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From Wikipedia, the free encyclopedia

Dreyer's Grand Ice Cream Holdings, Inc.
Subsidiary
IndustryFoods
Founded1928
HeadquartersOakland, California, United States
Key people
Mike Mitchell, CEO
RevenueIncrease$1.588 billion USD (2004)
Number of employees
~10000 (2008)
ParentNestlé
Websitewww.dreyers.com
Dreyer's headquarters in Oakland
Dreyer's headquarters in Oakland

Dreyer's Grand Ice Cream Holdings, Inc., a subsidiary of Nestlé, is a United States-based producer of ice cream and frozen yogurt founded in 1928 as Edy's Grand Ice Cream in Oakland, California by Joseph Edy and William Dreyer. In 1947 the partnership was dissolved,[1] and in 1953 William Dreyer Jr. took over and changed the name to Dreyer's Grand Ice Cream. In 1963, Dreyer Jr. sold the company to his key officers—Al Wolff who ran the factory, Bob Boone who ran distribution, and Ken Cook, who managed sales and served as president from 1963 to 1977. Cook's vision was to provide American families with a truly premium ice cream they could enjoy at home[citation needed]. In 1977, with sales of $6 million and an employee base of 75 people, Cook sold the company to T. Gary Rogers and W.F. "Rick" Cronk for $1 million. In 1981 the company expanded and re-adopted the name Edy's Grand Ice Cream when marketing its product east of the Rocky Mountains, so as to not be confused with another company named Breyers (today owned by Unilever).[2][3] Hence they market under the Dreyer's name in the Western United States and Texas, and under the Edy's name in the Eastern and Midwestern United States.[4]

In 2002, Nestle acquired Dreyer's for $3.2 billion.

YouTube Encyclopedic

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  • ✪ The Dreyer's Ice Cream Success Story! A Case Study for Entrepreneurs
  • ✪ The Mother of All Parties: Excerpts from Dreyer's Oral History Project
  • ✪ DO THE SCIENCE (Sweeter Side) - Nestle-Dreyer's Part One
  • ✪ Grammar Girl #664: Benjamin Dreyer and His Unusual Pet Peeves
  • ✪ DO THE SCIENCE (Sweeter Side) - Nestle-Dreyer's Part Two

Transcription

Hello everybody, Tom Ellsworth, and we're here on case studies. This is where you can learn things that happened to other companies and apply those things to you and your company today. The company we're going to look at, Dreyer's ice cream. And there's two takeaways today. The first is, you can make a plan and do everything that you said you were going to do, or that you wanted to do, but the outcome can be different. And it's how to react to that. And the second thing is, it's kind of along the same lines, setting yourself a charter or a set of foundational principles for your company, whether it's two people, or 200 people, is the thing that will get you through the tough times of life. Those two points may not feel like they're related, but I'm going to show you how they are, as we look at Dreyer's ice cream. First, Dreyer's. Who doesn't like ice cream? I love ice cream. What you may not know is Dreyer's was founded clear back in 1906. William Dreyer was a galley boy on a ship, which is kind of a cook's helper. And he basically invented ice cream on a cruise ship. And he served the dessert to the captain and people that were there, and they said, "This is really good. You should do more with this." And he basically decided, you know, I'm going to do it. He decided that he was going to make that is American dream. So he founded a company in Oakland, California. It took him about 15 years between that experience on the ship to opening up in Oakland, California, but he did it. And he called it Dreyer's Grand Ice Cream, because he called it a grand dessert and it also happened to be he was on Grand Avenue in Oakland. So as unimaginative as that may seem, that is the origination of Dreyer's Grand Ice Cream. So here he is, 15 years later, making ice cream. He was kind of a, you might call it a hobby business, but he took it seriously. But it didn't take off, it didn't go necessarily nationwide. He ultimately turned it over to his son and some other key people at the company and they did that in 1963 as William retired. The next step was they just kind of kept the company going, rolling along until 1977. So it was about 14 years. And then in 1977, they sold it to two guys. Gary Rogers and William Cronk. They paid $1 million for that $6 million business that had been around forever. But they saw something about it. The said, "Look, this is really good ice cream. This is premium stuff. We could go big with this." So it was Gary Rogers and William Cronk that said, "We're going to go big." Over the course of the next few years, they thought it was really important to establish a charter of principles and culture for the company. So one of the first things that they did between 1977 and 1981, when they were establishing and getting it off to a good start, they built this thing called Grooves. And they called it that because it's kind of a nickname for staying in the groove. And it was a set of principles that would guide the company and guide the employees, because they wanted every employee to know, hey, this is our charter, this is how we'll treat you, this is what we want to be, this is the atmosphere we want to have, and this is what we expect from you. And it was kind of like a 10-commandments of how the company would operate. But it wasn't just a bunch of how to's, do this, be on time . . . It was actually more fun because they truly wanted to get a culture out of it. This would turn out to be a good start that was critically important to them. So check some of these things out. I wish I was part of companies early, early in my career for maybe the founders would have done these things for me. #1: Management is people, so inspire and coach people, don't just command them. Wow, that's really sharp. I like that. Hire smart. No mediocrity allowed. We can't allow mediocre people to come in and influence our current people and our current people need to know we'll only hire good people to work with them. That's a great philosophy. I appreciate that. We will have respect for the individual. #3: We will liberate you from oversight and micromanaging and we will motivate you to be trusted to get your job done. #4: People involvement. It's all about people. It's not about numbers. Numbers will take care of themselves if we involve our people and they truly understand the job they're doing and how it impacts the rest of the company. Ownership. Own your own job, own your own function. Here's my favorite, #6. Hoopla! Let's celebrate a little bit, when we get something done and introduce a new flavor or we just meet our monthly goals. Let's make sure that we take time to celebrate. #7: Train, train, train. Equip people when we hire them, equip people when we promote them, equip people when we get them to the next level. #8: This would prove to be key later for the company. Important communication should be face-to-face communication, whether you're giving feedback or telling them about important messages of the company, do it face-to-face so they can see you. #9: Let's remember it's an upside down organization. We're not a triangle going to the top, where we celebrate our leadership. Everybody at the bottom of the triangle, selling the ice-cream, delivering the trucks, they're out there on the front lines, face-to-face with customers, face-to-face with the stores, and they know better than we do at the top what's happening. We're a upside down company, and we want that feedback to come in, good news and bad, very quickly so that we know what's going on. And we will value all those people. And then #10. Ready, fire, aim. It's not to be negligent or to be a little crazy, but it really was to be spontaneous and say, we expect you to make a decision and not just sit around aiming, aiming, aiming, aiming. You're expected to do something. Be careful, use your training, get permission, but sitting around aiming forever and never firing at something or never executing, that doesn't get the company anywhere. So over the next 17 years, there's a 17-year gap here, not really a gap, or a continuum, where they grew the company for 17 years. And then in 1998, they were in the middle of a four-year plan to go big. And they called this, "The grand expansion." And what this grand expansion plan was all about is they said, it's time to really go big. And they had grown themselves up to about $600 million in sales by this time. And they said, "We need to do more consumer marketing. Let's expand our distribution." Some little interesting super premium delicacy ice cream had been popping up like Ben and Jerry's and Haagen Dazs. And they said, "We've got all these refrigerated trucks. We've got space on them. Why don't we charge these super elegant ice-cream people, the super premium people, why don't we charge them to use our trucks so we can deliver for them. We've got space on the truck and we're going to the store. And that super deluxe ice cream in the high category doesn't compete with our great Dreyer's ice cream here. So we're not really competing with each other; they're two different types of ice cream. So let's make some money on them. Smart. Also, they ultimately signed Ben and Jerry's for a broad nation-wide agreement to do that. And then they said, Let's also accelerate some new products. We can see some things like sorbet and ice-cream bars that are more and more coming to the forefront. So let's make sure that we follow the market with some great new stuff. They also found a little coffee company named Starbucks, and they started introducing some Starbucks flavored ice cream. The last thing they did is, you take a look at this [1998], this is the dawn of the Internet. And it's the dawn of information systems and they said, we really need to invest in information systems so that we know our sales every day, every place. So they put all this into place, and they were executing and doing really well with their execution when, guess what? A perfect storm happened in the market. So they had made this grand four-year plan, from '94 - '98, and then in 1998, a ton of things happened to them that they didn't cause, but they had to react to. First, dairy products and butter fat, which is the core ingredient of ice cream, the prices shot way up. So they were having to pay these higher prices from the farms for the butter fat. Also, a competitor Breyer's, which was owned by a giant conglomerate started aggressive price promotions and coupons and fighting for the grocery store space. They had never seen that kind of fight before. So Breyer's fighting with Dreyer's. Then, they started some years before with some low-fat products and some sherbet products that had less sugar in them. And for some reason in 1998, the American consumer lost interest in healthy ice cream. Now as we look some 20 years, 30 years later, it is kind of shocking, I think. You know, to think that at one point in time you have the healthy ice creams that people were passing on because they wanted the real good stuff. Well, nonetheless, that's what was happening then. And so that also hurt what they had done, perfect launches of some new products. And then a big hit. Ben and Jerry's called them and said, "You know what? We don't need you distributing us anymore. We're going to figure some things out for ourselves, and we don't need you." Now that was huge, because that was a big, important partnership and it came out of the blue. They were delivering on time, they were doing everything right. But Ben and Jerry's just said, "You know what? We're going to do some other things, we'll do it ourselves." And lastly, one of the founders came down with a brain tumor. He would survive, but he was out of action for months as he got treatment, and was in the hospital and then recovering from home. None of these had anything to do with the plan that they had put together and done so well. So the moral of the story there is you can execute a plan perfectly and there can be a perfect storm that follows you or unintended consequences and you need to be ready for it. Dreyer's could have done one of two things. They could have gone, "Oh man, we did the plan. We did it perfect. We had everything going and here," but instead, they said, "You know, the same brains that helped us make this plan the first time, guess what? We're going to make a plan b, and we're going to get out of this. So basically, they had a whole different attitude about it. They said, "Let's go to Lake Tahoe, with our key people." And they brought them up to the summit in Lake Tahoe and the first thing they did, they said let's look at the facts, and let the facts talk to us, and don't deny the facts. And don't try to explain them away. It's not anybody's fault in the room, but let's look at all these facts and react to them, by not trying to convince ourselves that something other than the truth is going on. So they didn't go into denial. And they didn't try to convince themselves what they're seeing is not what the truth was. They realized they needed to do two things. They had spent money on the healthy products and those change, so they were going to have to reorganize that. They had all these trucks and this distribution system and all of a sudden Ben and Jerry's didn't need them anymore. They were going to have to consolidate that and do a little financial reorganization of that. They put together a multi-point plan. And they said, this is what we have to do. And one of the things they said, we need to go back to grooves. Because grooves was that charter of things that keep everyone in the groove, that this is how we'll act. This is how we expect people to act. And one of them was, face-to-face communications. And they had grown huge between the time they made that, and 17 years later, but they were still following it. In the week after the meeting in Lake Tahoe, they did what they needed to do with the investors and the stock market. They told them what happened and they gave them the details. In the seven days from completing those meetings, forward, in those seven days, they dispatched all the company senior executives and they spoke to every person in the company on a face-to-face basis. And they said, "Hey, the tenants of grooves is we communicate good news and bad news face-to-face, because we care about you. And we're going to tell you what the plan is." And in those seven days, every person in the company was in a room somewhere, face-to-face with an executive where they could ask questions and get straight answers live. Well, one of the things they had to explain was there would be some layoffs. There would be some changes because these were big hits we took, even though we did everything we thought we should of the plan. But we're going to revise the plan and we're going to come back even stronger. So what they concluded was that they had the support of their employees. They said, you know, everybody really trusted us. They believe it. Well it's because when they set that charter grooves, they stuck to it. And 17 years later, it wasn't just some sign on the wall from the original founding of the company; it was how they lived and operated and the employees trusted that what was on the wall would be how they were treated, and the owners trusted that that's how the employees would operate as well. There is a happy ending that happens here. Two years later they had pushed sales up to $1.1 billion, as they followed their restructuring plan and they introduced more heavy cream, elegant, high-end ice-cream products because that's what people wanted to eat. They brought that out, and they drove it to here [$1.1B]. And that also got the attention of another company that sells a lot of things for us with a sweet tooth, Nestle. And Nestle came and paid $2.4 billion for Dreyer's in 2002. So from a crisis in '98, they have a great finish. And the great finish that they owed the success to, yes, we made a good plan, yes we put it together, but the employees that were with us were needed to execute that plan and because that charter that had set the culture, and we had been loyal to that, the culture made sure the plan was completed. Without the culture, they all believe they could not have had this level of success. And, with a great plan, without the loyalty and the trust of people, they could have lost good employees that said, "Well, if the company's in trouble, I'm just going to work somewhere else." And that would have been a normal reaction. So that's the story of Dreyer's. And the two things I gave you at the beginning are the two things that are true now. When you start your company, whether you've got four points or ten points, establish a culture for your company, what you're going to stand for, how you're going to treat your employees and what you expect from them, and then live to it. And then when you execute your plans and things don't go perfectly at the end, you did everything you thought that you should, but you get a different result or the economy or something gets you in a storm, that charter, if you've been loyal to it, the most valuable asset that you have is your people and those people will trust you so you can react together and you can build a plan b and move forward. Well that's the Dreyer's case study. I'm Tom Ellsworth and now I need the custom pillow. There we go. Please subscribe here to Valuetainment, where you can see more case studies, as well as great content for the entrepreneur, the best content for entrepreneurs on the Internet, featuring Patrick Bet-David. Until next time, I hope I have left you better than I found you.

Contents

History

The two brand names honor the company's founders: Joseph Edy, a candy maker, and William Dreyer, an ice cream maker. Joseph Edy was born in Missouri and raised in Montana. Joseph Oliver Edy operated a homemade candy and ice cream parlor at 122 North Broadway in Billings, Montana during the 1910s. In the 1920s he and his wife Grace decided to join his brother in California. In 1925 Joseph Edy opened the doors to Edy's Character Candies Shop in Oakland. Edy's high-quality candy quickly became recognized as among the best in the East Bay Area, and Edy was soon operating six shops. William Dreyer also ran a business in the 1920s, an ice cream manufacturing venture in the California dairy country community of Visalia.[1] In 1926 he was recruited to run a large new plant in Oakland for National Ice Cream. While in Oakland, he met Joe Edy.

In 1928 Edy and Dreyer decided to join forces to manufacture ice cream. They secured a small factory and launched Edy's Grand Ice Cream (the "Grand" reflected their street address on Grand Avenue in Oakland).[1] They focused on creative innovations to fuel their small venture. For example, the two men used Joseph Edy's knowledge and expertise in candy-making to create the original Rocky Road ice cream, from a combination of flavors which Edy had previously invented. The chocolate, marshmallow, and nut flavor was named Rocky Road as a means of describing the ice cream's texture as well as the troubled economic times of the Great Depression.[1] Edy and Dreyer are also credited with originating the Toasted Almond and Candy Mint flavors. At the time ice cream had limited flavors such as vanilla, chocolate, and strawberry, but Rocky Road, introduced in 1929, was one of the first combination of flavors. Because only large marshmallows were manufactured at the time, he used his wife's sewing scissors to cut marshmallows into bite-sized pieces to make the first batch of Rocky Road.[1]

Timeline

  • 1906: William Dreyer made his first frozen dessert to celebrate his ship's arrival in America from Germany.[1]
  • 1919 "Edy's is Sold, Form New Firm, Princess owners Buy Broadway Ice Cream Parlors", Billings Gazette (MT), September 14, 1919.
  • 1928: William Dreyer and Joseph Edy found Edy's Grand Ice Cream.
  • 1947: Dreyer and Edy dissolve their partnership and Dreyer purchases and builds a new manufacturing plant at 5929 College Avenue in Oakland. After the dissolution of the partnership, Edy continued business under the Edy's name, operating several ice cream parlors in the San Francisco Bay area, selling candy and ice cream manufactured at the Edy's factory in Oakland.. Edy's were located in Palo Alto at the Town and Country Shopping Center, in San Francisco, Berkeley and several other San Francisco Bay area cities. In 1961 an Edy's opened in Carmel-by-the-Sea under a franchise agreement.
  • 1963: Reins to the business pass from the Dreyer family to Ken Cook, who becomes President.
  • 1977: T. Gary Rogers and W.F. Cronk purchase Dreyer's Grand Ice Cream for $1 million.
  • 1981: Dreyer's went public and its shares were traded on NASDAQ under the ticker symbol DRYR. Around this same time, current Dreyer's President Ken Cook went into the vanilla business. Since that time Dreyer's ice cream has been made with Cook's Vanilla which is produced by Cook Flavoring Company.[5]
  • 2002: In June, Nestlé acquired Dreyer's for $3.2 billion, thus becoming the biggest ice cream maker, with a 17.5% market share.[6] Dreyer's has also acquired its own ice cream brands, including the Snelgrove's Ice Cream brand in Utah.
  • 2004: Dreyer's began using a new churning processes called low-temperature extrusion.[7] Unlike traditional churning methods, the ice cream does not need to be frozen once it is done churning. Since this freezing stage produces large ice crystals, which gives the ice cream a grainy texture, manufacturers would add milk fat to counterbalance the grainy texture. As this extra freezing process isn't necessary with low-temperature extrusion, the "slow churned" line of ice cream is labeled as containing two-thirds the calories and half the fat of "regular" ice cream. Dreyer's has also extended this process to other brands besides its two flagship brands, such as Häagen-Dazs, which it produces under a license from General Mills.
Laurel, Maryland Nestle Plant
Laurel, Maryland Nestle Plant

Cost-cutting changes

In 2002, Nestlé insisted on a smaller container to increase profits and so the standard US half gallon (2 quarts) container (1.89 L) was downsized to 1.75 quarts (1.65 L) container. In May 2008, the 1.75 quart container was further downsized to 1.5 quarts (1.42 L). Most other ice cream manufacturers, with the notable exception of Blue Bell, followed the downsizing move.[9]

References

Edy's delivery truck, Ann Arbor, Michigan
Edy's delivery truck, Ann Arbor, Michigan
  1. ^ a b c d e f Dreyer's History Archived .PDF from defunct DreyersInc.com
  2. ^ Brown, Paul B., and Kichen, Steve. "The Class of 1983: Breaking the Barriers," Forbes, 7 November 1983, p.168.
  3. ^ Royall, Roderick. "Ice Cream Wars," Baltimore Business Journal, 28 April 1986, p.1.
  4. ^ IceCream.com
  5. ^ About Cook Flavoring Company. CooksVanilla.com
  6. ^ "Nestlé takes world ice cream lead", BBC News, January 19, 2006.
  7. ^ Moskin, Julia. "Creamy, Healthier Ice Cream? What’s the Catch?", The New York Times, 26 July 2006.
  8. ^ Dreyer’s Grand Ice Cream Manufacturing Facility, Laurel, Maryland, Food Processing Technology
  9. ^ New product Wednesday, at Dallas-area stores: Dreyer’s Limited Edition Coconut Pineapple Archived 2009-05-02 at the Wayback Machine, Pegasus News, August 2008.

External links

This page was last edited on 17 November 2019, at 17:37
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