Ben & Jerry’s Homemade, Inc.

P.O. Box 240
Waterbury, Vermont 05676
U.S.A.
(802) 244-6957
Fax: (802) 244-5944

Public Company
Incorporated: 1978
Employees: 446
Sales: $132 million
Stock Exchanges: New York
SICs: 2024 Ice Cream & Frozen Desserts; 6794 Patent Owners & Lessors; 5812 Eating Places

Ben & Jerry’s Homemade, Inc. produces super premium ice cream, frozen yogurt, and ice cream novelties in rich and original flavors. The company sells its unique offerings in grocery stores, restaurants, and franchised ice cream shops, and it holds about one-third of the market for its products. Started by two friends who never intended to become big businessmen, Ben & Jerry’s is distinguished by a corporate philosophy that stresses social action and liberal ideals in addition to profit making, and is known for innovative and creative marketing devices that express this unorthodox spirit.

Ben & Jerry’s was founded in May 1978, when Ben Cohen and Jerry Greenfield opened an ice cream shop in Burlington, Vermont. Cohen had been teaching crafts, and Greenfield had been working as a lab technician when the two decided that “we wanted to do something that would be more fun,” as Greenfield later told People magazine. In addition, the two wanted to live in a small college town. In 1977, they moved to Burlington, Vermont, and completed a five dollar correspondence course in ice cream making from Pennsylvania State University. With $12,000 in start-up money, a third of which they borrowed, the two renovated an old gas station on a corner in downtown Burlington and opened Ben & Jerry’s Homemade.

The first Ben & Jerry’s store sold 12 flavors, made with an old fashioned rock salt ice cream maker and locally produced milk and cream. Initially, ice cream production ran into some glitches. “I once made a batch of rum raisin that stretched and bounced,” Greenfield told People. With time, however, the pair’s rich, idiosyncratic, chunky offerings such as Dastardly Mash and Heath Bar Crunch gained a loyal following. In the summer of 1978, Ben & Jerry inaugurated the first of the many creative marketing ploys that would help drive the growth of their company when they held a free summer movie festival, projecting films onto a blank wall of their building.

By 1980, Ben & Jerry had begun selling their ice cream to a number of restaurants in the Burlington area. Ben delivered the products to customers in an old Volkswagen squareback station wagon. On his delivery route, he passed many small grocery and convenience stores and decided that they would be a perfect outlet for their products. In 1980, the pair rented space in an old spool and bobbin factory in Burlington and began packaging their ice cream in pint-size cartons with pictures of themselves on the package. “The image we wanted was grass roots,” Cohen later told People.

The popularity of Ben & Jerry’s products brought the company growth, despite the laissez-faire attitude of its two proprietors. At one point, the two were forced to close the doors of their store for a day to devote themselves to sorting out paperwork. In 1981, Ben & Jerry’s expanded its pint-packing operations to more spacious quarters behind a car dealership. Shortly thereafter, the company opened its second retail outlet, a franchise on Route 7 in Shelburne, Vermont.

Despite its exclusively local operations, Ben & Jerry’s first gained national attention in 1981 when Time magazine hailed its products as “the best ice cream in the world” in a cover story on ice cream. In the following year, Ben & Jerry’s began to expand its distribution beyond the state of Vermont. First, an out-of-state store opened, selling Ben & Jerry’s products in Portland, Maine. Then, the company began to sell its pints in the Boston area, distributing their goods to stores through independent channels. At the same time, Ben & Jerry’s continued its policy of promoting itself through unique and whimsical activities. In 1983, for instance, the company took part in the construction of the world’s largest ice cream sundae in St. Albans, Vermont.

With its continuing expansion, Ben & Jerry’s developed a need for tighter financial controls on its operations, and the company’s founders brought in a local nightclub owner with business experience to be chief operating officer. As sales grew sharply, Cohen and Greenfield slowly came to realize that their small-scale endeavor had exceeded their expectations. They were not entirely happy about this unexpected success. “When Jerry and I realized we were no longer ice cream men, but businessmen, our first reaction was to sell,” Cohen told People magazine. “We were afraid that business exploits its workers and the community.”

Ultimately, Cohen and Greenfield did decide to keep the company, but they vowed not to allow the growth of their enterprise to overwhelm their ideas of how a business could be a force for positive change in a community. “We decided to adapt [the company] so we could feel proud to say we were the businessmen of Ben & Jerry’s,” Cohen concluded. Among the stipulations they made to ensure that their company would be different from other parts of corporate America was a salary cap, limiting the best-paid people in the company to wages just five times higher than those of the lowest-paid employees. As Ben & Jerry’s grew, this unusual limitation would complicate the company’s high-level staffing.

To finance further growth, Greenfield and Cohen decided to raise capital to expand by selling stock to the public. However, in an effort to maintain a sense of local accountability in the company, they limited the stock offering to residents of Vermont, utilizing a little-known clause of the state law governing stocks and brokering. With the proceeds from this sale of stock, the company began construction of a new plant and corporate headquarters in Waterbury, Vermont, about half an hour away from Burlington.

As Ben & Jerry’s products continued to garner attention, its prime competitor in the premium ice cream market, Haagen-Dazs, took steps to protect its own share of the market. In 1984, Pillsbury, Haagen-Dazs’ corporate parent, threatened to withhold its products from distributors who also sold Ben & Jerry’s ice cream. Ben & Jerry’s retaliated by filing suit against Pills-bury, and also by launching a publicity campaign with the slogan “What’s the Doughboy Afraid Of?” Pillsbury took steps to restrict distribution again in 1987, when it threatened to stop selling its ice cream to retailers who also sold Ben & Jerry’s products. In both cases, legal action brought the restrictive practices to an end. By the end of 1984, sales of Ben & Jerry’s products had exceeded $4 million, a figure more than twice as large as the previous year’s revenues.

In 1985, Ben & Jerry’s expanded distribution of its products dramatically, starting up sales of its pints in New York, New Jersey, Pennsylvania, Virginia, Washington, D.C., Georgia, Florida, and Minnesota. To supply these new markets, the company completed work on its modern manufacturing plant. Among the new offerings that year was New York Super Fudge Chunk, created at the suggestion of a customer from New York City. Throughout 1985, sales of Ben & Jerry’s products continued at a break-neck pace. By the end of the year, revenues had reached $9 million, an increase of 143 percent from 1984. As part of their program to remain true to their ideals, Cohen and Greenfield established the Ben & Jerry’s Foundation to fund community oriented projects. In addition to the Foundation’s initial capitalization, the two pledged 7.5 percent of the company’s annual pre-tax profits to the charity.

In 1986, facing demand for its products that its one Vermont plant was unable to meet, Ben & Jerry’s contracted with Dreyer’s Grand Ice Cream, an ice cream company located in the Midwest, to manufacture Ben & Jerry’s ice cream in its plants and distribute its products in most markets outside the Northeast. In addition, the company introduced its newest pint flavor, Coffee Heath Bar Crunch.

To promote this and other flavors, as well as the corporate identity, Ben & Jerry’s began conducting tours of its Water-bury, Vermont, plant in 1986. In addition, the company launched its “Cowmobile,” an altered mobile home that Cohen and Greenfield set out to drive across the country, distributing free scoops of ice cream as they went. Four months into the trip, the Cowmobile burned to the ground outside Cleveland without causing any injuries, bringing the planned expedition to a premature end. These efforts had pushed company sales to $20 million by the end of 1986, as Ben & Jerry’s continued to post a remarkable rate of growth.

Cohen and Greenfield’s original plan for a cross country trip was brought to fruition in 1987, when “Cow II” made its maiden voyage, dispensing free scoops of ice cream along the way. After the October 1987 stock market crash, Cow II appeared on Wall Street to hand out scoops of “That’s Life” and “Economic Crunch” ice cream to financial industry workers. Along with these highly topical creations, Ben & Jerry’s introduced pints of “Cherry Garcia,” named for the long-time lead guitarist of the rock group Grateful Dead. In addition, the company began to market its first ice cream novelty, the Brownie Bar. This product consisted of a square of French Vanilla ice cream, sandwiched between two brownies.

At their manufacturing plant in Vermont, Ben & Jerry’s also took steps to keep the company in compliance with its ideal of being a unique enterprise. To reduce its impact on the environment, Ben & Jerry’s began using its ice cream waste to feed pigs being raised on a farm in Stowe, Vermont. In addition, to keep plant employees happy, the company instituted a variety of gestures, including Elvis day and Halloween costume celebrations, to break the monotony of life in a factory. By the end of 1987, company revenues had increased again, to reach $32 million.

In 1988, Ben & Jerry’s opened its first outlets outside the United States when ice cream shops began operating in Montreal, Quebec and in St. Maarten in the Caribbean. By the end of the year, more than 80 “scoop shops” were flying the Ben & Jerry’s banner across 18 different states. At this time, the company decided to hold back on further franchising to make sure that product quality and service in its existing stores met its standards.

Also in 1988, Ben & Jerry’s responded to continuing growth in demand for the company’s products by opening its second manufacturing facility in Springfield, Vermont. This plant was used to make ice cream novelties, including the “Peace Pop,” a chocolate covered ice cream bar on a stick. The name of this product referred to “One Percent for Peace,” a nonprofit group founded in part by Cohen and Greenfield that was dedicated to redirecting national resources towards peace.

To aid in running their own company, Cohen and Greenfield with their employees formulated a three-part statement of mission that was designed to sum up the company’s unique corporate philosophy. Relying on a theory of “linked prosperity,” the mission statement asserted that Ben & Jerry’s had a product mission, a social mission, and an economic mission. The company hoped to use this credo to enhance the lives of individuals and communities through its actions. As part of its philosophy of linked prosperity, Ben & Jerry’s introduced several new flavors of ice cream that incorporated ingredients from special sources. Rainforest Crunch, marketed in 1989, used nuts produced by rain forest trees. Chocolate Fudge Brownie, brought out in February 1990, used brownies made at a bakery in New York where formerly unemployed and homeless people worked.

Beginning in the late 1980s, Ben & Jerry’s joined the trend toward producing low-fat ice cream and yogurt. Ben & Jerry’s Light, introduced in 1989, had reduced levels of fat and cholesterol compared to the regular Ben & Jerry’s ice cream, but no less fat than other “regular” products then on the market. “It was sort of an oxymoron,” the company’s chief financial officer admitted to the Wall Street Journal. Sales of the products never exceeded about $9 million, and in December 1991 the line was declared a mistake and phased out.

Ben & Jerry’s frozen yogurt proved far more successful. Boasting a butterfat content between one and five percent—as opposed to the 17 percent butterfat levels in the regular ice cream—Ben & Jerry’s yogurt was selling in 13 cities around the United States in 1992. Within five months, yogurt sales were accounting for 15 to 18 percent of the company’s revenues, and by the end of the year, it had become the leader in the super premium yogurt market. In addition, Ben & Jerry’s introduced a pint version of one of its most popular scoop shop offerings, chocolate chip cookie dough. The company had spent five years finding a way to get the chunks of dough into pints of ice cream without having them stick together and gum up the packaging machines. The product was an immediate hit, and soon became the company’s best-selling flavor. Finally, the company began to market its ice cream novelties, Peace Pops and Brownie Bars, in “multi-paks” in supermarkets.

In response to continuing demand for its new products, Ben & Jerry’s moved to increase its output in Vermont. The company added a pint production line at its Springfield plant, and also borrowed space at the St. Alban’s Cooperative Creamery to open another temporary production facility. To increase its capacity over the long term, Ben & Jerry’s broke ground on a third ice cream factory in St. Alban’s in late 1992. Financed through an additional stock offering, this plant was scheduled to be functional in 1994. In addition, the company completed a new distribution center in Bellows Falls, Vermont. Ben & Jerry’s also renewed its co-packing agreement with Dreyer’s Grand Ice Cream, Inc., its Midwestern partner. By the end of 1992, Ben & Jerry’ sales overall had reached $132 million, up from $77 million in 1989.

Further from home, Ben & Jerry’s opened two ice cream shops in the Russian cities of Petrozavodsk and Kondopoga. With two Russian partners, the company had spent three years navigating the Soviet bureaucracy and finding supplies for the venture, which Cohen and Greenfield hoped would promote friendship between Russians and Americans. After lining up reliable sources of cream and importing equipment, the company was able to open a combination ice cream plant and parlor, which was blessed by a Russian Orthodox priest on its first day.

As Ben & Jerry’s moved into the mid 1990s, it could look back on a streak of extraordinary growth. From one small shop in downtown Burlington, Vermont, it had grown to include a chain of nearly 100 franchised shops, and a line of products sold in stores across the country. Company leaders were aware that it was unlikely that this rate of expansion could continue forever, since Ben & Jerry’s growth had come in a mature and stable market. With its idiosyncratic corporate culture, and its strong track record of introducing innovative flavors that drove ever-stronger sales, however, it appeared that Ben & Jerry’s was well positioned to continue its success.

Further Reading:

Alexander, Suzanne, “Life’s Just a Bowl of Cherry Garcia for Ben & Jerry’s,” Wall Street Journal, July, 1992.

Hubbard, Kim, “For New Age Ice Cream Moguls Ben and Jerry, Making ’Cherry Garcia’ and ’Chunky Monkey’ Is a Labor of Love,” People, September 10, 1990.

—Elizabeth Rourke

Ben & Jerry’s Homemade, Inc.

30 Community Drive
South Burlington, Vermont 05403-6828
U.S.A.
Telephone: (802) 846-1500
Fax: (802) 846-1555
Web Site: http://www.benjerry.com

Wholly-Owned Subsidiary of Unilever United States, Inc.
Incorporated: 1978 as Ben & Jerry’s Homemade
Employees: 850
Sales: $237.04 million (1999)
NAIC: 31152 Ice Cream and Frozen Dessert Manufacturing

Ben & Jerry’s Homemade, Inc. produces superpremium ice cream, frozen yogurt, and ice cream novelties in rich and original flavors, loaded with big chunks of cookies and candy. The company uses natural ingredients almost exclusively and insists its diary suppliers not use bovine growth hormone on their herds. The company’s plant in Waterbury, Vermont, is the single most popular tourist attraction in the state.

Ben & Jerry’s has been distinguished by a corporate philosophy that stresses social action and liberal ideals in addition to profit making. Its innovative and creative marketing devices have further expressed this unorthodox spirit. When confronted with a declining market for superpremium ice cream, its founders turned increasingly to professional managers and finally sold out to Unilever, which promised to maintain Ben & Jerry’s traditional values while taking the brand to new heights.

Earthy Origins

Ben & Jerry’s was founded in May 1978, when Ben Cohen and Jerry Greenfield opened an ice cream shop in Burlington, Vermont. Cohen had been teaching crafts, and Greenfield had been working as a lab technician when the two decided that “we wanted to do something that would be more fun,” as Greenfield later told People magazine. In addition, the two wanted to live in a small college town. In 1977, they moved to Burlington, Vermont, and completed a five dollar correspondence course in ice cream making from Pennsylvania State University. With $12,000 in start-up money, a third of which they borrowed, the two renovated an old gas station on a corner in downtown Burlington and opened Ben & Jerry’s Homemade.

The first Ben & Jerry’s store sold 12 flavors, made with an old-fashioned rock salt ice cream maker and locally produced milk and cream. Initially, ice cream production ran into some glitches. “I once made a batch of rum raisin that stretched and bounced,” Greenfield told People. With time, however, the pair’s rich, idiosyncratic, chunky offerings such as Dastardly Mash and Heath Bar Crunch gained a loyal following. In the summer of 1978, Ben & Jerry inaugurated the first of the many creative marketing ploys that would help drive the growth of their company when they held a free summer movie festival, projecting films onto a blank wall of their building.

By 1980, Ben & Jerry had begun selling their ice cream to a number of restaurants in the Burlington area. Ben delivered the products to customers in an old Volkswagen squareback station wagon. On his delivery route, he passed many small grocery and convenience stores and decided that they would be a perfect outlet for their products. In 1980, the pair rented space in an old spool and bobbin factory in Burlington and began packaging their ice cream in pint-size cartons with pictures of themselves on the package. “The image we wanted was grass roots,” Cohen later told People.

The popularity of Ben & Jerry’s products brought the company growth, despite the laissez-faire attitude of its two proprietors. At one point, the two were forced to close the doors of their store for a day to devote themselves to sorting out paper-work. In 1981, Ben & Jerry’s expanded its pint-packing operations to more spacious quarters behind a car dealership. Shortly thereafter, the company opened its second retail outlet, a franchise on Route 7 in Shelburne, Vermont.

Going National in 1982

Despite its exclusively local operations, Ben & Jerry’s first gained national attention in 1981 when Time magazine hailed its products as “the best ice cream in the world” in a cover story on ice cream. In the following year, Ben & Jerry’s began to expand its distribution beyond the state of Vermont. First, an out-of-state store opened, selling Ben & Jerry’s products in Portland, Maine. Then, the company began to sell its pints in the Boston area, distributing their goods to stores through independent channels. At the same time, Ben & Jerry’s continued its policy of promoting itself through unique and whimsical activities. In 1983, for instance, the company took part in the construction of the world’s largest ice cream sundae in St. Albans, Vermont.

With its continuing expansion, Ben & Jerry’s developed a need for tighter financial controls on its operations, and the company’s founders brought in a local nightclub owner with business experience to be chief operating officer. As sales grew sharply, Cohen and Greenfield slowly came to realize that their small-scale endeavor had exceeded their expectations. They were not entirely happy about this unexpected success. “When Jerry and I realized we were no longer ice cream men, but businessmen, our first reaction was to sell,” Cohen told People magazine. “We were afraid that business exploits its workers and the community.”

Ultimately, Cohen and Greenfield did decide to keep the company, but they vowed not to allow the growth of their enterprise to overwhelm their ideas of how a business could be a force for positive change in a community. “We decided to adapt the company so we could feel proud to say we were the businessmen of Ben & Jerry’s,” Cohen concluded. Among the stipulations they made to ensure that their company would be different from other parts of corporate America was a salary cap, limiting the best-paid people in the company to wages just five times higher than those of the lowest-paid employees. As Ben & Jerry’s grew, this unusual limitation would complicate the company’s high-level staffing.

To finance further growth, Greenfield and Cohen decided to raise capital to expand by selling stock to the public. However, in an effort to maintain a sense of local accountability in the company, they limited the stock offering to residents of Ver-mont, utilizing a little-known clause of the state law governing stocks and brokering. With the proceeds from this sale of stock, the company began construction of a new plant and corporate headquarters in Waterbury, Vermont, about half an hour away from Burlington.

As Ben & Jerry’s products continued to garner attention, its prime competitor in the premium ice cream market, HaagenDazs, took steps to protect its own share of the market. In 1984, Pillsbury, Haagen-Dazs’s corporate parent, threatened to with-hold its products from distributors who also sold Ben & Jerry’s ice cream. Ben & Jerry’s retaliated by filing suit against Pills-bury, and also by launching a publicity campaign with the slogan “What’s the Doughboy Afraid Of?” Pillsbury took steps to restrict distribution again in 1987, when it threatened to stop selling its ice cream to retailers who also sold Ben & Jerry’s products. In both cases, legal action brought the restrictive practices to an end. By the end of 1984, sales of Ben & Jerry’s products had exceeded $4 million, a figure more than twice as large as the previous year’s revenues.

In 1985, Ben & Jerry’s expanded distribution of its products dramatically, starting up sales of its pints in New York, New Jersey, Pennsylvania, Virginia, Washington, D.C., Georgia, Florida, and Minnesota. To supply these new markets, the company completed work on a modern manufacturing plant. Among the new offerings that year was New York Super Fudge Chunk, created at the suggestion of a customer from New York City. Throughout 1985, sales of Ben & Jerry’s products continued at a break-neck pace. By the end of the year, revenues had reached $9 million, an increase of 143 percent from 1984. As part of their program to remain true to their ideals, Cohen and Green-field established the Ben & Jerry’s Foundation to fund community-oriented projects. In addition to the Foundation’s initial capitalization, the two pledged 7.5 percent of the company’s annual pre-tax profits to the charity.

Farming Out in 1986

In 1986, facing demand for its products that its one Vermont plant was unable to meet, Ben & Jerry’s contracted with Dreyer’s Grand Ice Cream, an ice cream company located in the Midwest, to manufacture Ben & Jerry’s ice cream in its plants and distribute its products in most markets outside the North-east. In addition, the company introduced its newest pint flavor, Coffee Heath Bar Crunch.

To promote this and other flavors, as well as the corporate identity, Ben & Jerry’s began conducting tours of its Water-bury, Vermont, plant in 1986. In addition, the company launched its “Cowmobile,” a converted mobile home that Cohen and Greenfield set out to drive across the country, distributing free scoops of ice cream as they went. Four months into the trip, the Cowmobile burned to the ground outside Cleveland without causing any injuries, bringing the planned expedition to a premature end. These efforts had pushed company sales to $20 million by the end of 1986, as Ben & Jerry’s continued to post a remarkable rate of growth.

Company Perspectives:

Ben & Jerry’s is dedicated to the creation and demonstration of a new corporate concept of linked prosperity. Our mission consists of three interrelated parts.

Products: To make, distribute and sell the finest quality all natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products.

Economic: To operate the Company on a sound financial basis of profitable growth, increasing value for our share-holders, and creating career opportunities and financial rewards for our employees.

Social: To operate the Company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad community—local, national, and international.

Underlying the mission of Ben & Jerry’s is the determi-nation to seek new and creative ways of addressing all three parts, while holding a deep respect for individuals inside and outside the company and for the communities of which they are a part.

Cohen and Greenfield’s original plan for a cross country trip was brought to fruition in 1987, when “Cow II” made its maiden voyage, also dispensing free scoops of ice cream along the way. After the October 1987 stock market crash, Cow II appeared on Wall Street to hand out scoops of “That’s Life” and “Economic Crunch” ice cream to financial industry workers. Along with these highly topical creations, Ben & Jerry’s introduced pints of “Cherry Garcia,” named for the long-time lead guitarist of the rock group Grateful Dead. In addition, the company began to market its first ice cream novelty, the Brownie Bar. This product consisted of a square of French Vanilla ice cream, sandwiched between two brownies.

At their manufacturing plant in Vermont, Ben & Jerry’s also took steps to keep the company in compliance with its ideal of being a socially responsible enterprise. To reduce its impact on the environment, Ben & Jerry’s began using its ice cream waste to feed pigs being raised on a farm in Stowe, Vermont. In addition, to keep plant employees happy, the company instituted a variety of gestures, including Elvis day and Halloween costume celebrations, to break the monotony of life in a factory. By the end of 1987, company revenues had increased again, to reach $32 million.

International in 1988

In 1988, Ben & Jerry’s opened its first outlets outside the United States when ice cream shops began operating in Montreal, Quebec, and in St. Maarten in the Caribbean. By the end of the year, more than 80 “scoop shops” were flying the Ben & Jerry’s banner across 18 different states. At this time, the company decided to hold back on further franchising to make sure that product quality and service in its existing stores met its standards.

Also in 1988, Ben & Jerry’s responded to continuing growth in demand for the company’s products by opening its second manufacturing facility in Springfield, Vermont. This plant was used to make ice cream novelties, including the “Peace Pop,” a chocolate covered ice cream bar on a stick. The name of this product referred to “One Percent for Peace,” a nonprofit group founded in part by Cohen and Greenfield that was dedicated to redirecting national resources towards peace.

Together with their employees, Cohen and Greenfield formulated a three-part statement of mission that was designed to sum up the company’s unique corporate philosophy. Relying on a theory of “linked prosperity,” the mission statement asserted that Ben & Jerry’s had a product mission, a social mission, and an economic mission. The company hoped to use this credo to enhance the lives of individuals and communities through its actions. As part of its philosophy of linked prosperity, Ben & Jerry’s introduced several new flavors of ice cream that incorporated ingredients from special sources. Rainforest Crunch, marketed in 1989, used nuts produced by rain forest trees. Choco-late Fudge Brownie, brought out in February 1990, used brownies made at a bakery in New York where formerly unemployed and homeless people worked.

Beginning in the late 1980s, Ben & Jerry’s joined the trend toward producing low-fat ice cream and yogurt. Ben & Jerry’s Light, introduced in 1989, had reduced levels of fat and cholesterol compared to the regular Ben & Jerry’s ice cream but no less fat than other “regular” products then on the market. “It was sort of an oxymoron,” the company’s chief financial officer admitted to the Wall Street Journal. Sales of the products never exceeded about $9 million, and in December 1991 the line was declared a mistake and phased out.

Ben & Jerry’s frozen yogurt proved far more successful. Boasting a butterfat content between one and five percent—as opposed to the 17 percent butterfat levels in the regular ice cream—Ben & Jerry’s yogurt was selling in 13 cities around the United States in 1992. Within five months, yogurt sales were accounting for 15 to 18 percent of the company’s revenues, and by the end of the year, it had become the leader in the superpremium yogurt market. In addition, Ben & Jerry’s introduced a pint version of one of its most popular scoop shop offerings, chocolate chip cookie dough. The company had spent five years finding a way to get the chunks of dough into pints of ice cream without having them stick together and gum up the packaging machines. The product was an immediate hit, and soon became the company’s best-selling flavor. Finally, the company began to market its ice cream novelties, Peace Pops and Brownie Bars, in “multi-paks” in supermarkets.

In response to continuing demand for its new products, Ben & Jerry’s moved to increase its output in Vermont. The company added a pint production line at its Springfield plant, and also borrowed space at the St. Alban’s Cooperative Creamery to open another temporary production facility. To increase its capacity over the long term, Ben & Jerry’s broke ground on a third ice cream factory in St. Alban’s in late 1992. Financed through an additional stock offering, this plant was scheduled to be functional in 1994. In addition, the company completed a new distribution center in Bellows Falls, Vermont. Ben & Jerry’s also renewed its co-packing agreement with Dreyer’s Grand Ice Cream, Inc., its mid western partner. By the end of 1992, Ben & Jerry’s sales overall had reached $132 million, up from $77 million in 1989.

Further from home, Ben & Jerry’s opened two ice cream shops in the Russian cities of Petrozavodsk and Kondopoga. With two Russian partners, the company had spent three years navigating the Soviet bureaucracy and finding supplies for the venture, which Cohen and Greenfield hoped would promote friendship between Russians and Americans. After importing equipment and lining up reliable sources for cream, the company was able to open a combination ice cream plant and parlor, which was blessed by a Russian Orthodox priest on its first day.

Key Dates:

1978:

Ben Cohen and Jerry Greenfield open their first ice cream shop in Burlington, Vermont.

1982:

First out-of-state store opens.

1985:

National expansion stepped up.

1988:

Ben & Jerry’s opens first international shops, in Canada and the Caribbean.

1995:

Ben Cohen steps aside to let a professional manager take the CEO position.

2000:

Ben & Jerry’s acquired by Unilever.

As Ben & Jerry’s moved into the mid-1990s, it could look back on a streak of extraordinary growth. From one small shop in downtown Burlington, Vermont, it had grown to include a chain of nearly 100 franchised shops, and a line of products sold in stores across the country. Company leaders were aware that it was unlikely that this rate of expansion could continue forever, since Ben & Jerry’s growth had come in a mature and stable market. With its idiosyncratic corporate culture and its strong track record of introducing innovative flavors that drove ever-stronger sales, however, it appeared that Ben & Jerry’s was well positioned to continue its success.

Going Corporate in the 1990s

Unfortunately, sales of superpremium ice cream slipped in the mid-1990s, as increasingly health-conscious consumers cut back on calories. Ben & Jerry’s posted its first quarterly loss ever at the end of 1994, it slowest season. In addition, software problems crippled the new plant at St. Albans, draining the company’s resources.

Ben & Jerry’s had just over 500 employees in late 1994 when Ben Cohen announced his retirement as CEO (he remained chairman). In order to attract the right caliber of management talent to lead the company, Ben & Jerry’s controversially dropped the pay formula that had limited the top salary to just five times the lowest. It launched a “Yo! I’m Your CEO” contest which received 20,000 entries from prospective candi-dates. However, the new CEO, Robert Holland, Jr., was actually chosen by a professional search firm.

Holland had previously become the first African-American partner at the esteemed management consulting firm McKinsey & Co. He applied his manufacturing expertise to developing a new line of sorbets and resolving the costly equipment problems at St. Albans. Developing new markets, however, was the company’s top priority.

Ben & Jerry’s continued to look abroad for growth. It had but an eight percent market share in Great Britain—a third that of Haagen-Dazs. The company tested the waters in France in late 1995. It soon afterwards began a kind of guerrilla marketing blitz, complete with Cowmobile, aimed at capturing the youngest of the country’s ice cream connoisseurs. At home, Ben & Jerry’s whipped up hip concoctions honoring the Doonesbury and Dilbert cartoons as well as the Vermont rock band Phish.

After a year and a half on the job, Holland decided that he was not the right person to develop these new markets and new products. Perry Odak was tapped to replace Holland. He had served briefly as COO of U.S. Repeating Arms Co., maker of Winchester rifles. This surprised some, given Ben & Jerry’s philanthropic contributions to gun control groups. However, Odak had plenty of the desired consumer marketing experience with such companies as Armour-Dial, Jovan Inc., and Atari.

Ben & Jerry’s enjoyed increased sales in the United States and United Kingdom in the late 1990s, when international sales accounted for about 11 percent of the total. The company signed a new Canadian distribution deal in 1998. The next year, it redesigned its U.S. distribution network to become less dependent on Dreyer’s, signing on with the newly-created Nestle/ Pillsbury joint venture, Ice Cream Partners. The company began using unbleached paperboard pint containers and planned to begin outsourcing its frozen novelties in 2000.

Unilever 2000

In April 2000, Unilever announced it was buying Ben & Jerry’s for $326 million in cash. By coincidence, Unilever announced it was also buying diet food maker Slimfast on the same day. Unilever, which had $45 billion in annual sales, boasted such brands as Lipton Tea, Gordon’s fish filets, Wisk detergent, and Dove soap—and Breyer’s, Good Humor, and Sealtest ice cream. Although Unilever was in the process of cutting 1,200 of its total 1,600 brands worldwide, Unilever offered the power to take Ben & Jerry’s, its only superpremium ice cream, to thousands of new consumers.

However, the purchase reminded at least one observer of the expensive, disastrous 1994 acquisition of Snapple Beverage by Quaker Oats. Snapple also had a quirky image and grass roots origins, but it withered under its new owner until finally Quaker Oats sold it at a huge loss.

The Anglo-Dutch corporation promised it would maintain Ben & Jerry’s commitment to social causes. Cohen and Green-field were to retain management roles. Unilever and Meadowbrook Lane Capital had originally planned to help take the company private, until they were outbid in that effort by Dreyer’s Grand Ice Cream Co. Interestingly, the man who had persuaded Cohen and Greenfield to sell, Unilever’s North American head Richard Goldstein, soon left to become CEO of International Flavors and Fragrances.

Principal Subsidiaries

Ben & Jerry’s Homemade Holdings, Inc.

Principal Competitors

Ice Cream Partners; Dreyer’s Grand Ice Cream, Inc.; Mars, Inc.; Nestle S.A.; Good Humor-Breyer’s.

Further Reading

Ackerman, Jerry, “$326 Million Sale Makes It Ben, Jerry & Unilever but World’s Top Consumer Products Company Says Ice Cream Maker’s Good Deeds Won’t End,” Boston Globe, April 13, 2000, pp. Clf.

Alexander, Suzanne, “Life’s Just a Bowl of Cherry Garcia for Ben & Jerry’s,” Wall Street Journal, July, 1992.

“Ben & Jerry’s Looks Toward Life after Holland,” Ice Cream Reporter, October 20, 1996, pp. Iff.

Finch, Julia, and Jane Martinson, “Unilever Gorges on Ice Cream and Slimming Foods,” Guardian, April 13, 2000.

Hays, Constance L., “Ben & Jerry’s Deal Takes on Slightly New Flavor,” New York Times, May 2, 2000, p. C1.

Hubbard, Kim, “For New Age Ice Cream Moguls Ben and Jerry, Making ‘Cherry Garcia’ and ‘Chunky Monkey’ Is a Labor of Love,” People, September 10, 1990.

Kellaway, Lucy, “New Age Rests in Peace, Man: The Socially Responsible Business Ethic Has Now Become a Self-interested, Cynical PR Message,” Financial Times, Inside Track, April 17, 2000, pp. 16 +.

Larson, Jane, “Founders of Ben & Jerry’s Ice Cream Share Ingredients of Success,” Arizona Republic, December 9, 1998.

McCormick, Jay, “Ben & Jerry’s a la Mode,” Business Week, May 20, 1996, pp. 22 +.

Pham, Alex, “GunAdviser Takes Post at Ben & Jerry’s: For Fabled Firm, CEO Reflects Changing Times,” Boston Globe, January 3, 1997, pp. Cl +.

Shao, Maria, “The New Emperor of Ice Cream,” Boston Globe, Economy Section, February 2, 1995, pp. 35 +.

——, “A Scoopful of Credentials: CEO Holland Brings an Activist’s Blend to Ben & Jerry’s,” Boston Globe, March 1, 1995, pp. 1+.

Tomkins, Richard, “Takeovers That Lose Their Cool,” Financial Times, Comment & Analysis, April 15, 2000, pp. 13+.

“Union Wins Decision over Ben & Jerry’s,” Boston Globe, December 16, 1998, p. C5.

—Elizabeth Rourke

—Updated by Frederick C. Ingram

Ben & Jerry's Homemade, Inc.

30 Community Drive
South Burlington, Vermont 05403-6828
U.S.A.
Telephone:(802) 846-1543
Fax: (802) 846-1610
Web site: http://www.benjerry.com

Wholly-Owned Subsidiary of Unilever
Incorporated: 1978 as Ben & Jerry's Homemade
Employees: 514
Sales: $300 million (2004 est.)
NAIC: 31152 Ice Cream and Frozen Dessert Manufacturing

Ben & Jerry's Homemade, Inc., produces superpremium ice cream, frozen yogurt, and ice cream novelties in rich and original flavors, loaded with big chunks of cookies and candy. The company uses natural ingredients almost exclusively and insists its dairy suppliers not use bovine growth hormone on their herds. Ben & Jerry's is distinguished by a corporate philosophy that stresses social action and progressive ideals in addition to profit-making. Its innovative and creative marketing devices have further expressed this progressive spirit. When confronted with a declining market for superpremium ice cream, the company's founders turned increasingly to professional managers and finally sold out to Unilever, which promised to maintain Ben & Jerry's traditional values while taking the brand to new heights. The Ben & Jerry's retail chain has about 450 shops, but most of the brand's ice cream is sold in supermarkets and convenience stores.

EARTHY ORIGINS

Ben & Jerry's was founded in May 1978, when Ben Cohen and Jerry Greenfield opened an ice cream shop in Burlington, Vermont. Cohen had been teaching crafts, and Greenfield had been working as a lab technician when the two decided that "we wanted to do something that would be more fun," as Greenfield later told People magazine. In addition, the two wanted to live in a small college town. In 1977, they moved to Burlington, Vermont, and completed a five dollar correspondence course in ice cream making from Pennsylvania State University. With $12,000 in start-up money, a third of which they borrowed, the two renovated an old gas station on a corner in downtown Burlington and opened Ben & Jerry's Homemade.

The first Ben & Jerry's store sold 12 flavors, made with an old-fashioned rock salt ice cream maker and locally produced milk and cream. Initially, ice cream production ran into some glitches. "I once made a batch of rum raisin that stretched and bounced," Greenfield told People. With time, however, the pair's rich, idiosyncratic, chunky offerings such as Dastardly Mash and Heath Bar Crunch gained a loyal following. In the summer of 1978, Ben & Jerry inaugurated the first of the many creative marketing ploys that would help drive the growth of their company when they held a free summer movie festival, projecting films onto a blank wall of their building.

By 1980, Ben & Jerry had begun selling their ice cream to a number of restaurants in the Burlington area. Ben delivered the products to customers in an old Volkswagen squareback station wagon. On his delivery route, he passed many small grocery and convenience stores and decided that they would be a perfect outlet for their products. In 1980, the pair rented space in an old spool and bobbin factory in Burlington and began packaging their ice cream in pint-size cartons with pictures of themselves on the package. "The image we wanted was grass roots," Cohen later told People.

The popularity of Ben & Jerry's products brought the company growth, despite the laissez-faire attitude of its two proprietors. At one point, the two were forced to close the doors of their store for a day to devote themselves to sorting out paperwork. In 1981, Ben & Jerry's expanded its pint-packing operations to more spacious quarters behind a car dealership. Shortly thereafter, the company opened its second retail outlet, a franchise on Route 7 in Shelburne, Vermont.

GOING NATIONAL IN 1982

Despite its exclusively local operations, Ben & Jerry's first gained national attention in 1981 when Time magazine hailed its products as "the best ice cream in the world" in a cover story on ice cream. In the following year, Ben & Jerry's began to expand its distribution beyond the state of Vermont. First, an out-of-state store opened, selling Ben & Jerry's products in Portland, Maine. Then, the company began to sell its pints in the Boston area, distributing their goods to stores through independent channels. At the same time, Ben & Jerry's continued its policy of promoting itself through unique and whimsical activities. In 1983, for instance, the company took part in the construction of the world's largest ice cream sundae in St. Albans, Vermont.

With its continuing expansion, Ben & Jerry's developed a need for tighter financial controls on its operations, and the company's founders brought in a local nightclub owner with business experience to be chief operating officer. As sales grew sharply, Cohen and Greenfield slowly came to realize that their small-scale endeavor had exceeded their expectations. They were not entirely happy about this unexpected success. "When Jerry and I realized we were no longer ice cream men, but businessmen, our first reaction was to sell," Cohen told People magazine. "We were afraid that business exploits its workers and the community."

Ultimately, Cohen and Greenfield did decide to keep the company, but they vowed not to allow the growth of their enterprise to overwhelm their ideas of how a business could be a force for positive change in a community. "We decided to adapt the company so we could feel proud to say we were the businessmen of Ben & Jerry's," Cohen concluded. Among the stipulations they made to ensure that their company would be different from other parts of corporate America was a salary cap, limiting the best-paid people in the company to wages just five times higher than those of the lowest-paid employees. As Ben & Jerry's grew, this unusual limitation would complicate the company's high-level staffing.

To finance further growth, Greenfield and Cohen decided to raise capital to expand by selling stock to the public. However, in an effort to maintain a sense of local accountability in the company, they limited the stock offering to residents of Vermont, utilizing a little-known clause of the state law governing stocks and brokering. With the proceeds from this sale of stock, the company began construction of a new plant and corporate headquarters in Waterbury, Vermont, about half an hour away from Burlington.

COMPANY PERSPECTIVES

Ben & Jerry's is founded on and dedicated to a sustainable corporate concept of linked prosperity. Our mission consists of three interrelated parts. Product Mission: To make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment. Economic Mission: To operate the Company on a sustainable basis of profitable growth, increasing value for our stakeholders & expanding opportunities for development and career growth for our employees. Social Mission: To operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally & internationally. Central to the mission of Ben & Jerry's is the belief that all three parts must thrive equally in a manner that commands deep respect for individuals in and outside the company and supports the communities of which they are a part.

As Ben & Jerry's products continued to garner attention, its prime competitor in the premium ice cream market, Haägen-Dazs, took steps to protect its own share of the market. In 1984, Pillsbury, Haägen-Dazs's corporate parent, threatened to withhold its products from distributors who also sold Ben & Jerry's ice cream. Ben & Jerry's retaliated by filing suit against Pillsbury, and also by launching a publicity campaign with the slogan "What's the Doughboy Afraid Of?" Pillsbury took steps to restrict distribution again in 1987, when it threatened to stop selling its ice cream to retailers who also sold Ben & Jerry's products. In both cases, legal action brought the restrictive practices to an end. By the end of 1984, sales of Ben & Jerry's products had exceeded $4 million, a figure more than twice as large as the previous year's revenues.

In 1985, Ben & Jerry's expanded distribution of its products dramatically, starting up sales of its pints in New York, New Jersey, Pennsylvania, Virginia, Washington, D.C., Georgia, Florida, and Minnesota. To supply these new markets, the company completed work on a modern manufacturing plant. Among the new offerings that year was New York Super Fudge Chunk, created at the suggestion of a customer from New York City. Throughout 1985, sales of Ben & Jerry's products continued at a break-neck pace. By the end of the year, revenues had reached $9 million, an increase of 143 percent from 1984. As part of their program to remain true to their ideals, Cohen and Greenfield established the Ben & Jerry's Foundation to fund community-oriented projects. In addition to the Foundation's initial capitalization, the two pledged 7.5 percent of the company's annual pre-tax profits to the charity.

FARMING OUT IN 1986

In 1986, facing demand for its products that its one Vermont plant was unable to meet, Ben & Jerry's contracted with Dreyer's Grand Ice Cream, an ice cream company located in the Midwest, to manufacture Ben & Jerry's ice cream in its plants and distribute its products in most markets outside the Northeast. In addition, the company introduced its newest pint flavor, Coffee Heath Bar Crunch.

To promote this and other flavors, as well as the corporate identity, Ben & Jerry's began conducting tours of its Waterbury, Vermont, plant in 1986. In addition, the company launched its "Cowmobile," a converted mobile home that Cohen and Greenfield set out to drive across the country, distributing free scoops of ice cream as they went. Four months into the trip, the Cowmobile burned to the ground outside Cleveland without causing any injuries, bringing the planned expedition to a premature end. These efforts had pushed company sales to $20 million by the end of 1986, as Ben & Jerry's continued to post a remarkable rate of growth.

Cohen and Greenfield's original plan for a cross country trip was brought to fruition in 1987, when "Cow II" made its maiden voyage, also dispensing free scoops of ice cream along the way. After the October 1987 stock market crash, Cow II appeared on Wall Street to hand out scoops of "That's Life" and "Economic Crunch" ice cream to financial industry workers. Along with these highly topical creations, Ben & Jerry's introduced pints of "Cherry Garcia," named for the long-time lead guitarist of the rock group Grateful Dead. In addition, the company began to market its first ice cream novelty, the Brownie Bar. This product consisted of a square of French Vanilla ice cream, sandwiched between two brownies.

At their manufacturing plant in Vermont, Ben & Jerry's also took steps to keep the company in compliance with its ideal of being a socially responsible enterprise. To reduce its impact on the environment, Ben & Jerry's began using its ice cream waste to feed pigs being raised on a farm in Stowe, Vermont. In addition, to keep plant employees happy, the company instituted a variety of gestures, including Elvis day and Halloween costume celebrations, to break the monotony of life in a factory. By the end of 1987, company revenues had increased again, to reach $32 million.

INTERNATIONAL IN 1988

In 1988, Ben & Jerry's opened its first outlets outside the United States when ice cream shops began operating in Montreal, Quebec, and in St. Maarten in the Caribbean. By the end of the year, more than 80 "scoop shops" were flying the Ben & Jerry's banner across 18 different states. At this time, the company decided to hold back on further franchising to make sure that product quality and service in its existing stores met its standards.

KEY DATES

1978:

Ben Cohen and Jerry Greenfield open their first ice cream shop in Burlington, Vermont.

1982:

First out-of-state store opens.

1985:

National expansion stepped up; Ben & Jerry's Foundation established.

1988:

Ben & Jerry's opens first international shops, in Canada and the Caribbean.

1995:

Ben Cohen steps aside to let a professional manager take the CEO position.

2000:

Ben & Jerry's acquired by Unilever.

Also in 1988, Ben & Jerry's responded to continuing growth in demand for the company's products by opening its second manufacturing facility in Springfield, Vermont. This plant was used to make ice cream novelties, including the "Peace Pop," a chocolate covered ice cream bar on a stick. The name of this product referred to "One Percent for Peace," a nonprofit group founded in part by Cohen and Greenfield that was dedicated to redirecting national resources towards peace.

Together with their employees, Cohen and Greenfield formulated a three-part statement of mission that was designed to sum up the company's unique corporate philosophy. Relying on a theory of "linked prosperity," the mission statement asserted that Ben & Jerry's had a product mission, a social mission, and an economic mission. The company hoped to use this credo to enhance the lives of individuals and communities through its actions. As part of its philosophy of linked prosperity, Ben & Jerry's introduced several new flavors of ice cream that incorporated ingredients from special sources. Rainforest Crunch, marketed in 1989, used nuts produced by rain forest trees. Chocolate Fudge Brownie, brought out in February 1990, used brownies made at a bakery in New York where formerly unemployed and homeless people worked.

Beginning in the late 1980s, Ben & Jerry's joined the trend toward producing low-fat ice cream and yogurt. Ben & Jerry's Light, introduced in 1989, had reduced levels of fat and cholesterol compared to the regular Ben & Jerry's ice cream but no less fat than other "regular" products then on the market. "It was sort of an oxymoron," the company's chief financial officer admitted to the Wall Street Journal. Sales of the products never exceeded about $9 million, and in December 1991 the line was declared a mistake and phased out.

Ben & Jerry's frozen yogurt proved far more successful. Boasting a butterfat content between 1 and 5 percent—as opposed to the 17 percent butterfat levels in the regular ice cream—Ben & Jerry's yogurt was selling in 13 cities around the United States in 1992. Within five months, yogurt sales were accounting for 15 to 18 percent of the company's revenues, and by the end of the year, it had become the leader in the superpremium yogurt market. In addition, Ben & Jerry's introduced a pint version of one of its most popular scoop shop offerings, chocolate chip cookie dough. The company had spent five years finding a way to get the chunks of dough into pints of ice cream without having them stick together and gum up the packaging machines. The product was an immediate hit, and soon became the company's best-selling flavor. Finally, the company began to market its ice cream novelties, Peace Pops and Brownie Bars, in "multi-paks" in supermarkets.

In response to continuing demand for its new products, Ben & Jerry's moved to increase its output in Vermont. The company added a pint production line at its Springfield plant, and also borrowed space at the St. Albans Cooperative Creamery to open another temporary production facility. To increase its capacity over the long term, Ben & Jerry's broke ground on a third ice cream factory in St. Albans in late 1992. Financed through an additional stock offering, this plant was scheduled to be functional in 1994. In addition, the company completed a new distribution center in Bellows Falls, Vermont. Ben & Jerry's also renewed its co-packing agreement with Dreyer's Grand Ice Cream, Inc., its midwestern partner. By the end of 1992, Ben & Jerry's sales overall had reached $132 million, up from $77 million in 1989.

Further from home, Ben & Jerry's opened two ice cream shops in the Russian cities of Petrozavodsk and Kondopoga. With two Russian partners, the company had spent three years navigating the Soviet bureaucracy and finding supplies for the venture, which Cohen and Greenfield hoped would promote friendship between Russians and Americans. After importing equipment and lining up reliable sources for cream, the company was able to open a combination ice cream plant and parlor, which was blessed by a Russian Orthodox priest on its first day.

As Ben & Jerry's moved into the mid-1990s, it could look back on a streak of extraordinary growth. From one small shop in downtown Burlington, Vermont, it had grown to include a chain of nearly 100 franchised shops and a line of products sold in stores across the country. Company leaders were aware that it was unlikely that this rate of expansion could continue forever, since Ben & Jerry's growth had come in a mature and stable market. With its idiosyncratic corporate culture and its strong track record of introducing innovative flavors that drove ever-stronger sales, however, it appeared that Ben & Jerry's was well positioned to continue its success.

NEW CEO IN 1994

Unfortunately, sales of superpremium ice cream slipped in the mid-1990s, as increasingly health-conscious consumers cut back on calories. Ben & Jerry's posted its first quarterly loss ever at the end of 1994, it slowest season. In addition, software problems crippled the new plant at St. Albans, draining the company's resources.

Ben & Jerry's had just over 500 employees in late 1994 when Ben Cohen announced his retirement as CEO. (He remained chairman.) In order to attract the right caliber of management talent to lead the company, Ben & Jerry's controversially dropped the pay formula that had limited the top salary to just five times the lowest. It launched a "Yo! I'm Your CEO" contest which received 20,000 entries from prospective candidates. However, the new CEO, Robert Holland, Jr., was actually chosen by a professional search firm.

Holland had previously become the first African-American partner at the esteemed management consulting firm McKinsey & Co. He applied his manufacturing expertise to developing a new line of sorbets and resolving the costly equipment problems at St. Albans. Developing new markets, however, was the company's top priority.

Ben & Jerry's continued to look abroad for growth. It had but an 8 percent market share in Great Britain—one-third that of Häagen-Dazs. The company tested the waters in France in late 1995. It soon afterwards began a kind of guerrilla marketing blitz, complete with Cow-mobile, aimed at capturing the youngest of the country's ice cream connoisseurs. At home, Ben & Jerry's whipped up hip concoctions honoring the Doonesbury and Dilbert cartoons as well as the Vermont rock band Phish.

After a year and a half on the job, Holland decided that he was not the right person to develop these new markets and new products. Perry Odak was tapped to replace Holland. He had served briefly as COO of U.S. Repeating Arms Co., maker of Winchester rifles. This surprised some, given Ben & Jerry's philanthropic contributions to gun control groups. However, Odak had plenty of the desired consumer marketing experience with such companies as Armour-Dial, Jovan Inc., and Atari.

Ben & Jerry's enjoyed increased sales in the United States and United Kingdom in the late 1990s, when international sales accounted for about 11 percent of the total. The company signed a new Canadian distribution deal in 1998. The next year, it redesigned its U.S. distribution network to become less dependent on Drey-er's, signing on with the newly-created Nestle/Pillsbury joint venture, Ice Cream Partners. The company began using unbleached paperboard pint containers and planned to begin outsourcing its frozen novelties in 2000.

ACQUISITION BY UNILEVER IN 2000

In April 2000, Unilever announced it was buying Ben & Jerry's for $326 million in cash. By coincidence, Unilever announced it was also buying diet food maker Slimfast on the same day. Unilever, which had $45 billion in annual sales, boasted such brands as Lipton Tea, Gordon's fish filets, Wisk detergent, and Dove soap—as well as Breyer's, Good Humor, and Sealtest ice creams. Although Unilever was in the process of cutting 1,200 of its total 1,600 brands worldwide, Unilever offered the power to take Ben & Jerry's, its only superpremium ice cream, to thousands of new consumers.

The purchase reminded at least one observer of the expensive, disastrous 1994 acquisition of Snapple Beverage by Quaker Oats. Snapple also had a quirky image and grass roots origins, but it withered under its new owner until finally Quaker Oats sold it at a huge loss. However, the Anglo-Dutch corporation promised it would maintain Ben & Jerry's commitment to social causes. Cohen and Greenfield were to retain management roles. Unilever and Meadowbrook Lane Capital had originally planned to help take the company private, until they were outbid in that effort by Dreyer's Grand Ice Cream Co. Interestingly, the man who had persuaded Cohen and Greenfield to sell, Unilever's North American head Richard Goldstein, soon left to become CEO of International Flavors and Fragrances.

Ben & Jerry's officially merged with Unilever in August 2000. The company continued to demonstrate its familiar flair for marketing stunts that summer, firing up two hot air balloons for its Stop & Taste the Ice Cream Tour.

In November 2000, Unilever ice cream executive Yves Couette was designated to replace CEO Odak, who was retiring for personal reasons. (He went on to head Wild Oats Markets Inc.) While Couette, a Frenchman, had two dozen years of experience with Unilever, company founders Ben Cohen and Jerry Greenfield had backed another candidate from Ben & Jerry's own board of directors whom they felt was more in line with the company's social values. The founders' choice was reportedly former Coca-Cola Co. marketing executive Pierre Ferrari.

Sales were less than $250 million in 2000, but Odak predicted Unilever could build Ben & Jerry's into a billion-dollar brand within three years, reported Business Week. The company had 800 employees.

In spite of the controversy over the selection of CEO, the company continued to be involved in many progressive initiatives. Ben & Jerry's was maintaining its tradition of donating 7.5 percent of profits to charity. Another point of consistency was the company's insistence on using only dairy products from rBGH-free cows.

A switch to Eco-Pint packaging by 2001 demonstrated a continued commitment to environmental consciousness. These containers were made of unbleached, brown paperboard and were more biodegradable. The Eco-Pints were appropriately used to package one of the company's new products: dirt. The company began pitching compost made from its ice cream waste and other ingredients. It was bundled with sunflower seed packets and marketed at garden centers and online as "Terra Fuela." The product was developed with the Intervale Foundation, a Burlington organization focused on sustainable agriculture.

FACING INDUSTRY CONSOLIDATION IN 2001 AND BEYOND

Dreyer's Grand Ice Cream had been distributing Ben & Jerry's in grocery stores in the Midwest and Northwest. This arrangement was extended nationally, and to convenience stores, in February 2001 under a five-year contract. (Nestlé S.A. announced it was buying a majority of Dreyer's in 2002, strengthening its already considerable position in the ice cream market.)

An increasingly competitive marketplace prompted layoffs in 2002. Administrative positions were cut and two Vermont plants (Bellows Falls and Springfield) were shuttered. However, the St. Albans site was being expanded at a cost of $10 million. There were also redundancies due to Unilever combining Ben & Jerry's sales force with that of Good Humor-Breyers, which it also owned.

The company had long been opposed to synthetic hormones, and it began test marketing a line of ice cream made with organic Vermont milk in 2003. In another new Vermont-related initiative, Ben & Jerry's began opening its first co-branded outlets with the environmentally conscious Green Mountain Coffee chain.

Yves Couette stepped down from the CEO spot at the end of 2004. Under his watch, sales had increased 37 percent since 2001 (when they were $237 million) according to Workforce Management, while operating margins tripled. Advertising Age cited Dairy Field magazine figures stating that convenience store and supermarket sales amounted to $198.8 million in the year ending January 2004; this did not include the 450 retail stores. The trade journal Dairy Foods estimated Ben & Jerry's 2004 sales at $272 million, ranking it 53rd in its "Dairy 100" listing. Couette was succeeded by Walt Freese, a former Celestial Seasonings manager who had previously been Ben & Jerry's marketing chief. (The company also had a new chief financial officer to replace one who later pled guilty to embezzlement.)

Ben & Jerry's continued to introduce a handful of new flavors every year. It sometimes turned to the public for ideas; in 2006, the company invited customers to participate in its "Do Us a Flavor Contest" to discover "the next lip-smacking, completely unexpected Ben & Jerry's flavor."

                                       Elizabeth Rourke

                           Updated, Frederick C. Ingram

PRINCIPAL COMPETITORS

Dreyer's Grand Ice Cream Holdings Inc.; Mrs. Fields Famous Brands, LLC; Nestle S.A.; Blue Bell Creameries L P.

FURTHER READING

Ackerman, Jerry, "$326 Million Sale Makes It Ben, Jerry & Unilever but World's Top Consumer Products Company Says Ice Cream Maker's Good Deeds Won't End," Boston Globe, April 13, 2000, pp. C1f.

Alexander, Suzanne, "Life's Just a Bowl of Cherry Garcia for Ben & Jerry's," Wall Street Journal, July, 1992.

"Ben & Jerry Cool on New Ice Cream CEO," Reuters News, November 20, 2000.

"Ben & Jerry's Cuts 26 Jobs Nationwide," Associated Press Newswires, February 8, 2003.

"Ben & Jerry's Has a New Leader," Associated Press Newswires, October 29, 2004.

"Ben & Jerry's Looks Toward Life after Holland," Ice Cream Reporter, October 20, 1996, pp. 1+.

"Ben & Jerry's Tries Organic Ice Cream," Associated Press Newswires, June 4, 2003.

Devaney, Polly, "Ben & Jerry's Gets a Licking," Brand Strategy, April 1, 2001, p. 16.

"Dreyer's in Distribution Agreement with Ben & Jerry's," Dairy Markets Weekly, October 26, 2000, p. 3.

Duecy, Erica, "Ben & Jerry's, Green Mountain Join Forces to Offer Co-Branded Outlets," Nation's Restaurant News, July 12, 2004, pp. 4+.

Finch, Julia, and Jane Martinson, "Unilever Gorges on Ice Cream and Slimming Foods," Guardian, April 13, 2000.

"Former Ben & Jerry's CFO Pleads to Embezzlement," Associated Press Newswires, September 2, 2005.

Goff, Leslie Jaye, "Summertime Heats Up IT at Ice Cream Maker Ben & Jerry's," Computerworld, July 2, 2001, p. 27.

Hays, Constance L., "Ben & Jerry's Deal Takes on Slightly New Flavor," New York Times, May 2, 2000, p. C1.

Hubbard, Kim, "For New Age Ice Cream Moguls Ben and Jerry, Making 'Cherry Garcia' and 'Chunky Monkey' Is a Labor of Love," People, September 10, 1990.

"Ice Cream Giant Comes Up with Pint of Compost," BioCycle, December 1, 2001, p. 8.

Kellaway, Lucy, "New Age Rests in Peace, Man: The Socially Responsible Business Ethic Has Now Become a Self-Interested, Cynical PR Message," Financial Times, Inside Track, April 17, 2000, pp. 16+.

Kiger, Patrick J., "Corporate Crunch," Workforce Management, April 1, 2005, p. 32+.

Larson, Jane, "Founders of Ben & Jerry's Ice Cream Share Ingredients of Success," Arizona Republic, December 9, 1998.

McCormick, Jay, "Ben & Jerry's a la Mode," Business Week, May 20, 1996, pp. 22+.

McLaughlin, Tim, "Interview—Ben & Jerry Co-Founder Threatens to Quit," Reuters News, December 1, 2000.

Mahoney, Sarah, "It Only Looks Easy; For Ben & Jerry's Walt Freese, Tending An Ice-Cream Icon Means Staying True to Its Core Users," Advertising Age, March 1, 2005, p. 13.

Nax, Sanford, "Ben & Jerry Accent Shift in Business Success at Fresno, Calif., Conference," Knight Ridder Tribune Business News, February 15, 2001.

Pham, Alex, "Gun Adviser Takes Post at Ben & Jerry's: For Fabled Firm, CEO Reflects Changing Times," Boston Globe, January 3, 1997, pp. C1+.

Phillips, David, "Dairy 100: Bigger by the Billions," Dairyfoods.com, August 1, 2005.

――――――――, "Vermont's Latest Expansion Makes St. Albans the Largest Plant in Ben & Jerry's Streamlined Operations," Dairy Foods, September 2003, pp. 50+.

Rathke, Lisa, "Ben & Jerry's Says Job Cuts Pending at Headquarters," Associated Press Newswires, October 15, 2002.

Shao, Maria, "The New Emperor of Ice Cream," Boston Globe, Economy Section, February 2, 1995, pp. 35+.

――――――, "A Scoopful of Credentials: CEO Holland Brings an Activist's Blend to Ben & Jerry's," Boston Globe, March 1, 1995, pp. 1+.

Smith, Geoffrey, "A Famous Brand on a Rocky Road: Would Ben & Jerry's Sales Soften Without Ben and Jerry?," Business Week, December 11, 2000, p. 54.

Tomkins, Richard, "Takeovers That Lose Their Cool," Financial Times, Comment & Analysis, April 15, 2000, pp. 13+.

Tomsho, Robert, Joe Pereira, and John Hechinger, "Ben & Jerry's Founders May Quit Unilever Unit," Wall Street Journal, November 21, 2000, p. B14.

"Union Wins Decision over Ben & Jerry's," Boston Globe, December 16, 1998, p. C5.

Ben & Jerry's
Homemade, Inc.

30 Community Drive
South Burlington, VT 05403-6828
(802) 846-1500
www.benandlerrys.com

Ben Cohen and Jerry Greenfield are best friends as well as founders of Ben & Jerry's Homemade Inc., makers of super premium ice cream, frozen yogurt, and sorbet. In 1978, the pair opened their first ice cream parlor in a renovated gas station in rural Burlington, Vermont. Their ice cream, which was made from high-quality ingredients, including milk and cream from local dairy farmers, soon caught the attention of ice cream buyers across the United States. In 1981, Time named Ben & Jerry's ice cream the best in the world.

Today, the company sells its frozen concoctions in more than one hundred and thirty scoop shops in all fifty states. Ben & Jerry's can also be found in Canada, Great Britain, France, the Netherlands, and Israel. The company, however, does more than just sell ice cream. Cohen and Greenfield started a revolution in the food business when they decided to give a percentage of company profits to charitable organizations, usually associated with social causes and the environment. When the company was acquired by Unilever in 1999, many people accused Cohen and Greenfield of "selling out" their ideals to big business.

Junior High Friends

Ben Cohen and Jerry Greenfield met in 1963 in their seventh grade gym class in suburban Merrick, New York. Their common bond was a love of ice cream and a hatred of running laps in gym class. This common love of ice cream would follow them throughout their lives. Cohen's first "taste" of the business came in his senior year of high school, when he drove a truck selling ice cream to neighborhood children. Both men graduated from Calhoun High School in 1969 and went off to separate colleges. Cohen dropped out before graduating, while Greenfield graduated from Oberlin College in Ohio. He worked in the college cafeteria selling ice cream.

By 1976, both men were living in upstate New York, where Cohen was experimenting with ice cream making. In 1977, the two friends decided to start their own ice cream business, although neither knew anything about such a venture. To get up to speed, they signed up for a $5 correspondence course from Pennsylvania State University in ice cream making; they both got A's. During this time, the two had great fun making up peculiar flavors of ice cream, even though some of their trials flopped. "I once made a batch of rum raisin that stretched and bounced," Greenfield told People magazine.

Ben & Jerry's at a Glance

• Employees: 850
• CEO: Yves Couette
• Subsidiaries: None; Ben & Jerry's is a subsidiary of Unilever
• Major Competitors: Nestle; Häagen-Dazs; Dreyer's
• Notable Products: Chocolate Fudge Brownie frozen yogurt; Peanut Butter Cup ice cream; Chunky Monkey ice cream; Cherry Garcia frozen yogurt; Half Baked 2-Twisted ice cream; New York Super Fudge Chunk ice cream; Phish Food ice cream; Chocolate Fudge Brownie ice cream; Chocolate Chip Cookie Dough ice cream; Cherry Garcia ice cream

Scoop Shop Opens

In 1978, Cohen and Greenfield used $8,000 of their own money and $4,000 that they borrowed to open their first Ben & Jerry's ice cream shop in Burlington, Vermont. The store opened on May 5 in a renovated gas station at the corner of St. Paul and College streets in downtown Burlington. To help attract business, the men held a summer film festival, projecting movies on the outside wall of the shop. Greenfield made all the ice cream, inventing such bizarre flavors as Dastardly Mash, Chunky Monkey (with bananas), and Tuskegee Chunk (with peanut butter).

Timeline

1978:

Ben Cohen and Jerry Greenfield start Ben & Jerry's Homemade Inc. and open their first ice cream scoop shop in Burlington, Vermont.

1979:

In what becomes a yearly event, Ben & Jerry's celebrates its first anniversary by giving away free ice cream cones.

1980:

The company begins distributing ice cream to grocery stores and restaurants in the Burlington, Vermont, area.

1981:

The company opens a pint-packing plant in South Burlington, Vermont.

1982:

Greenfield retires from Ben & Jerry's.

1983:

The first out-of-state franchise scoop shop opens in Portland, Maine.

1985:

The Ben & Jerry's Foundation is established.

1987:

Ben & Jerry's introduces its popular Cherry Garcia ice cream flavor.

1990:

Annual profits are $77 million, a 32 percent increase over 1989.

1992:

The company opens a scoop shop and manufacturing plant in Russia.

1995:

Robert Holland becomes CEO.

1997:

The company introduces a line of low-fat ice cream.

1999:

Ben & Jerry's has net annual sales of $237 million, a 13.3 increase over 1998.

2000:

The British-Dutch conglomerate Unilever buys Ben & Jerry's for $236 million.

2002:

Unilever announces plans to greatly expand Ben & Jerry's presence in Europe.

The dense, rich ice cream was a hit, and the two friends who met in junior high had a successful business on their hands. While they still loved ice cream, neither man enjoyed the nuts and bolts of running a business, so they hired a local nightclub operator, Fred "Chico" Lager, to handle their finances. As sales continued to increase, the company celebrated its one-year anniversary in 1979. To celebrate, Ben & Jerry's gave out free scoops of ice cream all day. The promotion has become an annual even at Ben & Jerry's scoop shops nationwide.

Company Expands

In 1980, Cohen and Greenfield rented space in an old spool and bobbin mill in Burlington, where they began packing their ice cream in pint containers. They started selling the pints to small grocery stores and restaurants, which Cohen distributed from his old Volkswagen square-back station wagon. The pints of ice cream were a big hit and within a year, Cohen and Greenfield had to move the pint-packaging operation to a larger facility in South Burlington. In 1981, the first Ben & Jerry's franchise scoop shop opened in Shelburne, Vermont. This means that someone besides Ben and Jerry owned and operated the shop, but they were educated by the original owners in retailing and told what to sell and how much to charge.

During the first three years of scoop shop operation, Ben & Jerry's ice cream attained a kind of cult status in New England. Part of it was because the company used such high-quality ingredients to make an exquisitely rich product. Another reason, however, was that Cohen and Greenfield consistently come up with some pretty imaginative flavors and names for their ice cream. One flavor that was particularly popular was called Cherry Garcia in honor of Jerry Garcia (1942-1995), lead singer of the Grateful Dead.

The company continued to grow and in 1982, the original Ben & Jerry's scoop shop was demolished to make way for a parking lot. A new shop opened at the corner of Cherry Street and South Winooski Avenue in Burlington. The following year, the company expanded outside of Vermont, opening a franchise scoop shop in Portland, Maine. Ben & Jerry's also began to sell pints in Boston, Massachusetts, through independent ice cream distributors.

Business Pressures Mount

As the company soared beyond anything Cohen and Greenfield could possibly have imagined, both men began to experience the pressures of running a fast-growing business. Success also brought the two childhood friends incredible wealth. Suddenly, the pair of former hippies found themselves part of the corporate establishment, a position they both felt uncomfortable in.

Greenfield "retired" and moved to Arizona in 1982, and Cohen contemplated selling the business. "I had this horrible feeling come over me that I had become a businessman. Worse, that now I was just some kind of mindless cog in the overall economy," he told Inc. in 1988. Instead of putting the company up for sale, Cohen told People, they "decided to adapt it so we could feel proud to say we were the businessmen of Ben & Jerry's." So with Greenfield leaving most of the business operations and decisions to Cohen, the company adopted a philosophy that was unique in the world of high finance: it would maintain its goal of being profitable, but it would also demonstrate a commitment to social change and environmental responsibility

Nonprofit Foundation Launched

In 1984, Ben & Jerry's expanded its South Burlington packing plant. The Ben & Jerry's Foundation was established one year later, and Greenfield returned from Arizona to run it. Through the foundation the company donates 7.5 percent of its pre-tax income to nonprofit social and environmental programs. That same year, Ben & Jerry's had a setback when the company sued Pillsbury's Häagen-Dazs division for threatening to cut off suppliers who bought Ben & Jerry's products. The suit was settled out of court.

Cows on the Move

Ben & Jerry's is known for its whimsical advertising stunts. In 1986, the company launched the "Cowmobile," a mobile home that Cohen and Greenfield planned to drive across the country and distribute free scoops of ice cream. Unfortunately, the Cowmobile caught fire and burned just four months into the trip. No one was injured, but the expedition was cancelled. In 1987, Cohen and Greenfield revisited their plan and "Cow II" was born. When the stock market crashed in October 1987, Cow II appeared on Wall Street to hand out free scoops of "That's Life" and "Economic Crunch" ice cream.

In 1988, the company hired a management consultant, who helped the duo define their mission. In the company's 1989 annual report, Cohen reflected a new sense of purpose, mixing finances with funk: "We are becoming more comfortable and adept at functioning with a two-part bottom line where our company is measured by both our financial and our social performance," he wrote. "We are convinced that the two are intertwined. We will continue to refuse to run our business to make the short-term quarterly numbers look good." In spite of itself, the company continued to grow.

Staying "Weird" But Still Growing

Still, could two ex-hippies keep the "weird" in Ben & Jerry's, no matter how big it was getting? "The idea, I think, is to maintain the values of your culture and yet bring it along with you," Greenfield told Inc. "I mean, you don't want to stay stuck in the past. I think our company will be changed. I think there's no doubt about that. We just have to make it a good change."

By 1990, Ben & Jerry's total sales were $77 million, a 32 percent increase over 1989. Although now officially part of "corporate America," Cohen and Greenfield insisted that the socially conscious arm of the company's mission extend to its own employees. In 1990, the company opened a day-care center next to its Waterbury, Vermont, plant. The same year, it began a policy of paid time off for employees who adopt a child. One benefit that has been somewhat controversial is offering health insurance for gay partners of employees and for unmarried partners of employees.

In 1992, the company opened a scoop shop and manufacturing facility in Russia. It began looking for a new chief executive office (CEO) in 1994, conducting a two-pronged search, which included holding a "Yo! I'm Your CEO" contest. Entrants applied by submitting 100-word essays on why they deserved to be CEO. The company also hired a search firm to look for a new CEO. In 1995, Ben & Jerry's named Robert Holland to the position. He was found by the search firm rather than through the contest. Holland resigned as CEO in 1996.

Unilever Devours Ben & Jerry's

The date April 12, 2000, marked a turning point in the story of Ben & Jerry's. The company's board of directors sold the company with a conscious to Unilever, a giant British-Dutch consumer product conglomerate, for $326 million. A conglomerate is a group made up of a number of different companies. In this case, Unilever and its subsidiaries make a variety of consumer products, such as Dove soap, Lipton teas, and Skippy peanut butter.

Always Room for Change

At Ben & Jerry's Web site, the focus is just as much on social change as it is on ice cream. You can learn about special flavors made from special sources, including Rainforest Crunch (a discontinued flavor), which used nuts produced by rain forest trees, or Chocolate Fudge Brownie, made with chunks of brownies from a bakery in New York where formerly unemployed and homeless people work.

The company also hosts events and actively targets specific causes. In 2002, it partnered with the Dave Matthews Band (DMB) and a coalition of environmental organizations to form "One Sweet Whirled," a campaign to fight global warming. Global warming is a result of damage to the ozone layer, which surrounds the earth and protects it from the ultraviolet rays of the sun. The One Sweet Whirled ice cream flavor was launched in the spring, with proceeds from every sale going to DMB Bama Works Foundation.

Ben & Jerry's also pledged to take a close look at itself. Chemicals produced by industry are largely responsible for harming the ozone layer. A particular threat is carbon dioxide. The company has made a commitment to reduce its carbon dioxide emissions by 10 percent from 2002 to 2007. To do so, it will take several steps, which include looking into alternative forms of energy and educating employees on how to efficiently use energy.

After the merger, many people, including some of Ben & Jerry's most loyal customers, felt that Cohen and Greenfield had sold out to corporate America. In addition, the company's reputation for doing social and environmental good became tarnished by its connection to Unilever. For example, Unilever is criticized by animal rights groups for still testing some of its products on animals.

To announce the sale, Cohen and Greenfield released a joint statement: "Neither of us could have anticipated twenty years ago that a major multinational would some day sign on, enthusiastically, to pursue and expand the social mission that continues to be an essential part of Ben & Jerry's and a driving force behind our many successes. While we and others certainly would have preferred to pursue our mission as an independent enterprise, we hope that, as part of Unilever, Ben & Jerry's will continue to expand its role in society."

Unilever Replaces CEO

A few months after the sale, Unilever replaced Ben & Jerry's CEO Perry Odak with longtime Unilever executive Yves Couette. Cohen and Greenfield, who still sat on Ben & Jerry's board of directors expressed disappointment at the change and said they would reevaluate their role with the company. Unilever's main goals are to make the ice cream brand more globally recognized while maintaining Ben & Jerry's environmental and social commitments.

Many people think that Ben & Jerry's is a great place to work, and it is consistently listed as one of the best places to work in the United States. The company is noted for treating its employees to such perks as free ice cream, massages at work, and frequent company outings and events. Traditions include Elvis Presley day and an annual Halloween costume celebration.

"To preserve the brand, we need to make sure we still do things that are Ben-and-Jerry like," Couette said in a 2002 interview with Food Processing. He also said Unilever plans to increase the number of Ben & Jerry's scoop shops in the United States from 250 to 1,000. In 2002, Unilever announced plans to greatly expand Ben & Jerry's presence in Europe, including opening seventy-five scoop shops in Spain over the next four or five years.