Ben and Jerry’s Split the Ice Apart
The late founder of Apple Inc. Steve Jobs once said: “If you want to make everyone happy, don’t be a leader, sell ice cream!”
However, does the ice cream selling business make everyone happy?
The entrepreneurship journey of Ben Cohen and Jerry Greenfield, the two founders of Ben & Jerry’s, one of the top 5 ice cream brands in the world, was adventurous and full of joy.
Contrary to the stories of successful entrepreneurs who were of the “winner’s team” in life, the first half of Ben and Jerry’s life experience was that of a typical “loser”. The two of them had known each other since high school, and both did exceptionally badly in academics, with Ben constantly facing expulsion from school.
■ Ben (left) and Jerry each took out US$ 4000 to start a business.
After graduating from high school, although Jerry successfully completed 4 years of pre-medical studies, no university was willing to enrol him for undergraduate studies.
On the other hand, Ben, who applied for many universities but was not accepted, found work as a pottery instructor and taxi driver.
The two buddies who were muddling along in life finally came to a realisation in year 1978, when they reached the age of 27. They thought that they could not continue to live in their respective ways and came up with the idea of starting up a business. They each took out USD 4000 and decided to start up a business that was related to food and beverage.
They originally planned to start up a bagel shop, but found that the meagre cash they had was not even enough to pay for the expensive bagel-making equipment. After some discussion, they decided to sell handmade ice cream. However, both of them had no idea how to make ice cream at all!
Unlike how we can instantly search for “How to Make Ice Cream” on YouTube nowadays and self-learn, the internet was not yet widespread during that time, hence self-learning can only be achieved by way of correspondence courses.
Ben and Jerry, who had zero business experience, did not know how to do bookkeeping and calculate the break-even point as well. To handle this shortcoming, they both bought about 30 booklets published by the American government about starting up a business and slowly learned.
An Unexpected Idea during Winter
When it came to choosing a location for their shop, to avoid competition, Ben and Jerry went to the length of choosing Burlington in Fremont, a place with a cold climate for 7 months in a year, to set up their shop!
The average temperature in Burlington was only 7.8 degrees Celsius, and this was why many handmade ice cream sellers avoided this place. However, with their unwavering tenacity, Ben and Jerry created their own success in this land of winter.
Ben and Jerry’s first ice cream shop was a renovated old petrol station. The rent was cheap due to the building being old, but the traffic there was quite good, so Ben and Jerry refurbished what had been an old and dilapidated petrol station into a cosy home-style ice cream shop.
To stand out among competition, Ben & Jerry’s introduced special flavours for their ice cream, such as honey coffee, mocha walnut, mint Oreo cookies and many more.
Just coming up with creative flavours was not enough to boost sales, so Ben and Jerry even introduced an innovative marketing tactic, which was the colder the weather, the cheaper the ice cream!
They named the promotion “Penny off Per Celsius Below Zero Winter Extravaganza”. When the temperature was lower than 0 degrees Celsius, for every -1 degrees Celsius, the price for their ice cream would decrease by 1 penny.
The local residents loved this promotion, they even looked forward to the weather turning cold, because during winter Burlington frequently reaches a temperature of down to -20 degrees Celsius. This caused the ice cream with an original price of 52 cents to become a lot cheaper.
In 1981, Ben and Jerry’s ice cream was hailed by Time Magazine as the best ice cream in America.
Although Ben and Jerry’s business was doing well, they did not earn much profit. So, what was the problem? It turned out that Ben and Jerry were not good at controlling portions. To keep customers happy, they consistently put more ice cream on the cones generously.
■To keep customers happy, Ben (left) and Jerry put more ice cream on the cones.
In order to not disappoint customers, these two men who started out the ice cream business out of joy, introduced packaged ice cream by chance, and they sold it by way of wholesale to grocery stores and supermarkets. This action unintentionally paved a new way for their business, and made it possible for even more customers to sample their products.
After changing their strategy, Ben and Jerry were hugely rewarded, their business grew quickly through the wholesaling of their ice cream.
Splitting the Ice Apart
The two buddies sold their ice cream happily and their business was gaining popularity. This attracted the attention from Pillsbury, the mother company of the well-known ice cream brand Haagen-Daz. Ben and Jerry faced a tough war, and their opponent, Pillsbury, was not just any Tom, Dick and Harry. They were one of the leaders of the food industry!
To maintain the market share of Haagen-Daz, Pillsbury started to block Ben and Jerry’s sales channels. Pillsbury told the distributors that if they chose to take up Ben & Jerry’s, they would lose the opportunity to sell Haagen-Daz.
This “method of punishment” was very effective, many distributors did not want to lose the right to sell Haagen-Daz, so they were forced to cease selling Ben & Jerry’s.
Ben and Jerry understood that if they were to declare war against Pillsbury which had a market value of USD 4 billion, it would be impossible to rival their financial resources, therefore shelling out money on marketing or pursuing legal action did not seem to be a wise move.
In view of this, the two adaptive men turned the tables against their opponent, and shifted the competition to somewhere conducive to them, which was by defeating their enemy through the power of public opinion.
Ben and Jerry used the mascot of Pillsbury, “Doughboy”, as their target, and created the slogan: “What’s the Doughboy afraid of?”. Posters with this slogan were pasted on public transportation vehicles and it piqued the curiosity of consumers.
There was even a toll-free number on the posters. Anyone who dials the number will hear Ben and Jerry explain why their ice cream sales channels were blocked and how they were being bullied.
If consumers were willing to show their support, they can leave their contact and Ben and Jerry would send them the “What’s the Doughboy afraid of?” poster. Consumers can even buy T-shirts printed with the slogan.
By doing this, Ben and Jerry obtained advantages in three aspects. They invoked the sympathy of consumers, gained widespread free advertisement from the mass media and won their channels of sales back in the end!
Under the pressure of public opinion, Pillsbury had no choice but to revoke their previous condition, and they could no longer stop distributors from selling Ben & Jerry’s ice cream.
In 1991, Ben & Jerry’s had a turnover of USD 97 million, with a net profit of USD 37 million. In 1994 their turnover increased to USD 148 million.
The Passion for Ice Cream that Set the Whole World Ablaze
To Ben and Jerry, the biggest aim of starting a business was not just to make money, instead it was how to make society a better place.
Because of this, the corporate philosophy of Ben & Jerry’s was to service the community. After expanding the business and becoming CEOs, Ben and Jerry was not used to it and jokingly said to each other that they were no longer just ordinary ice cream sellers.
Holding true to their original intentions, Ben and Jerry thought that giving back to society was their biggest responsibility. Ben & Jerry’s corporate philosophy was committed to social rights movements, and they initiated various social movements for same-sex marriage, criminal law reform and protection of nature.
At the same time, when it came to their production and packaging materials, Ben & Jerry’s upheld strict recycling standards. In 2001, they were selected by the Financial Times as one of the top 20 most respected companies in the global environmental protection field. Ben and Jerry’s public image of social responsibility was deeply rooted in the heart of the public.
■ Ben (left) and Jerry scooping ice cream for the public in Zuccotti Park, New York.
Quitting after Acquisition by Unilever
On 3 August 2000, Ben & Jerry’s Board of Directors, without agreement from the two founders, sold off the company to global consumer goods giant Unilever for USD 326 million.
Due to the fact that the shares of the company had been organised, Ben and Jerry had no choice but to accept this transaction. Although Unilever promised to continue to let Ben & Jerry’s run independently, inclusive of their social rights movements, Ben and Jerry insisted on quitting, and they left the company’s management.
For Ben and Jerry who were both about 70 years old, the most precious thing was their friendship. After decades, they still put up with each other, frequently get together for tea and laugh about life.
What was once a small business evolved to become a huge enterprise spanning 35 countries.
What Ben & Jerry’s has taught us:
1. No matter how bad the cards we were dealt with, we still have to do our best: Ben and Jerry faced expulsion in school and no university wanted to accept them, they only had USD 4000 but they dared to start up a business, they had no idea how to make ice cream but learned until they mastered it! In the end they even became one of the top 5! Ben and Jerry’s success tells us an ancient truth: with persistence and determination (and constant repetition), even if we are dealt with less opportune conditions, we can still make it work!
2. Be innovative and change, like how David defeated Goliath: Ben and Jerry chose to sell ice cream in an icy land, but they welcomed spring in a land of winter using innovative pricing. Facing the threat of a market leader, they were like David, who knew how to use the right tools and right way, to defeat the giant Goliath. Their ability to adapt enabled them to weather through storms.
3. Win respect by holding true to social responsibility: The acquisition of Ben & Jerry’s by Unilever sparked public reluctance and opposition. Everybody believed that Ben and Jerry contributed a lot to society, and their image of upholding social responsibility was deeply rooted in the hearts of the people. In a country-wide research in 1999, Ben & Jerry’s was one of the most respected companies. Even though Ben and Jerry seemed like fools and lunatics, they won over everybody and earned the most applause and respect.