Ben & Jerry's the international leader in handcrafted ice cream with a social conscious is analyzed in this strategic marketing report. Developed on an integrated public-private business prospectus, the Company set the tone for trailblazing product and brand identity configurations with an ethic of social responsibility and global sustainability long before it was customary. Although now subsidiary to the products and services giant, Unilever, Ltd. In the United Kingdom, Ben & Jerry's retains its Vermont beginnings both in grassroots image and Americana flavor in ice cream. Well-known for instigating social change through commercial planning, situation analysis of the Company's early and unique marketing platform prior to the sea of new market concepts is long overdue.
Table of Contents
Objectives & Issues
Bought by British conglomerate, Unilever, Ltd. In 2000, U.S. based Ben & Jerry's performs as a boutique product line within the novelty food segment of the umbrella Company's global business retail sector. Known for its flavor names such as Chunky Monkey, Phish Food, and Cherry Garcia, the ice cream corporation begun in 1978 in a renovated gas station in Burlington, Vermont, Ben & Jerry's now strategizes contiguous marketing interests with its acquisition partner, and in continuity with the origin of its high profile sell.
Often called the "merry pranksters" of the food industry, the Company has made a niche position for itself on the international ice cream market through stand up activist PR, intended to follow the original ideological impetus behind the product and its founders. Early to the environmental and social responsibility platforms now made standard within the tertiary activities deemed "core competencies" of corporate strategic plans, reinvention at Ben & Jerry's is met through innovation and quality in support of the Company's mission and values, through a tri-partite framework of objectives toward realization of product, economic and social goals.
Even prior to the supra-visionary statement of making the 'mom and pop' Vermont foodie company an international superstar sold and distributed by Unilever, the Company promoted its product through retail experience stores, franchising some seven hundred and fifty Ben & Jerry's SCOOP SHOPS worldwide (Hoovers, 2010). Philanthropic expansion created a seamless vision of Ben & Jerry's as revenues generated a portfolio of a minimum of $1.1 million of pretax profits then earmarked through the entity's charitable organization, the Ben & Jerry's Foundation and its cause oriented mission and programs annually. The company also "sponsors PartnerShops, which are Ben & Jerry outlets independently owned and operated by nonprofit organizations, such as Goodwill Industries" (Hoovers, 2010). Macro to micro interests are approached according to trend analysis within the Company, and personal concerns serve to inform decision on other causes from global warming to saving family owned and operated agricultural firms.
Fostered by tales of Cohen and Greenfield packing the ice cream pints for sale in local grocery stores in early 1980s, emergence of the company as a small franchise chain coincided with Time magazine hailing the product as "the best ice cream in the world." Just one year later, Ben & Jerry's Homemade had gone public in a Vermont-only stock offering in 1984 (Hoovers, 2010). Five years after the first commercial cream, the Company churned over $4 million sales for the year. By 1986, they had signed a national distribution agreement with Dreyer's Grand Ice Cream, and succeeded in reaching customers in 18 states and Canada. Twelve years into the relationship with Dreyer's relations grew sour, and in a surprise offer to Haagen-Dazs, a formerly adverse entity that was party to pre-litigation settlement with Ben & Jerry's over distribution dispute agreement with the larger ice cream corporation in the 1980s.
Product innovation at Ben & Jerry's has been flavor-centric, yet narrow and slow in terms of universal market response. Research and development of a proximate competitor to meet the challenge of the explosion of fat-free mania ice-cream alternatives in the early 1990s, was responded to with introduction of its frozen yogurt product in 1992, yet not followed by a nonfat frozen yogurt brand identification until 1995. Just prior to the release of the latter, Ben & Jerry's suffered its first period loss and Cohen responded with resignation as CEO of the corporation.
The transition to Unilever was instigated by the entrance of Jostein Solheim, a 14-year veteran to Unilever in 2010, with the expertise of running its ice cream division operations in five countries, and principle to a new strategic plan for the partnership's North American operations directed at the roll out of new products (Hoovers, 2010). Co-founders Ben Cohen and Jerry Greenfield whom proffered the start-up in the 1970s, made this move toward Solheim with the belief that the life-cycle of the former enterprise could only be regenerated with his exceptional insight into the market. Ben & Jerry's currently retails product to regional markets in Asia, Europe and North American, as shown in the list of countries in Table 1.
Countries of Operation
Table 1. Countries of Operation, Ben & Jerry's (Hoovers, 2010).
When purchased by Unilever in 2000 for approximately, $326 million the Ben & Jerry's deal was structured to allow the ice-cream maker to continue its brand identity marketing strategy based on social missions, and to the inclusion of both co-founders whom offer oversight and lend personal image to the product. The Unilever market position is described in the financial overview in Table 2.
In spite of the influx of investment and strategic leverage to logistics and visibility promoted by the relationship with Unilever, as the company disaggregated, control over activities was less coherent. Identity management issues have plagued the company image in the last half decade. In 2006, Chief Financial Officer (CFO), Stuart Wiles was convicted of embezzling $300,000 from the company during his tenure at Ben & Jerry's, from May 2000 to May 2004 (Hoovers, 2010). Poor partnership control also ensued, and the same year marked the end to the Michael Foods egg supplier relationship in response to public pressure over the inhumane treatment of its chickens.
Resource operations management is guided by Ben & Jerry's "Values-Led Sourcing" (VLS) program. The initiative involves ingredient supplier stakeholders in support of ethical management of natural resources, and economic opportunities for disadvantaged workers. Steps taken in achieving a Values-Led Sourcing program include the following measures articulated as what 'We' did in Table 3:
We began the transition of our United States pint packaging to Forest Stewardship Council (FSC)-certified paperboard;
We added Chocolate Macadamia, a new flavor with Fair Trade/Fairtrade ingredients to our global line up;
We brought all of our European dairy purchasing into the Caring Dairy program;
We accelerated the transition to using only cage-free eggs in our U.S. supply chain;
We also made several commitments to grow existing VLS programs over the next several years, including a plan to move to Fair Trade sourcing for all eligible ingredients across our global portfolio by 2013; and a plan to expand our Caring Dairy program in Vermont.
Table 3. Outcomes to the Ben & Jerry's Values-Led Sourcing program, 2009 (Ben & Jerrys, 2010).
Reporting on the program figures indicates that 40% of the raw material expended (i.e., ingredients, dairy, packaging) for North American production went to Values-Led Sourcing initiatives, up from 38% percent in 2008; and comparatively, in Europe, 53% from 42% percent in the same year (Ben & Jerry's, 2010). Completion of the Company's full scale-up of its Caring Dairy program in 2009 concluded the strategy to accelerate VLS across the board in the EU. Anticipation that VLS spend percentage should continue in the next several years holds import to the strategic marketing plan, as ambitious scale-up of several more VLS initiatives will fulfill press release and advertising goals.
Fair Trade suppliers are given priority where small-scale farmers from developing countries are involved in offering the highest quality ingredients. A global marketplace perspective within the Company's business strategy translates to a voice of social justice in support of partners and the sustainable growth of the company's long-term stakes in planetary peace. Marketing of this message is readily achieved through articulation of alignment with small entities vested in fair trade activities, and through brand identification of the corporation's FairTrade logo; assurance that farmers who grow key ingredients used in our ice cream are paid a fair market price in support of their sustained agreement to organized democratic work cooperatives in pursuit of environmentally sound farming practices (Ben & Jerry's, 2010). Free trade supplier partners involve public commitment to product ingredients discussed in the product storyboard in Table 4.