Some observers might have thought Ben & Jerry's Homemade a more appropriate match for the three-day festival of peace and love redux. After all, the entrepreneurial companywith the hippie connections seemed to have Haagen-Dazs on the ropes two years ago. But Ben & Jerry's is financially troubled and looking for a CEO.
Haagen-Dazs-mired in the late '80s with a high-fat, high-price image-is back with solid sales, a more contemporary product line and a growth plan.
"We have re-emerged as a '90s brand," said Mike Paxton, president of Haagen-Dazs Co., the Teaneck, N.J.-based subsidiary of the British food and beverage conglomerate Grand Metropolitan.
The first tangible sign of success came last year, when Haagen-Dazs reclaimed the leader's role in the $300 million U.S. superpremium ice cream segment from Ben & Jerry's. Haagen-Dazs ice cream sales in supermarkets rose 10.7% last year, to $153 million, giving the brand an all-time high 6.7% share of the ice cream market.
For the year ended July 10, Haagen-Dazs maintained its lead: The brand had a 6.4% share of the $2.3 billion total ice cream market, to Ben & Jerry's 5.3%, according to Information Resources Inc.
"Ben & Jerry's was closing the gap, but Haagen-Dazs clearly made a comeback last year," said Howard Waxman, editor of Find/SVP's Ice Cream Reporter.
It was a comeback built in large part on Haagen-Dazs crossing a big hurdle, Mr. Paxton said: swallowing its pride. "The biggest hurdle was really part of the persona of the brand; it was recognizing we had competitors in the marketplace, and we needed to respond directly to them," he said.
The first step was acknowledging that Ben & Jerry's had built a great niche with ice creams loaded with what the industry calls "mix-ins": chocolate to nuts to cookie dough.
"It wasn't like Coke and Pepsi; Haagen-Dazs and Ben & Jerry's were almost competing in two separate segments, with product lines that appealed to different types of consumers," Mr. Waxman said.
In fall of 1992, Haagen-Dazs-the purveyor of elegant, classic flavors-came out with Extraas, its ingredient-laden answer to Ben & Jerry's. Extraas flavors like Cappucino Commotion and Carrot Cake Passion accounted for much of 1993's sales increase; the Extraas line this year has been expanded into frozen yogurt and frozen novelties.
The new line's appeal to youth gave Haagen-Dazs ammunition against Ben & Jerry's, which appeals to a younger consumer than Haagen-Dazs' classic flavors.
Extraas was introduced with a nontraditional buy: mostly outdoor and transit boards, and bus posters.
But Ben & Jerry's wasn't Haagen-Dazs' only problem. Haagen-Dazs had to bounce back from sluggish ice cream sales, a staggering shop system, and rapid management turnover at the CEO level and in key marketing posts.
And perhaps most important, having built a 30-year word-of-mouth reputation as the most indulgent ice cream on the market,Haagen-Dazs had to come to grips with the '90s consumer looking for lower-fat foods. Could Haagen-Dazs mean indulgence without also entailing high-fat content?
The answer to that dilemma would not come from the ice cream business. Unlike Ben & Jerry's and other lower-price brands, Haagen-Dazs refused to introduce a light ice cream.
"There is no room for reformulation; our basic ice cream recipe has not changed since it was introduced in 1961," said Terry Olson, marketing director for the company's ice cream business.
The key to getting Haagen-Dazs in step with consumers was realizing the brand didn't have to mean just indulgent ice cream, but "indulgence at all levels," said Mr. Paxton, who made this his "operative phrase" on taking over as president three years ago.
Haagen-Dazs followed the market in launching a frozen yogurt line. But the first attempt wasn't a big success, posting sales of only $25 million last year, IRI reported. So this year Haagen-Dazs has reintroduced its frozen yogurt with reduced fat levels-from 96% fat-free to 97% fat-free-and added calcium for a marketing edge.
Haagen-Dazs also added to its low-fat portfolio with last year's box-office success, its sorbet-and-yogurt frozen novelties, and is testing the sorbets in pints this year.
Only 100 calories, the frozen yogurt bars feature sorbet coatings reminiscent of more intense, European-style sorbets. But Haagen-Dazs attributes their success not only to low-fat content, but also to consumer desire for portion control.
Whatever the reason, the raspberry sorbet-coated frozen vanilla yogurt bar last year immediately surpassed the classic chocolate-and-vanilla-ice cream bar as Haagen-Dazs' best-selling novelty.
"We're making major inroads," said Claire Huang, marketing director for what the company describes as its "good for you" lines. "I'm not going to say there's really high awareness of Haagen-Dazs as a low-fat dessert, but it's not a disconnect for people anymore."
Despite extending into lower-fat segments, Haagen-Dazs has not given up on its cornerstone business, superpremium ice creams.
Observers like Mr. Waxman believe despite consumers' fat concerns and the sometimes-jarring numbers ice cream marketers now are forced to print on labels, there always will be a market for superpremium ice cream.
To buttress the brand in the U.S., the company is working to rebuild its network of stores, decimated in the 1980s by overexpansion and a few bad franchisees.
The shop network has been trimmed by about 15%, to 250 U.S. stores now, with all but a handful still franchised. And the company is about halfway through the process of renovating existing stores with lighter, brighter decor.
Shops now get the newest Haagen-Dazs flavors first. They use the umbrella Haagen-Dazs campaign from BBDO Worldwide, New York, but just hired Marketing Corp. of America, Westport, Conn., as the chain's first promotion agency of record.
Once the renovation process is complete, Marketing Director Jeff Carpenter said Haagen-Dazs will begin opening new stores in selected markets. In early 1995, one of those will be the first U.S. "flagship" store-importing a concept that's been critical to launching Haagen-Dazs overseas.
The flagship stores in Europe offer a broad menu, including baked goods. Placed in high-traffic, prominent locations such as London's Covent Garden, the shops introduced Haagen-Dazs to European consumers; the company followed with supermarket distribution.
It's only one of the concepts Haagen-Dazs is borrowing from its growing European operation. Though developed in the States, the sorbets were requested by and first introduced in France. Tony McGrath, VP-marketing in the U.S. for just a year now, started overseas.
And though Mr. Paxton insists there was no corporate direction to do so, this summer's U.S. TV commercials from BBDO are a toned-down version of the playfully sexy $20 million print campaign running in Europe from Bartle Bogle Hegarty, London, and similar ads in the Far East from J. Walter Thompson, Tokyo.
Currently the company spends $5 million on U.S. advertising. After having grown largely by word-of-mouth and running its first-ever U.S. advertising in 1990, Haagen-Dazs wants to be convinced a big ad campaign can help sales.
But if the TV campaign, running this year in its key metro markets, proves successful, the company promises to expand the TV buy. Haagen-Dazs in the past has focused a lot of marketing energy into strategic sampling or sales at events.
"It's critical that we share best practices across divisions," Mr. Paxton said.
The best practices will be needed for Haagen-Dazs to meet Mr. Paxton's two simple goals: the $1 billion mark in worldwide sales by the end of '95. And becoming "the No. 1 global brand of frozen desserts."
Laurel Wentz contributed to this story.