Chapter 1 - Ben and Jerrys

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Ben and Jerry’s: The Men Behind the Ice Cream
Daniel Richards
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.
Background:
Ben Cohen and Jerry Greenfield were childhood friends born four days apart in Brooklyn, New York, in
1951. You could say that ice cream runs in their veins. During his senior year of high school, Ben drove
an ice cream truck. After high school, he attended and dropped out of various colleges in the Northeast,
eventually leaving his studies altogether to teach pottery on a working farm in New York's Adirondack
region, where he also dabbled in ice cream-making.
Jerry started on a more traditional path. After graduating high school, he attended Oberlin College to
study medicine. Jerry worked as an ice cream scooper in the school’s cafeteria. Upon graduating, Jerry
returned to New York to work as a lab technician, while applying to medical school without success.
During his lab tech days, he shared a Manhattan apartment with Ben. After moving to North Carolina for
a few years, Jerry reunited with Ben in Saratoga Springs, N.Y., and they decided to go into the food
business together.
At first the pair thought about making bagels but decided the necessary equipment was too expensive.
Instead, they settled on ice cream. They decided Burlington, Vt., was an ideal location for a scoop shop
because it was a college town without an ice cream parlor. They took a $5 course on ice-cream making
and in 1978 opened the first Ben & Jerry’s in a converted Burlington gas station.
Growth:
The original scoop shop became a community favorite thanks to its rich ice cream and creative flavors.
Ben and Jerry also made it a point to connect with the community, hosting a free film festival and giving
away free scoops on the first anniversary of the store, a tradition that still continues. In 1980, the duo
began making pints to sell to local grocers. In 1981, they expanded this operation.
Business increased significantly. In 1983, the company opened its first non-Vermont franchise in Maine,
and signed a deal with a Boston distribution company. Signature flavors were unveiled during the 1980s
– including New York Super Fudge Chunk and Cherry Garcia – and by 1987 sales were at $32 million. In
1988, President Ronald Reagan named Ben and Jerry the U.S. Small Business Persons of the Year, and by
the year’s end the company was operating shops in 18 states.
Creative Flavors:
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.
Mrs. Lewyckyj
American Entrepreneur
Ben and Jerry’s Article
Page 1
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:
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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
Mrs. Lewyckyj
American Entrepreneur
Ben and Jerry’s Article
Page 2
Ben and Jerry’s Article
Name
Period
Directions: After the reading the article, answer each question below
1.
What were three things that lead to the creation of Ben and Jerry’s Ice cream?
2. What did Ben and Jerry initially do to get people into their store?
3. What was Ben and Jerry’s original competitive advantage?
4.
What two companies were the biggest competitors to Ben and Jerry’s?
5.
What did Ben and Jerry’s do to increase its market share?
6. What could the ice cream market look like today, if there was no competition?
7. Why is competition a good thing in a free enterprise system?
Mrs. Lewyckyj
American Entrepreneur
Ben and Jerry’s Article
Page 3
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