Analysis of Ben & Jerry's Ice Cream

Ben & Jerry's is a leading producer and distributor of ice cream in the United States today. The HSagen-Dazs ice cream company is its leading rival, and the only company that is ahead of Ben & Jerry's in terms of sales. Ben & Jerry's started as a rather unusual company with an unusual philosophy, and it has been this philosophy which has boosted the company into its leading position -- it delivers a high quality product from a personally-owned-and-operated business with a family atmosphere for employees and customers alike. It is this underlying difference between Ben & Jerry's and most other companies that has been much noted in the press, by customers, and even by rivals. Ben & Jerry's is likely to give its competition a strong fight over the next several years because of its image, its product, and its success to date -- a success which has given it a certain momentum.

One of the most successful enterprises in the food business in recent years has been Ben & Jerry's Homemade, Inc., a producer and distributor of ice cream and related products. The company has risen to number two in this business, just behind Grand Metropolitan's HSagen-Dazs, and Ben & Jerry's had 38.6 percent of the 1992 market for super premium ice cream. Ben & Jerry's also has 95 franchised and 4 company-owned ice cream shops across the country. The number one flavor for the company is Chocolate Chip Cookie Dough, and this product accounted for 17 percent of 1992 sales.

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The introduction of these Extras was designed precisely to recapture market share from Ben & Jerry's. HSagen-Dazs has a 43.3 percent share of the market at the end of 1992, compared to 28.7 percent for Ben & Jerry's, and these two companies led the superpremium market, which also includes Kraft's Frusen GlSdjT and Steve's Homemade ice cream. A representative of Ben & Jerry's stated that the company was not concerned about the changes at HSagen-Dazs for several reasons. First, it was noted that offering additional products might lure some customers away, but there is always room for a good variety of flavors in the market. More than this, it was noted HSagen-Dazs and Ben & Jerry's simply cater to different customers (Goerne, 1992, 8). HSagen-Dazs believes that there is at present a backlash against some of the health-consciousness that caused a growth in ice milk, frozen yogurt, and other light ice cream. Higher-fat ice cream is seen as a treat, an indulgence, a way of rewarding oneself. People will not eat it every day, but they will reward themselves with it from time to time. The higher price for this product also plays into this view, for the ice cream is seen as a luxury by people who want a little luxury in their liv

Category: Business - A