Ben & Jerry’s Shops in France Get Cool Reception, but Firm Sees Pickup

By Genevieve Oger

Staff Reporter of The Wall Street Journal

The Wall Street Journal
(Copyright (c) 1998, Dow Jones & Company, Inc.)

PARIS — It is Friday night in the busy Les Halles district and young people are filling cafe terraces to enjoy the summer air, but a newly opened ice-cream shop operated by Ben & Jerry’s Homemade Inc. stands nearly empty. However, the U.S. concern is confident that it can fill its French outlets with customers. With successful launches in Japan and Britain behind it, Ben & Jerry’s opened three shops in Paris in June to complement the supermarket distribution it inaugurated in 1996.

Philippe Dailly, the company’s managing director for France, is unruffled by the slow start. “The concept is about fun, it’s about partying . . . the boutiques will probably become neighborhood hangouts in time,” he said in an interview. “We hope to have 30 to 35 shops in France by 2001.”

Ben & Jerry’s, of South Burlington, Vt., targets annual French sales of 150 million francs ($25.1 million) by then, up from 18 million francs last year, Mr. Dailly said. The company aims to carve out a 45% share of the market for super-premium ice cream — the creamiest type, with air content of just 20% — slightly above the share it controls at home. But the company may find France a tough nut to crack, analysts say. Its main competitor, Haagen-Dazs, boasts a solid head start and the ample resources of its parent, U.K. food and drinks company Diageo PLC. In addition, the Ben & Jerry’s concept is grounded solidly in American culture, a factor that could hinder the company’s efforts to win over the French public.

Market-watchers also say the company’s targets seem ambitious, considering the size of the lead enjoyed by Haagen-Dazs, something that will make breaking into the French market an expensive proposition for Ben & Jerry’s. Haagen-Dazs, the only other major player in the French super-premium ice-cream market, has controlled roughly 90% of the segment since its local launch in 1990. “Ben & Jerry’s will have to invest significantly in advertising and marketing” to succeed in France, said Jim Barrett, an analyst at brokerage firm Josephthal Lyon & Ross.

Mr. Dailly declined to reveal the size of the French promotional budget for Ben & Jerry’s, but called it “very substantial.” Some industry-watchers wonder whether Ben & Jerry’s can seduce fickle French consumers with its concept. The company’s hippie founders, Ben Cohen and Jerry Greenfield, are among the best-recognized U.S. business figures. They are known mainly for their offbeat ice-cream flavors, but also for their charitable activities, emphasis on the social responsibility of business and a counterculture image.

However, Ben & Jerry’s plays heavily on American cultural references, some of which may be lost on the French. Flavors such as Cherry Garcia and Chocolate Chip Cookie Dough have developed cult followings in the U.S., but the names may leave French consumers more confused than amused. Analysts also say they are unsure how the company’s distinctive corporate image will play in France. “It all comes down to brand awareness,” Mr. Barrett said, adding that Haagen-Dazs’s more culturally neutral positioning may give it an edge. “Can the brand imagery — good hippie guys, high-quality product — play to the French public? It may or may not be transferable.”

But despite the difficulty of breaking into a market as mature as France, industry-watchers say Ben & Jerry’s is right to look overseas. “Considering that the company has a lot of excess production capacity and the fact that the U.S. ice-cream market is growing very slowly, expanding internationally makes a lost of sense,” said Kim Galle, an analyst at brokerage firm Adams, Harkness & Hill.

He added that Ben & Jerry’s won’t be competing head-to-head with Haagen-Dazs because of the U.S. company’s distinct marketing. “The brand positioning is actually quite different from Haagen Dazs,’ Mr. Galle said, noting that Ben & Jerry’s has a fun-loving image, whereas Haagen-Dazs’ is more formal.”

Analysts also commend the company’s decision to continue producing ice cream at sites in Vermont and shipping it to France. While it means heavy transportation costs, that would prove to be a prudent stance if Ben & Jerry’s were to encounter difficulties in France.