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Companies That Almost Weren't: Ben & Jerry's

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Plan A involved delivering bagels with the New York Times.

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Next time you sit down in front of the TV to attack a pint of Ben & Jerry's Cherry Garcia, chew on this: If the stars hadn't aligned as they did in back in 1977, you'd be eating a bagel instead of ice
cream.

As Ben Cohen and Jerry Greenfield sat on the front porch of Greenfield's parents' home, the two childhood friends from Merrick, New York, batted around ideas on how to earn a living. They were both 26 and going nowhere fast.

After attending Colgate University, Cohen set out to pursue a career in ceramics. "Problem was," he explained in the 1997 memoir Ben & Jerry's Double Dip (Simon & Schuster, 1998), "I would take my ceramics to fairs and markets, set them up, sit with them all day and I'd bring every one of them home again."

Greenfield, an Oberlin grad (where he took a course called "Carnival Techniques" that included instruction on fire-eating), was equally directionless. The future king of the frozen dessert said, "It was a bad time for us both. I had been rejected by 40 medical schools. We were clearly not succeeding in our chosen fields. Since we love to eat, we immediately thought of food."

That food? Bagels.

Tired of working a string of menial jobs to augment his non-existent income in the pottery business -- McDonald's (MCD) cashier, security guard, cab driver, and crafts teacher at a school for emotionally disturbed adolescents in the Adirondacks -- Cohen was open to any and all possibilities.

Greenfield, having recently moved back north from the Carolinas -- where he was eking out a living as a lab technician -- was also ready to get on with his adult life.

After considering pizza, shish kebab, and fondue, the pair had what they thought to be a "Eureka!" moment -- UBS.

No, Ben and Jerry weren't about to apply for jobs as bankers at UBS (UBS). To them, UBS stood for something entirely different: The United Bagel Service.

It was, to be sure, a niche market that hadn't yet been filled. The plan was to deliver bagels, lox, cream cheese, and The New York Times to people's homes each morning.

However, Cohen and Greenfield quickly hit a snag. Even though bagels are, essentially, nothing more than flour and water, the equipment to make a genuine New York bagel -- even second-hand -- started at $40,000, which was far beyond what they could afford.

The solution?

Five bucks for a correspondence course at Penn State University on how to make ice cream -- Agriculture 5150. Passing the exam was a breeze, as it was open book. In short time, Ben Cohen and Jerry Greenfield transformed themselves into "Ben & Jerry", using a $12,000 loan to open a scoop shop on May 5, 1978, in a renovated gas station in Burlington, Vermont.

Of course, frigid Burlington wouldn't strike most people as an ideal location for an ice cream parlor. And it wasn't Ben or Jerry's first choice. All they knew is that they wanted to live in a college town, preferably a warm one. What they hadn't counted on was the fact that other entrepreneurs had already had the same idea. So, Burlington it was.

Two years later, Cohen and Greenfield rented space in an old spool and bobbin mill, where they began packing their ice cream into pints and the business began to blossom into a success, due in no small part to their unusual, innovative flavors and chunky mix-ins.

Interestingly, the distinctive texture that would become one of the company's signatures didn't come about in a brainstorming session. Ice cream lovers can thank Ben's anosmia for this -- having no sense of smell and an almost total lack of taste inspired him to add things like crunchy candy or cookie dough to the ice cream to make it more interesting.

In 1984, Ben & Jerry's went public, selling shares to residents of Vermont for $10.50 each. Later that year, the company found its backs against a corporate wall -- Pillsbury (SJM).

Pillsbury, which at the time owned Häagen-Dazs, was attempting to force distributors to sign a legal agreement preventing them from selling any other premium ice cream brand. Ben & Jerry's promptly filed a lawsuit, resulting in an out-of-court settlement and a raft of positive PR, what with David slaying Goliath.

From the humblest beginnings in that windy old garage, Ben Cohen and Jerry Greenfield went on to sell Ben & Jerry's to Unilever (UL) in August of 2000 for just over $325 million. (See also, Not Made in the USA: Ben & Jerry's)

It was the first brand-name ice cream to be taken aboard the Space Shuttle. And the majority of Royal Caribbean (RCL) cruise ships boast an on-board Ben & Jerry's shop.

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