Ben & Jerry's looks for sales

Vermont Business Magazine, Jan 1994 by Edelstein, Art

Oh, for another Chocolate Chip Cookie Dough ice cream flavor. That all-time grand slam flavor pushed sales into the stratosphere at Ben & Jerry's Homemade Inc in Waterbury in 1992, but no more.

Vermont's seemingly invincible ice cream company is not folding its doors, of course, but after several years of very strong growth in the super premium ice cream market, the sales growth is slowing down a bit. The realities a very competitive marketplace and fickle American taste buds have hit home.

"Our growth was much more modest than in previous years. This year it's about 4 percent through the third quarter," said marketing executive Alan Parker. In past years, he said, growth was better than 35 percent. "We had an unexpected decrease in the rate of growth," he said.

Sales from 1991 to 1992 grew from $97 million to $132 million, much of it due to the unbelievable popularity of the cookie dough flavor. "A runaway," said Parker. Also, that year saw the introduction of the company's frozen yogurt product line. But without a new flavor, or new product line, in 1993, the company saw its growth curve falter.

"We've reached a point where we have basic geographic distribution in the country," said Parker. Also, sales growth of ice cream in general has been flat. Parker attributes the flat growth to dietary considerations, but, more importantly, he sees distribution of ice cream at a level difficult to top. Frozen yogurt sales still have a way to go, he added.

Beyond those factors are pricing pressures, a strong anchor on growth. This is especially true with arch competitor Haagen Dazs. That company is dropping its pint prices to as little as 99 cents in some areas in its attempt to regain the market share it lost to Ben & Jerry's. But Parker said his company's market share in the super premium category is now 40-41 percent, which is a hair's breadth away from Haagen Dazs.

"Our sales growth this year roughly mirrors the growth of the entire industry," said Parker. "Nobody is growing at a rapid rate."

"We didn't have the grand slam home run of a new flavor. In 1992, Chocolate Chip Cookie Dough was 20 percent of all the company's ice cream sales," said Parker. For 1994, he said, the company will introduce a new product line with "extraordinary flavors."

"We feel we need growth to get to goals we've set," said Parker. The new ice creams will receive more advertising back up than has been the case with past products. "We can't call ourselves the upstart underdog any more, we're a mature company," he said. "The environment is extremely competitive. We can't just rely on the fact that we're nice guys and gals any more (to sell ice cream)."

The low growth has meant a bit of an adjustment for the company, while also dampening the company's image on Wall Street. But this has been good for the company in a way, said Parker. "We feel we've been successful in managing the company under new circumstances and have kept our costs under control."

"You can get addicted to powerful growth, and we were looked at by the investment community as a growth company," said Parker.

In 1994, the company's long-planned ice cream plant in St Albans will go on line. This will allow the company more flexibility in manufacturing. Parker said the new plant should give the company a chance to test more flavors without slowing production.

Also there will be a push to grow the number of scoop shops, now numbering 100, more aggressively. This could mean a push into the Canadian market, said Parker.