consumer is the thing that bothers me,' he says. 'If Cadbury's was regarded as an unethical company by the consumer then I would be devastated, because I think it would weaken the brands. Secondly, I am totally concerned that people who work in this organisation see us as an ethical company - if they don't then they'll leave it.' These days Wellings works from a sunny room in the listed part of the company's head office overlooking Berkeley Square - but he's often not there. (When he is, he occasionally indulges a favourite pastime, twitching: he keeps binoculars handy, and - in the absence of a nightingale - can sometimes pick out a tree creeper in the square's gardens.) At other times he's likely to be travelling the world, preaching the corporate gospel. 'I think it's the job of the people who run it (a business) to get about and communicate the strategy and the message of today.' That strategy is now entirely focused on two markets: confectionery and non-cola fizzy drinks. All other businesses were sold off during the '80s. The two surviving streams - as they are called - are run quite separately. 'As far as the beverages stream is concerned,' says Wellings, 'our aim is to be the world's number one non-cola company.' On the confectionery side, Cadbury Schweppes aims to compete as an equal with Nestle and Mars. Hence all the acquisition activity of recent years. In the past 14 months the group has taken on board a French chocolate manufacturer, Bouquet D'Or, and 80% of another in Argentina; also A and W Brands, a US soft drinks producer, plus 20% of a second, Dr Pepper.

The acquisitions helped to lift group turnover by 10% last year, to over £3.7 billion, while pre-tax profits were up 25% at £416 million. However, progress towards Cadbury's twin peaks has been by no means smooth. On the confectionery side of the house, at least, the strategy was shaped as a result of a sharp lesson learned in the late '80s, when Cadbury's set out to become a household name in the US by competing directly with the Hershey company. (The Hershey brand occupies much the same place in the American public mind as Cadbury's in Britain.) The attempt was an expensive failure. It ended in 1988 when the company withdrew from the market, and sold rival Hershey a licence to make Cadbury's products in the US. The fiasco severely shook Cadbury Schweppes's standing in the City. Since then, its strategy has been to take control of confectionery producers abroad, and to develop its own brands. It no longer hopes to educate the world to love the name Cadbury's.

On the drinks side there is currently some uneasiness about where the group is going in the US. Last year's buy of A and W Brands brought it well under 1% of the American soft drinks market. Dr Pepper, with 10% of the $47 billion market, is now 25%-owned by Cadbury Schweppes. However, the US board has been able to prevent any increase in this holding. Meanwhile, Wellings has to make the best of a bad job. The US soft drinks market is in for 'a pretty fundamental restructuring', he predicts. 'And what our 25% of Dr Pepper gives us is a seat at the table.' A seat at the table is the intention behind Cadbury Schweppes's involvement in Camelot, one of the consortia contending for Britain's National Lottery. Wellings reckons that the lottery will become 'the largest single consumer product in the UK'. Lottery tickets will be sold through the same sorts of outlets as chocolate bars and fizzy drinks - and the lottery looks set to revolutionise these outlets. 'We believe that it will be better to be at the table when the revolution takes place, rather than on the outside, looking in.'.

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