A Stock Scoop for Ice Cream

By Charles P. Alexander

No one goes to a supermarket to seek investment advice, but some shoppers can find a hot tip in the freezer department. "Scoop up our stock," reads the message on cartons of Ben & Jerry's ice cream. Customers are invited to call a toll-free number for a preliminary prospectus on a new issue of 500,000 shares of Ben & Jerry's Homemade Inc. Expected share price: $11 to $13.

Only seven years ago, Ben Cohen and Jerry Greenfield were struggling entrepreneurs who sold ice cream in a single-scoop shop that they had opened in a renovated gas station in Burlington, Vt. Now Cohen and Greenfield, both 34, distribute their unusual flavors, including mint with Oreo cookies and Heath Bar crunch, throughout the Northeast, from Maine to Maryland, and to selected stores in Indiana, Tennessee and Colorado. Sales in the first half of 1985 reached $3.6 million, twice the pace of last year.

Ben & Jerry's is getting fat on America's growing appetite for so-called super-premium ice cream, brands made with natural ingredients and plenty of butterfat. Haeagen-Dazs, the ice cream that has the pseudo-Scandinavian name but is made in America by Pillsbury, pioneered the superpremium field and spawned such imitators as Frusen Glaedje from Dart & Kraft and Alpen Zauber, which is produced by a small Brooklyn company. Americans last year gobbled an estimated 66 million gal. of superpremium ice cream, up about 12% from 1983.

But while Haeagen-Dazs has catered to customers who think that gourmet foods are chic, Ben & Jerry's has tried to create an image of simple, down-home wholesomeness. Instead of being decorated with a map of Scandinavia, Ben & Jerry's cartons show a picture of the two be spectacled, bushy-haired owners, who look like refugees from a '60s commune. Pals since they were in high school in Merrick, N.Y., Cohen and Greenfield decided in 1977 that making ice cream would be more fun than what they were doing. Having failed to get into medical school, Greenfield was then a lab technician in North Carolina, and Cohen was a pottery teacher at a school in New York. After taking a $5 correspondence course in ice cream making from Penn State, the two set up shop in Burlington and gradually began to peddle their product to restaurants and stores in the area. Their chief promotional gimmick was a free sample. They once gave away ten tons of ice cream to a man who built the "world's largest sundae" for The Guinness Book of World Records.

When Ben & Jerry's began expanding rapidly in the 1980s, the company got a frosty reception from its bigger competitors. Cohen and Greenfield charged last year that Pillsbury was trying to keep a lock on the Boston market by threatening to cut off supplies of Haeagen-Dazs to distributors who also carried Ben & Jerry's. Turning adversity into a publicity ploy, Ben & Jerry's gave customers thousands of T shirts and bumper stickers that poked fun at the Pillsbury corporate symbol by asking: WHAT'S THE DOUGH BOY AFRAID OF? Without admitting any wrongdoing, Pillsbury settled the complaint out of court.

Some investment houses are skeptical that Ben & Jerry's can hold its own in an ice cream war with Pillsbury and Dart & Kraft. But Cohen and Greenfield are trying to win over the doubters in the best way they know. To announce their stock offering last month, they stood on Wall Street in blue jeans and T shirts and handed out free ice cream cones. --By Charles P. Alexander. Reported by Leslie Whitaker/New York

With reporting by Reported by Leslie Whitaker/New York