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Tuesday, December 3, 2013

What’s The Doughboy Afraid Of?

doughboy

One of the great things about running a successful business is that, as your success and wealth grow, so do your influence and power. Of course, that’s not always good news for other, competing start-ups.

Just look at the chilling tale of Häagen-Dazs vs. Ben & Jerry’s. This story is an oldie, but a goodie.

Reuben Mattus was a Polish immigrant. He was 47 when he decided to start his own ice cream company with his wife, Rose Mattus. They called it Häagen-Dazs, which as you may already know, means absolutely nothing. It’s two made-up words meant to look Scandinavian.
Let’s go back five years from that, to 1978 in Burlington, Vermont. Ben Cohen and Jerry Greenfield, “a couple of hippies,” as they have described themselves, took a twelve thousand dollar investment– four thousand of it borrowed– and opened an ice cream scoop shop in a renovated gas station. They called it Ben & Jerry’s, and within a few short years, it became a staple of Burlington, Vermont. They opened their first franchise in 1981, and in 1983, the same year Pillsbury bought up Häagen-Dazs for eight figures, Ben & Jerry’s opened their first out-of-state franchise. Within a year, the two companies would be, more or less, at each others throats.I probably don’t need to tell you that Häagen-Dazs was a huge success. In 1983, Häagen-Dazs was sold to the Pillsbury company for 70 million dollars.

See, while the Ben & Jerry’s ice cream scoop stores were nice, the real business was in the cartons of ice cream they sold in grocery stores.

When Ben & Jerry’s began moving into Boston, the “Doughboy” tried to throw his weight around. Häagen-Dazs threatened to pull their product from grocery stores and other distributors unless those distributors signed an agreement that would basically make them the exclusive premium ice cream brand in all of Boston.

It might sound a little outrageous now, but it makes sense. Pillsbury had just paid 70 million for this name brand. Of course they were going to try and protect it. Besides- Häagen-Dazs was a huge seller, one distributors couldn’t afford to lose.  Ben & Jerry’s were certainly doing well for themselves– the company brought in about 4 million dollars that year– but they simply couldn’t compete with Häagen-Dazs on that level.

As for ice cream in Boston, it seemed Ben & Jerry’s was out of the game before it even began.

But the folks at Ben & Jerry’s weren’t going to go down without a fight.

In his book, Ben & Jerry’s: The Inside Scoop, former Ben & Jerry’s CEO Fred Lager writes:

We decided up front to cast ourselves in a fight against Pillsbury, not Häagen-Dazs. Häagen-Dazs versus Ben & Jerry’s was one ice cream company against another. Pillsbury versus Ben & Jerry’s was the Fortune 500 against two hippies.

Tactically, it was a brilliant move. After all, Häagen-Dazs was more than just “another ice cream company,” It was a truly inspiring entrepreneurial achievement, an embodiment of the American Dream. Pillsbury on the other hand? Well, it was a bit easier to pass them off as a faceless corporation.

And it was that thinking which begat their now infamous slogan, “What’s the doughboy afraid of?”

They plastered Boston with the slogan. They took out ads on buses. They handed out flyers. They made T-shirts. They took out an ad in Rolling Stone magazine.They set up a toll-free number that people could call to learn more about the situation, and they printed that number  on every single pint of Ben & Jerry’s ice cream they sold.

“Do you think the Doughboy is afraid of two guys working with 23 people in 4,000 square feet of rented space?” one of their flyers read. “Do you think the Doughboy is afraid he’s only going to make $185.3 million in profits this year instead of $185.4 million? Do you think the Doughboy is afraid of the American Dream?”

A little verbose, maybe. Hyperbolic even. But it worked. Ben and Jerry were able to successfully cast themselves as the underdog victims of a cruel, faceless corporation. And the media was starting to take notice.

As the deadline Pillsbury had set for distributors to stop carrying other brands of premium ice cream neared, publications like the New York Times, the Wall Street Journal, and the Boston Globe started running pieces on this “David vs. Goliath” battle.

Finally, Pillsbury gave up. After months and months of back-and-forths, an agreement was reached: Pillsbury would not punish distributors for carrying Ben & Jerry’s ice cream, and Ben & Jerry’s would take the 1-800 number off of their ice cream pints.

For Ben and Jerry the battle was worth the time and effort.  After all, they got more publicity in that short time than years and years of advertising would have gotten them. As for Pillsbury? Well, let’s just say they’re doing alright. But it just goes to show you- never underestimate your rivals, no matter how big or small. A little bit of marketing savvy and willpower can go a long way, as the Doughboy found out.

Resources

http://www.rezoom.com/money/from-the-vault/read/5679/

http://www.amazon.com/Ben-Jerrys-Inside-Business-Conscience/dp/0517883708/ref=sr_1_1?ie=UTF8&s=books&qid=1255026590&sr=8-1

http://www.haagen-dazs.com/

http://www.benjerry.com/

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