1999 SEAR report

MANUFACTURING OPERATIONS

Approximately 37.98% of our ingredient and supply purchases in 1999 were from companies that we viewed as being especially aligned with Ben & Jerry’s values. This was a slight decrease from 38.6% in 1998. The St. Albans Cooperative Creamery is a farmer member-owned business. The Co-op has supplied all of Ben & Jerry’s milk and cream since 1985.

Greyston Bakery of Yonkers, New York, has been a supplier of brownies to Ben & Jerry’s since 1988. This ingredient is used in our Chocolate Fudge Brownie™ ice cream and frozen yogurt, two very popular flavors. The Greyston Bakery is owned by the Greyston Foundation, a nonprofit social service network that operates its bakery to train homeless and low-income people for self-sufficiency. In 1998 we began a three-year phase-out of the premium we have paid to Greyston, having mutually agreed that the bakery should orient itself to charging market prices for its products if it is to be economically viable over time. We continued in 1999 to provide technical assistance to Greyston in the redesign and renovation of its plant and in its efforts to diversify its product line and customer base. Greyston has decided to relocate its production facilities in order to increase the efficiency and flexibility of its operation. Ben & Jerry’s is providing technical support to this undertaking.

We continued to source our coffee extract from coffee beans produced by the Aztec Harvest Cooperative in a region of Oaxaca, Mexico. Cooperative members use organic agricultural methods. Along with Coffee Enterprises and Green Mountain Coffee Roasters of Vermont, we continued to support a program there to improve early detection of cervical cancer for women in the Oaxaca region. Ben & Jerry’s contribution in 1999 was $7,500, for a total of $15,000 since 1996.

In conjunction with our vanilla supplier, the Virginia Dare Company, we use a blended vanilla extract that contains vanilla beans from the Savegre River region of Costa Rica. Our supplier purchases about 10,000 pounds of vanilla beans-all that this organization is capable of producing. One result of this relationship is that over 3,000 acres of Costa Rican rainforest have been reforested or reclaimed for sustainable production. This trading relationship helps to reduce pressure to clear-cut additional forest in this area. These purchases have also supported community development projects, including a regional health center, acquisition of supplies for schools and infrastructure improvements.

Universal Flavors, our supplier of banana puree, purchases the puree from the Borja family business in Ecuador. According to Universal, Mr. Borja is transitioning to organic methods and leading efforts to educate Ecuadorian farmers about sustainable farming methods. Mr. Borja operates a childcare center at his banana processing facility. He offers medical insurance and transportation to his workers and he has established The Water Foundation to increase awareness of environmental issues.

There were no significant occurrences during 1999 in our manufacturing and distribution chains that caused concern over our product quality.

We have made significant improvements in the Company’s safety record, which are reflected in some of our safety statistics. The number of Lost Time Cases was reduced by 7% for the year and the number of Lost Time Days was reduced by 77% in 1999 over 1998, indicating that the severity of injuries has been greatly reduced. However, as already noted, our overall Injury Incident Rate remains higher than industry averages for the general food processing industry, particularly in the areas of Manufacturing and Trucking, Distribution & Warehousing.

Material handling of our unique ingredients and special manufacturing and distribution processes involved in making our super premium ice cream and frozen desserts are the major causes of injury. Our ongoing focus on material handling improvements, such as the totes program, is beginning to have a measurable impact.

During 1999, the Company continued to invest in safety-related capital improvements to eliminate injuries. At the Springfield plant, the construction of two chocolate silos reduced the need to manually handle 55-gallon chocolate barrels; a new bucket dumper decreased the frequency of lifting and pouring 45-pound ingredient containers. Other capital improvements were an automatic case taper, an automated sieve shaker and a powered drum hauler.

At the St. Albans plant we purchased a barrel mover that uses a power device to transport ingredients to the production floor, bucket dumpers to reduce manual lifting and pouring, and a bundler wrap carriage to provide a safer means for employees to change bundler wrap.

At the Waterbury plant we installed a mechanically-assisted drum hauler and a drum crusher to reduce the potential for upper extremity injuries. A bulk transfer and tote system was installed, allowing ingredients to be pumped out instead of manually lifted and poured, helping to reduce the amount of physical material handling. Also, a pint cutter was purchased for the quality lab to reduce the amount of manual labor and the potential for upper extremity injuries.

The three manufacturing sites store more than 10,000 lbs. of anhydrous ammonia for refrigeration purposes. Each of the manufacturing sites and the Distribution Center comply with OSHA’s Process Safety Management (PSM) program. The goal of PSM is to ensure that manufacturing facilities have the correct management systems in place to prevent the release of hazardous chemicals.

We implemented an on-site medical management program at the Waterbury plant, modeled after the program at the Springfield plant, to provide immediate medical care in the case of injuries. This program will be extended to the St. Albans facility in 2000.

The Waterbury plant experienced an unforeseen anhydrous ammonia leak on October 2, 1999, caused by a coil leak in the freezer. The Company’s hazardous materials (HazMat) group responded very promptly and appropriately to contain the leak. To ensure that no injuries would occur resulting from the release, the Company cancelled plant tours and closed the manufacturing facility for a few days, until it could be determined that no risk remained to operations or to the staff.

No safety-related regulatory actions were brought against the Company in 1999.