When an item loses its fizz the end result can be somewhat flat, but since confectionery manufacturer Cadbury spun off and sold all parts of Schweppes, the drinks company known for its carbonated mixers and Dr Pepper, it has been on an upward trajectory.

Cadbury recorded a 35 per cent increase in underlying profits from operations to £638 million last year. And, even if the effects of currency changes are stripped out, the figure is still up an impressive 22 per cent.

Consumers, it seems, gravitate towards brands they know and love in difficult times, and a bar of chocolate remains an affordable treat even if they are cutting back on other non-essential spending.

Chocolate also plays out well in a recession as people buy multipacks, stock up the larder and stay at home. Chewing gum, by contrast, can suffer as it is stocked in convenience stores, garage forecourts and airports, which are associated with travelling.

Globally, Cadbury’s worldwide sales rose by five per cent last year, driven by an 11 per cent gain in sales for Dairy Milk, 11 per cent rise in Trident chewing gum and nine per cent upturn in Halls cough drops.

It also enjoyed a strong second half in Britain, boosted by the relaunch of the Wispa bar (after a highly successful online campaign; one million bars were sold by Sainsbury’s in its first week) and the new Crème Egg Twisted. Cadbury increased its share of the British chocolate market by 0.5 per cent, taking it to a wispa away from 30 per cent, and almost back to the levels recorded before the company was hit by a salmonella scare two years ago, which led to a costly product recall and £1 million fine.

Market share increased despite a 40 per cent upturn in the price of cocoa, the main ingredient in chocolate, which forced the company to raise prices last year.

Some of Cadbury’s success is undoubtedly due to its clever advertising in recent years. Chief executive Todd Stitzer has conceded that, initially, he was uncertain that an advertisement featuring a gorilla drumming along to the Phil Collins’ ballad, In the Air Tonight, would have much impact on sales.

But the campaign went viral, becoming the most successful advertisement of 2007 with 91 per cent awareness among British consumers, and boosted Dairy Milk sales by nine per cent, helping Cadbury restore a reputation damaged by the salmonella debacle.

This year, Cadbury hopes its £3.7million newest campaign, dubbed Eyebrows, in which two children move their eyebrows in tune to Freestyle’s Don’t Stop the Rock, an electro track first released 24 years ago. Since it premiered on January 29, the advert has been watched more than four million times online, prompted more than 50 video responses on YouTube and inspired a parody, featuring singer of the moment Lily Allen, on Channel 4’s Sunday Night Project.

It is no wonder Stitzer calls it "pretty efficient for what you invest and what you get out of it", adding: "We played it once and the Internet took over."

This year Stitzer, who describes Cadbury as "recession resilient, not recession-proof", believes his target growth rate of four per cent to six per cent is achievable, albeit towards the lower end. This still looks impressive in the current economic environment.

But frivolous advertising aside, much of Cadbury’s success is down to Stitzer’s ‘Vision into Action’ cost cutting plan, which was unveiled in June 2007. Non-core businesses are being sold. The group headquarters have relocated from costly central London, while the problem of overstaffing and inefficient manufacturing sites is being addressed. For example, in the 1990s a workforce of 12,000 produced 50,000 tons of chocolate a year. By the end of last year, 1,000 workers produced 120,000 tons. The supply chain in each trading market is also under scrutiny.

It is about growing margins. Stitzer is looking to achieve a trading margin in the mid-teens by 2011. Reported margins rose 1.8 per cent last year to 11.9 per cent, which implies there is still some way to go.

There is also a clear focus on sales growth. The global confectionery market is worth about £100 billion, but developing markets are growing at much slower rates than developing markets. This is borne out in the latest results, where growth in developed markets was four per cent but 12 per cent overall in developing markets. India recorded 23 per cent growth, South America 18 per cent and South Africa 20 per cent, indicating the huge future potential.

Cadbury is looking to take five or ten innovative ideas in each of its three categories – chocolate, gum and candy – from one market, and apply them to the other. Stitzer calls it "efficiency of scale and consistency of thought".

The final part of its strategy is to secure cocoa supplies. Unlike other commodities, the price of cocoa is still rising (although the impact has been partly offset by falling milk prices) partly because producers are pulling out of the market.

Last year Cadbury launched its Cadbury Cocoa partnership. Over the next ten years, it will invest up to £50million in cocoa-growing villages, families and non-governmental agencies in Ghana (where it sources 70 per cent of its cocoa), Indonesia, India and the Dominican Republic to encourage sustainable farming and persuade families to maintain their holdings.

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