Ben & Jerry's Growing Pain

Ice cream is a sweet treat that few can resist. Although vanilla is the most popular flavor in the U.S., there are a seemingly endless number of varieties and manufacturers. One of the best-known purveyors is Ben & Jerry’s, the brand synonymous with funky flavors like Cherry Garcia and Chunky Monkey and a groovy Vermont vibe.

One reason for the quick popularity of Ben & Jerry’s was its unique flavor combinations. All new flavors were invented by Jerry, usually without any test marketing. Some 1980s flagship flavors include Chunky Monkey, Rainforest Crunch and Economic Crunch, scoops of which Ben & Jerry’s served up for free on Wall Street following the stock market crash of Oct. 19, 1987.

Growing Pains
The company’s path hasn’t always been as smooth as its ice cream blends. Ben & Jerry’s faced off with Häagen-Dazs over distribution rights, leading to lawsuits against Häagen-Dazs’ parent, the Pillsbury Company, in the mid-1980s. As the company’s rapid growth continued, it became obvious to the founders that they would need someone with more business acumen to keep the business running. After allowing customers to apply for the job in the “Yo! I’m Your CEO” contest, the company in 1995 selected Robert Holland, a veteran of McKinsey & Co. Ironically, Holland was found by a search firm, not through the contest.

Holland’s hiring brought the company to a crossroads. Ben and Jerry had become the brand’s icons. There was concern that the company would lose its informal hierarchy and unique culture under Holland’s leadership. Ben & Jerry’s had always had a strict pay scale ratio for its management, which it had to break when hiring Holland.
Furthermore, Ben & Jerry’s was going through a trying time in the marketplace. Although the company had made its name with wacky flavors and chunky mix-ins, the most popular ice cream flavor in America was – and remains – plain vanilla. The firm had released a line of “Smooth, No Chunks!” flavors to capture that segment of the market that preferred less funky flavors.

While the super-premium ice cream market was growing, so was the competition. Häagen-Dazs and Dreyer’s were major players. Ben & Jerry’s had outsourced some its production to Dreyer’s in order to reach customers in the western U.S. Now that Dreyer’s was becoming more of a competitor, Ben & Jerry’s had to worry about its dependence on a competitor for manufacturing and distribution.

Holland stepped down in 1996. The following year, Perry Odak became the new CEO, and sales that year were about $174 million. In late 1999, the firm announced it had received notice of interest from other large firms, and in 2000 international food giant Unilever purchased the Ben & Jerry’s brand for $326 million, although the deal called for Ben & Jerry’s to be operated separately from Unilever’s other ice cream brands.

Social Mission: This unique arrangement allowed Ben & Jerry’s to continue to run its business in a socially conscious manner, which had been a trademark of the brand since its inception. Some examples of this mission include:

* An original scoop shop made of recycled materials
* Creation of a “Green Team” in 1989, focusing on environmental education throughout the company
* A company bus equipped with solar panels
* The use of hormone-free milk in its products
* A commitment to reducing solid and dairy waste, recycling, and water and energy conservation at the company’s facilities (Daniel Richards - entrepreneurs)


See also: sour sally


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