Ben & Jerry’s Homemade Ice Cream Inc.: Keeping the Mission(s) Alive

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392-025 Ben & Jerry’s Homemade Ice Cream Inc.: Keeping the Mission(s) Alive

only slightly. Combined, Frusen Gladje and Steve’s had almost 10% of the market, but this was down from 25% roughly two years earlier and was still shrinking.

Ben & Jerry’s Position

By 1990, Ben & Jerry’s had established itself as a strong #2 in the super premium ice cream market nationwide and was the fifth largest ice cream maker of any type. Ben & Jerry’s products were sold in bulk to its own retail scoop shops and to the food service industry, but the vast majority of its sales were through grocery stores in pint containers. Since most outlets carried only one or two brands of super premium ice cream, being #1 or #2 was crucial in the business.

Ben & Jerry’s distributed its products through a variety of channels. The largest distributor, Dreyers Grand Ice Cream Inc., was also the producer and marketer of Edy’s grand ice cream. Dreyers also produced approximately 25% of Ben & Jerry’s ice cream in a plant in Indiana. This arrangement had been struck when Ben & Jerry’s capacity had not increased rapidly enough to meet demand. Interested in penetrating new markets quickly, Ben & Jerry’s management saw the Dreyers arrangement as a temporary stopgap. In order to maintain the made-in-Vermont character of Ben & Jerry’s ice cream, Vermont dairy products were shipped to Indiana for processing in the Dryers’ plant. The arrangement caused some controversy for the company, and the press had run several stories speculating about how the relationship between the two companies might evolve.

Ben & Jerry’s ice cream came in a wide range of innovative flavors, including Cherry Garcia and Chunky Monkey. Except for the temporary arrangement with Dreyers, it was made in Vermont with only Vermont dairy products. The higher costs of using Vermont dairy products depressed margins but were thought to be outweighed by the image of quality and purity which the policy conveyed. The ice cream contained no artificial ingredients or preservatives, although some of the candy and cookies used in various flavors did. The company claimed to add 1½ to 2½ times more flavorings to its products than any other competitor. The rumor inside the company was that Ben had a sinus problem and thus had difficulty tasting any flavor until it was quite potent.

In 1988 the company began to make Peace Pops and Brownie Bars to supplement its product line and to gain shelf space. In 1989 it added Ben & Jerry’s Light, with one-third less fat and 40% less cholesterol than its regular super premiums. A frozen yogurt line was planned for 1991.

By 1990, two plants were operating at full capacity and a third was planned. Approximately 330 people worked at the company, with over 220 in the manufacturing operations at these facilities; fewer than 20 people were employed outside of Vermont. A strong commitment to quality and an emphasis on manufacturing skills pervaded the organization.

Although Ben was by far the largest shareholder, stock in the company was publicly traded (see