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Ben & Jerrys homemade, INC.

Strategic Alliances for Profit and Social Good


Ben & Jerrys Homemade, INC. manufactures superpremium ice cream products.
Appropaching business in an unconvencional manner, Ben & Jerrys believes that it is
running a unique experiment: proving that business can be democratic, compassionate,
politically principled, and profitable all at the same time. Headquartered in Waterbury,
Vermont, Ben & Jerrys mission is to give consumers a good, high quality ice cream product,
while designating a portion of the profits to support social and environmental issues.
Company Background
Ben & Jerrys was founded in 1977 by two friends, Ben Cohen and Jerrry Greenfield. The
company features superpremium ice cream, frozen yogurt, and sorbet created from natural
ingredients. The first Ben & Jerrys retail store opened in a renovates gas station in
Burlington, Veromnt, but the first factory was not opened until 1984. By 1985, sales had
reached almost $10 and soaredto almost $155 million by 1995.
Ben & Jerrys interes in socialcausesis not just an interesting beginning to a lucrative
business or a marketing gimmick - Ben & Jerrys walks the talk. In 1985, the company
established the Ben & Jerrys Foundation, which donates 7.5 percent of company pretax
profits to an ever-changing list of charities. By 1996, this 7.5 percent has amounted to
$513,189 per year. Robert Holland, Jr., the newly hired CEO, has continues this vision
ofcaring capitalism whit Ben & Jerrys.
Ben & Jerrys success has not been without its ups and downs. One of the downs
occurred in 1985 when Ben & Jerrys entered the lucrative novelty ice cream market with its
Peacea Pops (an alternative Dove Bars and Jell-O Pudding Pops). After six months, salves
were 50 percent short of projections, mainly because the product floppedin supermarkets.
Apparently consumers were not willing to pay for a superpremium product in supermarket
channels. However, when the product was shifted to convenience store channels, sales,
increased by 60 percent.
On the up side, Ben & Jerrys has been able to capitalize on its customers loyalty,
based on its reputation as a concerned corporate citizen. In 1984, for instance, the company
marshaled grass roots support to counteract Pillsbury effort to prevent distribuitors that
carried its Haage-Daz ice cream from selling Ben & Jerrys ice cream products. Ben &
Jerrys efforts included a bumper sticker campaign, an 800 number, and a media kit
containing a complaint letter to Pillsbury aand a letter to the state attorney general. Ben &
Jerrys low-budget, highsocial-consciousness campaign resulted in considerable media hype,
paintinf Pillsbury as the bad guy and Ben & Jerrys as the underdog that represented
everymans interest. This positive marketing approaches.
Products
In addition to pint ice cread, Ben & Jerrys has expanded its product line to include
frozen yogurt, sorbets, and novelty items such as Peace Pops and Brownie Bars. The
company also has a line of Conscious Concotions, specialty ice crea products whose
manufacture promotes quality of life and social responsibility in a specific community.
For istance, one flavor of Conscious Concotions is Chocolate Fudfe Brownie ice
cream and frozen yogurt, produced in the Greyston community in Yonkers, New York. At
this plant, previously unemployed and underskilled people produce more than 2000 pounds

of brownies per day. The Greyston Community Network uses the profit for such programs as
gousing and job training.
Rainforest Crunch ice cream and Peace Pops use cashews and nuts from Brazilian
rainforests. As an alternative to destroying these resources, profits from the ice cream are
reinvested in the people who harvest the nuts. The money is used to develop factories
cooperatively owned and operatedby the rainforest people.
Maines Passamaquoddy Indian tribe sells its blueberry crop Ben & Jerrys to make
Wild Maine Blueberry ice crea. There is a message about First Group, the nonprofit
organization that supports Native American life, on evert container of this product. The
profits support the Indians economic development and way of life.
Another flavor of Conscious Concotions is Fresh Georgia Peach Light. Ben & Jerrys
buys all the peaches from a family farm in Georgia as a way to support the endangered
livelihood of the family farmer.
Marketing Strategy
Ben & Jerrys has areputaion for producting gourmet quality natural ice cream, and
for creating innovative lighthearted promotions. Most of Ben & Jerrys marketing revolves
around sponsoring peace, music, and art festivals all over the country. During these events,
the company draws attention to many social causes as it promotes its products. Ben & Jerrys
uses a more 6 precent of its earnings to advertise, and most ofthis is used to fund music
festivals. The primary goals is to use advertising dollars to return something to the consumer
and promote consumer activism.
With a low marketing budget, Ben & Jerrys relies heavily on free publicity to
generate product awareness. Says one industry analyst, does not spend much on
advertising, but they are very good at marketing. By supporting a variety of social causes, it
is able to stay in the news often enough to make it pay off.
The company also relies on sample promotions. At all company-sponsored events, it
distributes ice cream, sometimes free of charge. Ben & Jerrys also promotes its products
through the renowned circusmobile. This unique vehicle travels from city to city
performing free vaudeville shows and giving out samples. In keeping with the companys
social consciousness, the circusmobile bus uses solar energy to supply the power needed
for the shows. Another promotional strategy is to provide free ice cream to any legitimate
charitable gropu that asks for it.
Sice 1995, Ben & Jerrys has also expanded onto the Internt to provide company
information from flavor lists to whens and wheres of the social awareness events. The
company has also creatyvley used the packaging of some of its products, such as the Peace
Pops, to invite customers to learn about these social causes on its Website.
Distribution Strategy
Ben & Jerrys markets its pint ice crem, frozen yogurt, sorbet, and novelty itmes at the retail
level primarly through supermarkets, grocery stores, convenience stores, and similar outlets.
The company also markets ice cream and frozen yogurt in 2/2 gallon bulk containers through
franchised and company-owned ice cream shops and through restaurants. Mail order channels
are also used. And licensing arrangements have been developed for international sales.
Exhibit I provides a diagram of Ben & Jerrys distribution channel structure.
Supermarket Distribution

Ben & Jerrys concentrates heavily on national distribution through supermarkets.


Supermarkets are a growing business, accounting for much of companys sales growth, ffrom
$97 million in 1991 to $155 million in 1995. Most of these supermarkets are reached through
wholesalers selected by Ben & Jerrys.
The companys distribution strategy is different from other superpremium ice cream
companies. Ben & Jerrys is much more selective about who sells its products. Firs,
wholesalers must have adequate access to retail outlets as well as trucks and facilities to
handle the icea cream at proper temperature ranges. Second,wholesalers must demonstrate
that they operate socially conscious businesses. As one executive stated, We have an
opportunity not only to create alliances with businesses that shareour social vision, we also
seek to influence and encourage other businesses to use their resources to address social
concerns that are part of their own experience.
Ben & Jerrys ice cream is distributed in New England, Pennsylbania, Texas, Florida,
the mid-Atlantic, and the West Coast, through independent regional ice cream distribuitors.
Outside these areas, the ice cream is distributed through Dreyers Grand Icea Cream and its
subsidiary, Edys Grand Icea Cream. Some subdistribuitors are also used in these areas, to
serve retail channel members. In Vermont and upstate New York, company trucks are
sometimes used to sell directly to retailers.
In 1987, Ben & Jerrys entered into a distribution agreement with Dreyers. this
agreement stated that outside of the New England, Pennsylvania, Texas, and Florida areas,
Dreyers would become the master distribuitor with exclusivity in supermarkets and similar
outlets. Ben & Jerrys main goal when entering into this agreement was to gain access to the
supermatket outlets. Because Dreyers already distributed its own ice cream through
supermarkets, Ben & Jerrys believed the agreement would make it easier to gain access. The
ice cream that Dreyers markets is not in the superpremium category, so there is no direct
competition with Ben & Jerrys.