Victorian era Rowntree's was founded in 1862 at
Castlegate, in
York, by
Henry Isaac Rowntree, a
Quaker, as the company manager bought out the
Tuke family. In 1864, Rowntree acquired an old iron foundry at Tanner's Moat for £1,000, and moved production there. In 1869, the factory was staffed by 12 men. By 1869, Rowntree was in financial difficulties and his brother,
Joseph Rowntree, joined him in full partnership, and H.I. Rowntree & Co was formally established. This success allowed the company to invest in a
Van Houten press, which enabled it to produce chocolate with the cocoa butter removed, to compete with Cadbury's successful Cocoa Essence. In the 1890s, Rowntree transformed from a small family business into a large-scale manufacturer, as sales more than quadrupled due to an increased demand among the public for confectionery. In 1889,
Seebohm Rowntree established a small research and testing laboratory for analysing ingredients and rival company products. In 1890, to cater for this increased demand, Rowntree acquired a 20-acre site at Haxby Road on the outskirts of York. The Tanner's Moat site had become too small for Rowntree's needs, and the company had noted the success of Cadbury's purpose-built factory in
Bournville. By 1897, the unlimited partnership needed external funding for its expansion, and became a public
limited liability company called Rowntree & Co. 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. 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. 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. From 1931, Rowntree of Canada began to manufacture
Mackintosh toffees under licence. 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. Thompson undertook extensive market research to discover what consumers wanted. In May 1935, Rowntree launched the
Aero, an aerated milk chocolate. The Chocolate Crisp, a wafer-and-chocolate bar later known as the
Kit Kat, was also launched in 1935.
After Eight thin mint chocolates were launched in 1962. That same year, Rowntree entered into a long-term agreement with
Hershey whereby Hershey would produce Rowntree products under license in the US. In the same year, the board attempted to diversify the business, and made a bid for
Bovril, but lost out to
James Goldsmith's
Cavenham Foods. Strategically, Nestlé had always seen Rowntree as a perfect fit for its own operations. 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. However, Nestlé still had to honour Rowntree's perpetual licensing agreement for Hershey to produce Kit Kat, Rolo, and other products in the United States. The agreement includes a "change of control" clause, allowing Nestlé to regain the US rights if Hershey is sold. Between 1988 and 1994, the Nestlé Rowntree workforce was reduced by 2,000. The Nestlé Rowntree factory in
Norwich closed in 1994, and
Rolo, Yorkie, and Easter-egg production was moved to York. In September 2006, it was announced that the manufacture of Smarties would 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. and in April 2012, another new jelly sweet, Fruit Bottles, both under the Rowntree's brand. 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 doubled in size following a £7 million investment. ==Current branded products==