2. 2005 Highlights

The Short & Sweet Version

We hope you’ll take some time to sit down with a bowl of ice cream and savor this report all the way through. But for those of you who like to dig out the gobs of cookie dough first, here’s the abridged story of our social and environmental performance in 2005 to match your style. Don’t forget to come back later to finish the bargain. Here’s how we did…

…within our Company

  • In 2005, most of our Finance and Information Systems operations were transferred to North American Ice Cream (NAIC), a division of Unilever based in Green Bay, Wisconsin. This reorganization promises to make us more efficient in these areas and more strategically aligned with the activities of our parent company. This change will not affect our ability to deliver on Ben & Jerry’s three-part mission statement.

…in our Supply Chain

  • Our Values-Led Sourcing program stayed on track in 2005, with 54.7% of our raw material spend (i.e., ingredients, dairy, packaging) going to initiatives that we see as aligned with our values. While this percentage is in line with recent years, we lost one Values-Led supplier and did not develop any new Values-Led relationships in 2005. We continue to challenge ourselves to do more in this area.

…in our Scoop Shops

  • In the world of Ben & Jerry’s Scoop Shops, we saw strong growth, measured by the number of shops opened (96) and the amount of ice cream we sold (29% increase over 2004). But with the growing came the pains. Supply chain difficulties led to bulk shortages and, in some cases, compromised product quality. Implementation of our new computerized cash register system (MICROS) was flawed and costly. And we fell short of our goal to reduce costs and simplify the design-and-build process for our Scoop Shops. In several key areas, we couldn’t keep up with our growth rate, same store sales remained flat and franchisees felt shortchanged. In the Fall of 2005, Retail Operations announced a comprehensive plan to address these challenges. Over the following months we took steps to reimburse franchisees for ice cream shortages, renegotiate our contract with MICROS, hire a design-and-build manager in our Retail Operations group, and improve our channels of communication with the franchise community.
  • Five new Ben & Jerry’s PartnerShops opened in 2005, while four others closed. A PartnerShop is a Scoop Shop owned and operated by a community-based nonprofit organization that offers job training and paid work experience to youth who may face barriers to employment. We’re committed to increasing our support for this unique franchise model and our nonprofit partners, though it has never been an easy road.
  • We unveiled a fully-fledged Cones to Careers in 2005, a program that provides youth who face barriers to employment with job skills and hands-on work experience through internships in our company-operated stores.
  • In its 27th year of Scoop Shop tradition, Ben & Jerry’s Free Cone Day treated record numbers of ice cream lovers worldwide to free ice cream, extending thanks to our neighbors and welcoming nonprofit organizations to talk about their passion. In all, the global event served up some 1.2 million free scoops to customers and raised over $123,000 for local activism and charities in communities where Ben & Jerry’s franchisees are doing well by doing good.
  • Coast to coast, through community initiatives, product donations, merchandise, paid employee time and a diversity of contributions, Ben & Jerry’s Scoop Shop teams rolled up their sleeves and dedicated energy and ice cream to their communities. Through promotions and campaigns from blood drives to relief efforts, they contributed $636,669 in support of local community projects.

…for the Environment

  • We reached and exceeded every one of the environmental performance goals at our Vermont manufacturing plants, from waste reduction to greenhouse gas emissions. Our own management initiatives and efficiencies gained from significant production increases drove these remarkable results.
  • We are on track to meet our Company’s 2007 goal to reduce our normalized CO2 emissions (emissions per gallon of product) by 10% over the five year period from 2002 to 2007. By 2005, we had achieved a 26% reduction in normalized CO2 emissions in just three years. On an absolute basis, we generated 15% more CO2 emissions in 2005 over our 2002 levels, but we offset the environmental impact of 100% of these emissions through the purchase of “green tags” from Native Energy.
  • The Dairy Stewardship Alliance, a Ben & Jerry’s collaborative initiative to develop a sustainability self-assessment tool kit for dairy farmers, marked Year One of successful implementation. Our thanks to the St. Albans Cooperative Creamery of Vermont and the University of Vermont for their support in a commitment we believe can help improve the environmental and social impacts of dairy farming.
  • In Europe, with dedicated and likeminded experts, we put the final touches on the first phase of our Caring Dairy initiative, completing the development of user-friendly guidelines, metrics and tools for sustainable dairy farming in the Netherlands. As in the U.S., we hope Caring Dairy will lead to continuous improvements in the environmental, social and economic aspects of dairy production.

…in the Workplace

  • We saw the elimination of 22 jobs at Ben & Jerry’s due to restructuring in 2005. Voluntary employee turnover also increased by two percentage points, although it remains below the industry average. However, the departure of friends and co-workers, new reporting relationships, and shifting job responsibilities have led to a sense of loss for many in the Company.
  • We responded to the effects of restructuring with a variety of new initiatives and benefits designed to support employees and strengthen our employee community. We added a community service benefit that allows our Central office employees to volunteer with a nonprofit for 40 hours of paid time each year. We extended Unilever’s pension plan to Ben & Jerry’s employees, the first pension plan in our Company’s history. We created a $2,000 “Golden Cone Award” within our employee recognition program to applaud exceptional efforts at building our business while preserving and promoting our culture, Social Mission and values. (Two employees were honored with the Golden Cone in 2005.) Senior managers in the Company participated in a series of intensive leadership development sessions. And back at the drawing board, we committed to an office redesign that will rethink, reuse, recycle and reflect not only respect for the environment, but the love of fun, goodwill and wellbeing that are the essence of our brand.

…in the Community

  • At Company headquarters, we dedicated resources to causes, practices and commitments that we believe promote positive social and environmental change. Tying together our contributions through the Ben & Jerry’s Foundation, ice cream donations, flavor royalties shared with nonprofit organizations, community service events, and issues-based marketing campaigns, in 2005 we devoted upwards of $2.9 million in resources to issues and actions we believe in. Learn more about the ways we give back to the community here.
  • The Ben & Jerry’s Foundation celebrated its 20th anniversary with a banner year of grant-making to dedicated, progressive organizations working to address the root causes of social and environmental problems in our nation. Our company allocated $1,445,844 to the Foundation in 2005, a 9% increase, and the Foundation awarded grants totaling $1,517,400 over the course of the year.
  • In response to Hurricane Katrina, we sent a team of eight employees to the Gulf Coast for a week to help with the deconstruction and clean-up of storm-damaged homes. Ben & Jerry’s paid for the crew’s time and travel. Learn more about the ways we give back to the community here.

…in the Public Eye

  • Ben & Jerry’s passion for activism re-ignited in 2005. On Earth Day, we constructed a 900-pound Baked Alaska from Fossil Fuel ice cream, shouldered it onto the U.S. Capitol lawn and served it up with the help of Greenpeace and the Alaska Wilderness League to say “no” to drilling for oil in the Arctic National Wildlife Refuge.
  • The Lick Global Warming campaign in the U.S. urged awareness and motivated action around global warming. By 2005 the number of postcards to Congress inspired by the campaign was well over 70,000. Our thanks to the Dave Matthews Band for spreading the message and their magical music on our 23-city global warming tour.
  • The Family Farms Campaign dedicated Ben & Jerry’s website and our first issues-based TV campaign to the support of endangered small and mid-sized family farms in America. We partnered with the National Farmers Union in their first-ever consumer campaign to save the MILC program, America’s basic safety net for dairy farmers. A two year extension of the program was passed by Congress.

…around the World

  • As our international business grows globally, so does our Social Mission. In a few countries such as South Korea, we’ve struggled to get our business established and Social Mission hasn’t gotten far off the starting line. But in our European manufacturing operations in the Netherlands and in most global markets, we’re finding great nonprofit partners and making substantive progress on our Social Mission. Our “Caring Dairy” initiative is a case in point.
  • In Europe, we partnered with polar explorer Marc Cornelissen and the World Wide Fund for Nature (WWF) to kick off “Ben & Jerry’s Climate Change College.” This is a three-year program that aims to raise awareness of climate change and motivate public action in Europe to reduce greenhouse gas emissions.