For New Age Ice-Cream Moguls Ben and Jerry, Making 'Cherry Garcia' and 'Chunky Monkey' Is a Labor of Love

updated 09/10/1990 at 01:00 AM EDT

originally published 09/10/1990 01:00AM

It is the annual meeting at Ben & Jerry's Homemade, Inc. Beneath a festive white tent on the ice-cream company's lush Vermont lawn, Ben Cohen, the sneaker-clad co-founder, is fielding questions from his shareholders.

"Could we make the cartons tamper-proof?" asks one.

"How can you buy cookies from RJR Nabisco?" asks another.

"We've been asking ourselves the same question," says the creator of Mint with Oreos. When a brave soul from New Jersey dares to inquire about dividends (which Ben and Jerry forgo), the crowd of 350 boos loudly. Ben answers calmly that the earnings will be reinvested, and shareholder Lowell Krassner steps up to say, "Just owning stock in this company is a dividend in itself." The boos turn to wild applause, and the group heads outdoors for ice cream, a hula-hoop contest and a yo-yo show.

Welcome to Ben and Jerrys, where business is never as usual. Founded in 1978 by Cohen and his best friend, Jerry Greenfield, both 39, the company has grown from a 12-flavor miniparlor in Burlington, Vt., into a $58 million-plus company with 90 franchise stores—the second largest purveyor of superpremium ice cream in the country. But growth has not transformed a friendly concern into an impersonal bureaucracy. "Early on," says Jerry, "we knew that if we stayed in the business, it was because of the support of a lot of people, so it seemed natural to want to return that support."

Stockholder meetings that resemble county fairs aren't the half of it. Cohen and Greenfield are fiercely committed to the welfare of their employees-providing them with free health-club memberships (to work off their three free pints a day) and affordable day care, among other distinctive perks. The bosses are equally committed to the welfare of the community. A full 7.5 percent of the pretax profits goes to a nonprofit foundation whose beneficiaries include a group dedicated to redirecting national defense funds for peaceful uses. A portion of the profits from tours of the company's Waterbury, Vt., headquarters, goes to charity as well. Proving just how little they're in this for the money, company mandate dictates that neither Ben nor Jerry can earn more than five times the salary of the lowest-paid staffer.

It is a corporate philosophy that makes Cohen and Greenfield anomalies in the business community-but then they never set out to be businessmen. They met as children in Merrick, N., where Jerry's father was a stockbroker and Ben's an accountant. They had in common a love of ice cream and the bond of being outsiders: "We were the two slowest, chubbiest guys in the seventh grade," says Jerry. "We were nerds." After graduating from Oberlin, Jerry was rejected twice by medical school and went to work as a lab technician. For his part, Ben studied pottery at Skidmore, drove a Manhattan cab and later taught crafts. The idea to make ice cream their métier came about "because we wanted to do something that would be more fun," says Jerry, who had never lost touch with Ben. "We also wanted to live in a rural college town."

They started out small—signing up for a $5 ice-cream correspondence course and renting an erstwhile gas station in Burlington, a college town whose funky charm appealed to them both. It took some time to perfect their recipes. "I once made a batch of rum raisin that stretched and bounced," Jerry remembers. But their rich, offbeat flavors—Heath Bar Crunch, Dastardly Mash—soon made the dips a hit. When winter came they expanded—selling pint containers decorated with pictures of their own scruffy selves. "The image we wanted was grass roots," says Ben.

Considering their lack of business acumen, staying small didn't look like it was going to be a problem. "We had no idea what was going on financially," says Jerry. "We actually closed one day to pay our bills. We put up a sign that said, WE'RE CLOSED BECAUSE WE'RE TRYING TO FIGURE OUT WHAT'S GOING ON." Recruiting local nightclub owner Fred "Chico" Lager to be chief operating officer, however, helped bring order out of financial chaos, and sales began soaring.

"When Jerry and I realized we were no longer ice-cream men but businessmen, our first reaction was to sell...we were afraid that business exploits its workers and the community," says Ben. "We listed the company with a broker and actually had a buyer. We ended up keeping it. but we decided to adapt it so we could feel proud to say we were the businessmen of Ben and Jerry's."

First, in 1984, they financed the new plant they needed by taking the company public—and offering stock to Vermonters only (a policy they've since changed).

Next came the Ben & Jerry's Foundation, set up to fund community projects with company profits. As a gesture of goodwill, they began dispensing free ice cream at every opportunity. In 1986 they even crisscrossed the country in a mobile home they dubbed the cowmobile, handing out free scoops. Back in Vermont, Jerry took it upon himself to "help people who work here feel that it's more than just a company, that they want to be here." Accordingly, he formed a committee that initiated free massages, an Elvis day and a Halloween costume contest.

The company's rise wasn't entirely without stumbles. The two weathered philanthropic fizzles like the planned adoption of a New York City subway station that ended in a bureaucratic stalemate. They fought battles with the ice-cream establishment: In 1984 B&J filed a suit (eventually settled out of court) against Häagen-Dazs after the company threatened to cut off distributors who also bought Ben and Jerry's. And they faced the occasional problem filling executive slots because of the strict 5:1 salary ratio rule.

These days, Ben and Jerry live close to their Waterbury offices (Jerry with his wife, Elizabeth, a psychologist, and their son, Tyrone, 1; Ben with his wife, Cindy, also a psychologist, and their infant daughter, Aretha). They still enjoy their work. "Jerry sometimes comes in at 4 A.M. and works the line and just hangs out," says Dave Barash, B&J's director of human resources. They still get a kick out of each other. "Our biggest argument ever was about ice-cream chunk size," says Jerry. And they still can't quite get over the unlikeliness of their empire: "I would say it's all quite a shock to us, "says Jerry. "And quite frankly it's a shock to anyone who knows us."

—Kim Hubbard, Toby Kahn in Vermont

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