BEN & JERRY'S FLAVORS CEO SEARCH ONETIME UPSTART WORKS ON TRANSITION AS IT EVOLVES INTO MATURE COMPANY
"Able to leap tall buildings in a single bound" is hardly a job description for most CEOs, but it's one of the dozen "requirements" for Ben & Jerry's Homemade's ideal chief.
Then again, Ben & Jerry's, with its wacky flavors and social conscience, has never been seen as a typical multimillion-dollar corporation. The company, however, remains capable of making some pretty impressive leaps on its own.
Even without a seasoned CEO, current management has responded successfully to increasing competition and changing consumer demands, and it's not waiting to lay plans for the future.
Ben & Jerry's isn't looking for a CEO as savior but as a professional who can oversee the business on a consistent, day-to-day basis.
It was largely their countercultural appeal that allowed Ben Cohen and Jerry Greenfield to take a $5 correspondence course on ice cream making, an abandoned gas station and a $12,000 investment in 1978 as the building blocks for today's $150 million company.
Perhaps the biggest challenge Ben & Jerry's faces is how to maintain that image as it moves closer and closer to a typical corporate structure.
"When a company hits $100 million, it's in a new category," said Holly Alves, director of marketing. "The business becomes much more complex and competitive. We're definitely changing, transitioning. We're not a small little underdog upstart anymore."
Ben & Jerry's has clearly had some growing pains. The marketer built its reputation in the $300 million superpremium segment with unusual flavors featuring chunky ingredients, from the more traditional, like nuts, to cookie dough.
But in the fall of 1992, archrival Haagen-Dazs Co. sought to steal Ben & Jerry's thunder with Extraas, its first chunky line.
Ben & Jerry's faced other challenges as well: All superpremiums have suffered from Americans' growing health orientation and flagging interest in high-fat foods, while economic worries have given new life to lower-price private labels. Ben & Jerry's also was slow to expand internationally. As a result, its stock has come under pressure.
It was June, the start of the high-sales summer season, when Ben & Jerry's announced its CEO search, but the company had already taken steps to regain momentum.
Weeks earlier, Ben & Jerry's launched eight Smooth, No Chunks flavors, returning Haagen-Dazs' fire. The line got $4 million in support with the company's first national TV ads, created in-house and directed by filmmaker Spike Lee. A major print and outdoor campaign also backed the introduction.
The company calls the line a major success, already winning 6.5% of the superpremium segment.
Ben & Jerry's also followed Haagen-Dazs into the U.K. this summer, a move that heartened Wall Street.
Sales through the summer show the company's efforts have borne fruit. For the 52 weeks ended Sept. 4, Ben & Jerry's U.S. sales rose 8% to $124.8 million in supermarkets alone; Haagen-Dazs was down 6% to $143.7 million, according to Information Resources Inc.
Sales of superpremium frozen yogurt also were impressive: Ben & Jerry's rose 15% to $43.9 million and increased its share by 1.3 points to 32.7%, while Haagen-Dazs rose 9% to $26.5 million but dropped 1.9 share point to 19.7%.
"They went through a troubled period, and they've done a lot to correct it," said Howard Waxman, editor of New York-based Find/SVP's Ice Cream Reporter. "They've shown themselves willing to do things they've resisted in the past, like entering Europe and using advertising.
"Their move into Europe is particularly revealing. You could say it was overdue-or you could say they waited for exactly the right time. Haagen-Dazs and local companies, pushed to improve, had already made the market conscious of superpremiums. Then Ben & Jerry's came in and could be seen as that crazy American company with a genius for getting publicity."
Ben & Jerry's stock has remained close to its low of 11 for the past year, with a high of 20, but analysts expect an upswing.
"They're doing better than they were," said analyst Steven Galbraith of Sanford C. Bernstein & Co., New York. "People bailed at some disappointing earnings earlier this year and the announcement of the CEO search. But when the most recent IRI figures get out, I think the stock will come back."
Ben & Jerry's hasn't waited until naming its new CEO to make future plans. Among the moves scheduled for the coming year are the introduction of a non-fat frozen yogurt line and, at the other end of the scale, a major new indulgent flavor; an expansion of ice cream shops, which have been holding at about 110 stores; and entry into more European markets, with Dutch and French speaking countries possibly next.
The new CEO is expected to be named in the first quarter of 1995. Mr. Cohen has held the CEO title, and will stay on as chairman. The new executive will have a big hand in any future marketing plans, but it's doubtful there will be a major strategy shift. Advertising is expected to play a larger role than it has in the past, but Ben & Jerry's also will rely on cause-related efforts and guerrilla public relations tactics as much as ever, company executives said.
Even the CEO search illustrates Ben & Jerry's promotional talents. Nearly 25,000 responded to the company's call for candidates, and media from around the world covered the story.
"The response took us by surprise," Ms. Alves said. "It could have been a negative story [about trouble at the company]. But we made it fun and interactive, and the response has been great."
Of those 25,000 hopefuls, Ms. Alves said, a surprisingly high 20 are viable candidates. Separately, recruitment agency Russell Reynolds, New York, is also looking for potential CEOs. Ben & Jerry's has made at least one concession to lure a professional to the job: It has scrapped the requirement that the top executive's salary can be no more than seven times the lowest salary.
But the new CEO will have to work within the company's freewheeling spirit, Ms. Alves said, adding, "The person will need to be willing to burn his suit and value our social commitment."
Wherever Ben & Jerry's goes and whoever enters the executive ranks, don't expect the company to completely separate from its roots.
"We're in a teen-ager stage," Ms. Alves said. "That means pimples and bad hair days, but it doesn't mean the adult will be totally different from the child. We're evolving."