Dreyer’s Grand Ice Cream Business Time Line: DATE Event Description 4th Origins of ice cream being made… China, Persians faloodeh, Nero in Rome (62 AD) century BC 15th Spanish, Italian royalty and wealthy store mountain ice in pits for summer use Century 16th Ice Cream breakthrough is when Italians learn to make ice by immersing a bucket of Century water in snow and adding potassium nitrate… later just use common salt. 1700s Jefferson and Washington In US serving ice cream 1776 First US ice cream parlor in New York City and American colonists first to use the term ice cream 1832 Augustus Jackson (Black) in Philadelphia adds salt to lower temp. White House chef to a catering business. 1846 Nancy Johnson patented hand-crank freezer 1848 William Young patents an ice cream freezer 1851 Jacob Fussell in Seven Valleys, Pennsylvania established the first large-scale commercial ice cream plant… moved to Baltimore 1870s Development of Industrial Refrigeration by German engineer Carl von Linde 1904 Walk away edible cone at the St Louis World’s Fair 1906 William Dreyer made his first frozen dessert to celebrate his German ship's arrival in America. Made Ice Cream in New York then moves to Northern California began 20 year apprenticeship with ice cream makers like National Ice Cream Company and Peerless Ice Cream. 1921 Dreyer opens own ice creamery in Visalia and one first prize at Pacific Slope Dairy Show. 1920s – Dreyer taught ice cream courses at the University of California and served as an officer in 1930s the California Dairy Industries Association. 1926 First commercially successful continuous process freezer for ice cream by Clarence Vogt 1928 Dreyer partnered with candy-maker Joseph Edy, and together they founded a small ice cream factory on Grand Avenue in Oakland, California. 1929 Dreyer added walnuts (later replaced with almonds) to his chocolate ice cream and, using his wife's sewing shears, cut marshmallows into bite-sized pieces to make the first batch of Rocky Road, a name that gave people something to smile about in the face of the Great Depression. 1946 Dreyer only son enters the business 1947 Edy and Dreyer agreed to dissolve their partnership. In 1953, Dreyer retired and his son, affectionately known as Junior, took over management of the company. Edy returned to the candy-making business. 1961 (NYTimes) Unilever (British/Dutch) makes Good Humor ice cream products in the US 1963 Dreyer's son sold the company to his key officers – Al Wolff, Bob Boone and Ken Cook. 1977 Visits Dreyer’s owner Ken Cook to ask about franchise and end up buying the business., wrote business plan, $500,000 bank loan, $500,000 from Charterhouse Group New York Investors. Cronk and Rogers put in $14,000 each for 50% ownership. Cronk borrows from Mother-in-law. 1977 Dreyer’s small export business to Hong Kong and 1980s was the best selling packaged ice-cream in Hong Kong. With the Cronks gets stiffed for the banquet Bill when visiting China. 1978 Learning the business… decides to cut line to 15 flavors and drop Bavarian Cheesecake. Despite consumer complaints had to make hard decisions. 1979 Sued by Kraft Foods who owned Breyer’s Ice Cream (1866 Philadelphia) and said Dreyer name confusing to consumers. Dreyer’s only in CA and had only 1% of market. Solution Dreyer’s to be used in 13 Western States… later use Edy’s in rest of nation when expand 1980 1980 Take the company Public after 4 years of growing the company from $6 million in sales to over $30 million in sales in CA, Arizona, and Washington. Start discussions to by out Charterhouse Group’s share they want their buyout value to be use IPO (Initial Public Offering) value. Goes to Hambrecht & Quest to see if underwrite and they estimated a return of multiple of 30 or a $45 million value for the business and $15 million to buy out the Charterhouse Group. 1981 1981 Securities Exchange Commission (SEC) holds up the sale for fears of the dilutive effect (to much new stock). Finally approved as DRYR. Charthouse Group ended selling its share for over $40 million ($500,000 original investment) 1981 Begin mission to become the biggest purveyor of Ice Cream in America. Dreyer's is marketed under the Edy's brand name in all states east of the Rockies. 1982? DSD Model (Direct Store Delivery) becomes key to growing the business 1983 Begin expansion across the Rockies with Edy’s brand to St Louis. Built $2 million warehouse, purchased truck routes ($90,000 each) took 5 years to reach break-even point. Late Late 1980s start into the New York City market with DSD with much resistance. Tough 1980s market because high competitive (over 20 local regional companies, warehouse market, extensive slotting fees (Shelf space), Unions (Dreyer’s non-union only Union in SF), few food companies were making money in NY, case of a NY copycat competitor. Hire leaders in DSD from Coke and Frito Lay with experience in the New York market. 1980s Building Dreyer’s Work Culture…Ten Groves for a management philosophy… Based upon Bob Waterman and Tom Peters’ In Search of Excellence 1980s Year after entering NY market faced a price-fixing scam by two major competitors who alternated ice cream discounts to not allow Dreyer’s to have a “promotional window.” Approaches CEO of competitor and settles out of court for $5 million. 1980s Slowly break into the Washington DC Giant Chain… sold by scan-based capability. 1980s Purchase copy-cat competitor for $25 million 1985 Mid 1980s entered long-term distribution agreement with Sara Lee for its Popsicle brand frozen snack products, through the DSD. Sara Lee violated contract and dropped out and Dreyer’s sued for $13.5 million. Ends in baseball like arbitration and Dreyer’s gets $10 million. 1985 Become distributor for Ben & Jerry’s 1987 1987 Dreyer’s striving for quality nutritious product and introduce “light Ice Cream.” FDA would not allow it to be called light because ice cream by regulation had to be 10% butterfat. All at time that the Gov’t Food Pyramid recommended reduction in daily fat intake. Solve by calling it Dreyer’s or Edy’s Grand Light with no reference to being Ice Cream. Later the FDA did allow it to be called Dreyer’s Light Ice Cream. 1987 (NYTimes) Dreyer’s did not fair well as popular Qwest Coast ice cream and B and J distributor. Stock at $19 per share down from $32.25 last year. Management attributes poor showing to higher sugar and milk prices and losses associated with the acquisition of distribution operations. 1988 Advertising--- 1977 spent $300,000, in early 1900s spending over $30 million, and in 2005 spent $130 million on advertising. Hard to evaluate just how much it pays off. Unbelievable Spokesperson campaign from Hal Riney Advertising Agency for the Grand Light campaign. 1988 (NYTimes) Carnation at number 3 with 20 million gallons annually (4 million less than Dreyer’s) says new Bakersfield plant will let them pass Dreyer’s 1989 Simon Murray ‘taipan” to Chinese businessman Mr. Li offers to purchase Dreyer’s 1989 (NYTimes) B & J agrees to have some of its ice cream made at Dreyer’s Indiana Plant because they were at capacity and this was the only way to grow. 1989 Unilever acquires Gold Bond Ice Cream Inc, Green bay, Wisconsin and Isaly Klondike Company, 1990 (NYTimes) Dreyer’s introduces new cholesterol-free frozen dessert called American Dream. Less than 1 % fat and 80 calories per three once serving> Premium ice cream has 16% fat, 30 milligrams of cholesterol, 120 calories in a three once serving. 1990 (NYTimes) Dreyer’s places entire advertising campaign with Goldberg Moser O’Neil Advertising of San Francisco with a budget of $ 8 to10 million 1990s DSD allows for 1990s Scan-based Trading (product consigned to retailer and direct sale to consumer). Whereby demand-based restock ordering, electronic payments, 24 hour service... 1991 59,108 square-foot office expansion. 1991 (NYTimes) B & J under performs after putting charity, environmental principles ahead of stockholders. Dreyer’s having a good year with its apolitical business. Dreyer’s produces 1/3 of B&Js ice cream at Indiana plant. Rogue B&J needs to expand bringing them closer to Dreyer’s after 1989 three year deal (10% year one, 32% year two, and 41% year three. Gives B&J time to build and expand. 1992 (NYTimes) Fierce competition for freezer space has equaled ice cream producers introducing over 200 new products. Chasing consumer flight’s of fancy… Haagen-Daz (nation’s leading super-premium), Carvel (Farmington CT), B&J Wavy Gravy, … Dreyer’s, Friendly, Mrs. Fields, Pierre”s French jump on bandwagon as supermarket sales rose 1 % at $2.16 billion. Public moving to more premium and health products. 1992 (NYTimes) Dreyer’s acquires T&W premium ice cream brand and the supermarket direct- store distribution system of Calip Dairies of Lindenhurst, Long Island for $21 million 1992 Dreyer's goes global. Overseas sales have more than tripled since 1992. Dreyer’s Grand Ice Cream products are currently exported outside the continental United States through the assistance of independent distributors. Marketed as Dreyer's in: Marketed as Edy's in: Ebeye Palau Aruba Dominican Republic Guam Philippines Bahamas Jamaica Hong Kong Saipan Barbados Russia Korea Singapore Bermuda St. Lucia Majuro Taiwan Cayman Islands St. Maarten Malaysia Curacao Trinidad & Tobago Chile 1992- Nestle proposes friendly merger with B&J. 1993 1993 “White Squire” (Investor minority ownership deal) deal with GE Capital for 18% of Dreyer’s for $100 million to protect from takeover.