BEN AND JERRY S HOMEMADE ICE CREAM INC KEEPING THE MISSION ALIVE
Ben & Jerry’s main issue Can Ben & Jerry’s keep its social model alive while growing from “adolescence to adulthood” ? ... Presentation of Ben & Jerry’s and of its environment 1. Ben Cohen and Jerry Greenfield It’s quite impossible to introduce the firm Ben & Jerry’s without alluding to its founders who gave the firm a so specific and unusual spirit : Ben Cohen and Jerry Greenfield. While most corporate managers are under constant pressure to meet their shareholders’ demands, Ben and Jerry despised business traditional biases based on short-term interests and profit-making. ... That’s the way they (and particularly Ben Cohen) introduced “caring capitalism” throughout a wide variety of educational, environmental and social events. ... That’s why Ben & Jerry’s developed the “Statement of Mission” made of three interrelated parts : - Product Mission based on quality, innovation and the “made in Vermont” - Social Mission, the most meaningful mission, based on quality of life - Economic Mission based on growth, shareholder value and care of employees The fact that the firm paid more attention to social problems (e.g with its 5-to-1 salary ratio) than costs and profits triggered a boost in the sales, and showed that most people were ready to pay more for a Ben and Jerry’s product because of its social carefulness. ... Evolution of Ben & Jerry’s on a highly competitive market Growth : One of the strength of Ben & Jerry’s is its very high growth rate (nearly 60% a year in average). This growth came from many factors : the penetration of new geographic markets, the introduction of pint-sized containers to sell its ice creams, flavor differentiation (which allows the firm to dispose of the slower moving flavors and to target higher margin products), product quality… The ice-cream market and the necessity of innovation : This market generates very high profits compared to the other products sold in supermarkets (nearly 5 times more on average). Nearly all households eat ice creams (94%) and this product is considered an “affordable luxury”, which underlies the necessity of considering products quality rather than price. That’s why Ben & Jerry’s entered the superpremium ice cream market which qualities are taste and cream. But it also adapted quickly to market evolutions, especially when the consumers favored non-fat ice creams, with the commercialization of frozen yogurts. Thus, partly because of the regular changes of consumers habits, innovation lies at the heart of Ben & Jerry’s strategy : not only new products (yogurts, light ice milk…) but also constant new flavors, a more sophisticated distribution system (based on “direct store delivery”) and new promotion programs.