Distribution Strategy of Ben & Jerry’s

Ben & Jerry’s market their products primarily through:• Supermarkets.• Grocery stores.• Convenience stores.• Franchised and Company-owned ice-cream shops.• Restaurants & • Mail-order.• International Licensing.

Supermarket Distribution

Concentrates heavily on national distribution through supermarkets as:• Supermarkets are growing business .• Accounted for much of company’s sales growth.• Whooping sales of $97 million in 1991 to $155 million in 1995.

Most of these Supermarkets were reached through wholesalers selected by Ben and Jerry’s.

Selection criteria of wholesalers:

Ben & Jerry’s are much more selective about who sells their products.

• Wholesalers must have adequate access to retail outlets.

• Wholesalers must demonstrate that they operate socially conscious business.

Distribution

• In 1987, Ben & Jerry’s entered into a distribution agreement with Dreyer’s.

• Dreyer’s will the master distributors outside of New England, Pennsylvania, Texas, and Florida.

• They became distributors with exclusivity in Supermarkets and similar outlets.

The Agreement provided Ben & Jerry and advantage of:• Easy access to supermarket outlets.• Increased sales through already present huge customer base

of Dreyer’s.

Franchising

As of December 2001, there were eight company-owned, 99 international and 218 North American franchised Ben & Jerry’s ice cream parlors.• Company’s franchise agreements are for a ten years term with

option to renew for another ten years.• The franchise is granted an exclusive area.• The franchise must purchase all its ice-creams and specified

items from designated local distributor.• Each must pay an initial franchisee fee of $25000 per store.• The franchise also pay an advertising fee equal to 4 percent of

its total gross sales.

Mail Order

This strategy by Ben & Jerry’s is quite different from other Super-premium ice-cream segments:• The company offers customers an option of ordering

ice-creams online or by mail.• Ice-creams and frozen yogurts are packed in dry ice

and shipped anywhere in United States.• Customers can choose from a wide variety of flavors.

International Licensing

In 1987, Ben & Jerry’s began to expand internationally.• Granted exclusive license to manufacture and sell its ice-

creams in Canada and Israel.• The licensee can license new franchisees to sell Ben & Jerry’s

ice-creams.• The licensee must pay an initial fee, plus royalties on the

franchises.• The agreement is for a ten-year period with the option to

renew.• The company reserves the right to terminate an agreement if

the licensee does not abide by the terms.

Obstacles In RussiaIn 1990, Ben & Jerry’s entered into a joint venture agreement called Iceverk, in Soviet Union, in the state of Karelia.The company faced difficulties as:• Russian markets were still emerging markets.• Lacked a developed wholesale distribution system that will

deliver products on time, in good conditions.• Distribution in Russia is often controlled by organized crime.• Lack of customer service viewed by the Management.

Ben & Jerry’s created their own diverse distribution system in order to mitigate these hurdles in Russia.

To boost International growth:

• The company created International expansion teams.

• International expansion teams helped in expansion through proper resource allocation, network building, efficient distribution system while keeping the values of company intact.

• The market now include such countries as UK, France and Ireland.