Ben & Jerry's Chief Executive Resigns
After Disagreements With Founders
---- By Joseph Pereira
Staff Reporter of The Wall Street Journal
Robert Holland resigned as chief executive of Ben & Jerry's Homemade Inc., citing the need for a more experienced consumer-products marketer to boost growth.
Mr. Holland's exit, coming after a relatively brief tenure, followed disagreements with the powerful founders of the iconoclastic ice-cream company and underscored the difficulty the company has had meshing its broad social agenda with shareholder interests. Some executive recruiters said that finding a CEO who can succeed at Ben & Jerry's could be a daunting task.
Mr. Holland, a former McKinsey & Co. consultant who took over in February 1995, is credited with solving production problems, building a core group of senior managers and restoring profitability.
But Ben & Jerry's is losing supermarket share to bigger rivals as dairy costs are rising, and its stock is stagnant. The company recently said third-quarter earnings will be below the 35 cents a share of a year ago. Analysts expect sales of about $175 million this year, up from last year's $155 million.
In a statement, Mr. Holland said an "accelerated succession" was needed because of "marketplace challenges" and "the predictably tough demands associated with succeeding founders." The company was founded by Chairman Ben Cohen and Vice Chairman Jerry Greenfield, who control about 42% of the stock.
"Instead of just building a brand, it's now more a Coke and Pepsi game, battling it out for shelf space -- you know, a share point here and a share point there," Mr. Cohen said. "That's the new skill we need to bring in."
Ben & Jerry's insiders say Mr. Holland faced resistance in trying to move the company into France last year because Messrs. Cohen and Greenfield were uncomfortable with the country's nuclear-testing policies. Mr. Holland acknowledges some differences over France but notes that he prevailed.
In another case, company insiders say, Mr. Cohen raised questions about Mr. Holland's push into sorbet products because it took emphasis away from what he regarded as a fundamental mission: helping hard-pressed Vermont dairy farmers. Again, Mr. Holland prevailed, and sales of sorbets are growing.
"I think I have very good marketing instincts," Mr. Holland said in an interview. But because he lacks experience in consumer goods, he added, "I think those instincts could get the company into deeper waters."
A recent internal study showed that while 60% of consumers rank Ben & Jerry's as the No. 1 or No. 2 super-premium ice cream on the market, the company is having difficulty getting anyone outside its core customer group to try it. Mr. Holland says that finding helped convince him "to talk about succession." He got little argument from the board. "There was mutual agreement," says Henry Morgan, a director.
Mr. Holland, who is 55 years old, isn't the only one in the industry to resign recently. Earlier this month, David V. Clark resigned as chief executive of Eskimo Pie Corp. after its earnings took a dive. The industry is heating up as deep-pocketed giants, including Unilever NV, Grand Metropolitan PLC, and Nestle SA, are acquiring smaller rivals and jockeying for share.
"With Unilever and Nestle getting more aggressive about the ice-cream business, a company like Ben & Jerry's could really use a very strong marketing and sales guy to be competitive," says Laurie Feldman, food analyst for Bear, Stearns & Co.
Ben & Jerry's named Bruce Bowman, senior director for operations, as chief operating officer, pending the outcome of a search for a new CEO. The company said it wouldn't use an executive recruiter, as it did in the search for Mr. Holland, nor solicit essays from candidates, as it did last time in a publicity stunt.
Several leading contenders for the job include runners-up from the old list of candidates referred by a blue-chip recruitment firm, Russell Reynolds Associates, insiders say.
Recruiters said finding a good replacement won't be easy because of the strong presence of the founders. E. Pendleton James, chairman of a New York search boutique, said Mr. Holland "was doomed before he took the vow -- because of Ben and Jerry. . . . I wouldn't go after this search if they were knocking on my front door."
Joann S. Lublin contributed to this article.