Business icon offers inside scoop on doing well and doing good
Jerry Greenfield believes opportunities abound for entrepreneurs to enjoy the same degree of success Greenfield and partner Ben Cohen enjoyed in turning a single ice cream shop into a $300 million ice cream empire.
In addition to doing well, though, entrepreneurs can do good in emulating Ben & Jerry’s commitment to social and environmental causes, Greenfield said.
While profits still depend on delivering quality products and services, more and more businesses realize the additional benefits of a social mission, he said. “It gives you a way to connect with your employees, with your customers, on a basis that is just more profound.”
Greenfield, half of a dynamic duo that made Ben & Jerry’s ice cream a household name, delivered the keynote address at Entrepreneurship Day at Mesa State College in Grand Junction. In his address and a telephone interview with the Business Times, Greenfield discussed both the history of Ben & Jerry’s and what he foresees as the future of entrepreneurship.
Greenfield grew up on Long Island and met Cohen in junior high, where the pair comprised what Greenfield described as the two slowest and fattest kids in gym class.
Greenfield went on to attend college and study pre-med, but was unable to gain admission to a medical school. Meanwhile, Cohen attended and dropped out of a succession of colleges, Greenfield says.
The two reunited in New York City, where Greenfield worked as a laboratory technician and Cohen worked in a string of different jobs. “We were pretty much failing at everything we tried to do,” Greenfield said.
That’s when they decided to pursue a different dream of going into business for themselves and settled on an ice cream shop.
After some research that included a $5 correspondence course on making ice cream, Cohen and Greenfield launched Ben and Jerry’s Homemade in 1978, operating an ice cream parlor out of what was formerly a gas station in Burlington, Vt.
Greenfield said they tried to obtain a bank loan to help finance their venture. Since they didn’t know how to write a business plan, they copied a plan for a pizza parlor in New York City — with some minor changes. “We crossed out slice of pizza and put in ice cream cone.”
They received a $4,000 loan they combined with $8,000 in savings to purchase used equipment to make ice cream and green lumber with which to remodel the gas station.
Ice cream sales went well during the summer, but not so well during the cold Vermont winters. Greenfield said Cohen got the idea to sell ice cream to restaurants and other retail outlets and eventually starting packaging ice cream in pint-sized containers. “That how Ben & Jerry’s stumbled into ice cream manufacturing and distributing.”
Distribution soon grew beyond Vermont into large markets, but Ben & Jerry’s came up against a corporate competitor in Häagen-Dazs and what was at the time its parent company, Pillsbury. Häagen-Dazs threatened to pull its products from distributors that also carried Ben & Jerry’s.
Ben & Jerry’s filed a lawsuit, but also launched a public awareness campaign asking, “What’s the doughboy afraid of?” Greenfield said. The campaign included stickers placed on products with a hotline number people could call. The David and Goliath-style battle sparked media coverage, including stories in the Boston Globe, New Yorker magazine and Wall Street Journal. Pillsbury ultimately relented and agreed not to impose any exclusive agreements, which led to national distribution for Ben & Jerry’s, Greenfield said.
As Ben & Jerry’s grew, the company needed additional financing to help pay for expanding operations. Rather than turn to venture capitalists, Greenfield said the company initially turned to Vermont residents with a unique in-state stock offering that raised $750,000.
The operation continued to expand, and in 2000 was acquired by Unilever, a conglomerate that sells a wide variety of products in more than 180 countries around the world. Greenfield said he and Cohen opposed the sale, but were unsuccessful in returning Ben & Jerry’s to private ownership. “It was not something we wanted to have happen.”
Cohen and Greenfield are no longer involved in managing Ben & Jerry’s, serving more as what Greenfield described as “ambassadors” for the company and promoters of the social and environmental causes they support.
More than 30 years after Cohen and Greenfield opened a single ice cream parlor, Ben & Jerry’s has grown into a $300 million ice cream empire. The company distributes premium ice cream and ice cream novelties in U.S and foreign markets through convenience stores, restaurants, supermarkets and franchise Ben & Jerry’s “scoop shops.”
Well before the Unilever acquisition, Greenfield said he and Cohen grew increasingly uneasy they’d become cogs in a corporate machine and contemplated getting out of the business.
They decided instead to redefine success not only in terms of profitability, but also the ability of the business to improve the quality of life. Greenfield said they discovered a “spiritual” aspect to business. “As you give, you receive.”
Ben & Jerry’s established a foundation and earmarked 7.5 percent of pre-tax revenues to fund the organization. The foundation supports small, grassroots efforts to promote social and environmental justice, said Greenfield, who serves as president and one of three trustees. Greenfield said he acts mostly as a “rubber stamp” in affirming the funding decisions made by Ben & Jerry’s employees.
Ben & Jerry’s purchases brownies for its chocolate fudge brownie ice cream from a New York bakery that provides jobs to those who are otherwise hard to employ and funds a foundation that supports low-income housing, a day care and other community projects.
Ben & Jerry’s also instituted a program for PartnerShops, scoop shops that are independently owned and operated by community based nonprofit organizations. Ben & Jerry’s waives the standard franchise fees and provides additional support to help nonprofits operate the businesses.
Greenfield said the entrepreneurial environment in the United States fosters opportunities for other new ventures to enjoy the same kind of success as Ben & Jerry’s. “Oh, absolutely. There are so many small startups coming out of people’s garages.” He cited Twitter as one example of the plethora of new and fast-growing tech companies.
Although there’s a trend toward consolidation and larger business operations, entrepreneurs actually enjoy an advantage because they can better serve small and niche markets, Greenfield said. And there are other benefits to starting out small, he added. “Actually, starting small gives you the time to really learn your craft and become experts at what you’re doing.”
But even as entrepreneurs seek profits, they also should pursue their passions and values, Greenfield said. While many businesses are successful without social missions, more companies have become aware of social missions as a competitive advantage.
When Ben & Jerry’s started out, that approach was rare, he said. “We were considered nut cases.” But the trend since has changed. “It’s being demanded by customers, encouraged by employees.”
Either way, entrepreneurs still must deliver quality goods and services, Greenfield said. “It was very important to the success of Ben & Jerry’s. But if the ice cream didn’t taste good, it wouldn’t have mattered.”