Dreyer's Grand Ice Cream Holdings, Inc.

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Dreyer's Grand Ice Cream Holdings, Inc.

5929 College Avenue
Oakland, California 94618
Telephone: (510) 652-8187
Fax: (510) 450-4592
Web site: www.dreyersinc.com



To herald the launch of not just a new product line but also an entirely new manufacturing process, Dreyer's Grand Ice Cream Holdings, Inc., initiated in May 2004 what was to become the largest and most aggressive marketing campaign in the company's history. Founded in 1928 as a partnership between William Dreyer and Joseph Edy, Dreyer's (which was known as Edy's east of the Rockies in the United States to avoid confusion with rival Breyers) rose to become the largest ice-cream maker in the United States by 2005. After five years of research and development Dreyer's had come up with a proprietary new way to blend its ice cream that resulted in a richer-tasting but lower-fat version of its traditional product. The San Francisco-based agency Goodby, Silverstein & Partners created an ad campaign that was intended to attract consumers to this new product by building on the established brand name Dreyer's Grand Light yet giving ice-cream buyers a new reason to reach for a product that many felt was inferior to the "real" thing.

The comprehensive campaign, named "Unbelievable," featured four prime-time television spots, backed by print, billboard, and radio advertising. Dreyer's spent $20 million on the campaign. The theme of the TV spots was imitative of classic spy-thriller films, with various people expressing absolute incredulity that the new ice cream could possibly be lower in fat and calories than the original and accusing a fictitious Dreyer's executive of fraud and deceit.

The campaign was both a critical and financial success, winning a Gold EFFIE Award for the ad agency and boosting 2004 sales of Dreyer's Grand Light by 68 percent and overall sales of the company's products by 49 percent over the previous year. "Unbelievable" ran from May through November 2004.


Ice cream had reached a household penetration level of 90 percent by 2004. This meant that almost everyone in America bought ice cream; those who were apt to buy it already had it in their freezers, and those who did not would be difficult to persuade to put it there. As a result, the ice-cream manufacturing industry relied heavily on slight tweaks of established products (such as new shapes, sizes, or flavors) to boost sales. As was often case with mature products, there had been little innovation in the industry for decades. Whether on a stick, on a cone, dipped in chocolate, cut into bite-sized pieces, spread between two cookies, or blended with nuts and caramel, the product remained what it had always been: a frozen concoction made from sugar and cream. In 2004 the per capita consumption of ice cream in the United States was 44 pints per year, the highest in the world. Trying to convince consumers to buy even more of the product was also dicey, because few people thought that ice cream was a healthy food choice to begin with.

The ice-cream industry was not immune to trends, and because of their product's market saturation the manufacturers were quick to capitalize on shifts in consumer attitudes in the hope of increasing sales. In the mid-1980s, when low-fat diets reached a national fever pitch, the ice-cream industry was stymied. People were being told to eat a low-fat diet. Ice cream, as the very name implied, relied on milk fat to produce its rich, creamy taste. Sales of ice cream dropped as Americans turned to lower-fat alternatives. After a few years of both product and market research, in 1987 Dreyer's introduced its Grand Light line of lower-fat ice creams. Sales were initially strong but quickly stagnated as customers found the taste not rich or smooth enough, according to the company's internal research. It seemed that people would rather cut calories and fat in other parts of their diet and eat traditionally fattening ice cream if they ate it at all.

Diets fads came and went, and by the late 1990s the new trend of low-carbohydrate diets was leading the pack. While elimination of fats from consumers' plates was no longer the dietary thrust, reducing refined sugars and calories was, and again ice-cream sales took a hit. Most manufacturers of ice cream jumped the trend by using artificial sweeteners to reduce the sugar and calories in their products or by using fat substitutes to make their ice creams healthier. Unfortunately, "low fat," "low carbohydrate," and "healthy" were synonyms for "tastes bad" in many consumers' minds. For this reason Dreyer's took the innovative step of formulating not new ingredients but a new processing method to produce a version of their traditional ice cream that was lower in fat and calories but much closer in taste to the original.

The end result of a five-year and $100 million investment (in research and development, marketing, and infrastructure improvements) was a proprietary new "slow-churned" process of making ice cream. By employing a significantly lower temperature and higher pressure than traditional methods, the new churning method broke up and flattened the fat molecules in the cream, thereby increasing the number of molecules and their collective surface area while distributing them more evenly throughout the product, resulting in a richer and creamier texture. The manufacturing process took three times longer than with regular ice cream, hence the term "slow churned." One serving of traditional ice cream had 11 grams of fat and 175 calories, while the new product had only 3.5 grams of fat and 100 calories. Dreyer's had great hopes that this new product line, absent artificial or substitute ingredients, would revitalize the static "good-for-you" segment of the ice-cream market and find a welcome reception from health-conscious consumers or those who just wanted to reduce the guilt in an age-old guilty pleasure.


With more than 60 percent of Americans classified as overweight, and with organic, natural, and lower-calorie foods seeing brisk sales going into 2004, Dreyer's aimed to sell its new product across a wide spectrum of consumers, but it intended specifically to target women—traditionally the grocery shoppers in most families—in the hopes that once inside the household the new ice cream would catch on with all members of the family. Research suggested that women were more likely to reach for a healthy alternative to regular ice cream, while men and children were more resistant to anything other than the real thing. In addition, the aim of the campaign was to attract lapsed buyers of "light" ice cream who had abandoned the category on the basis of poor taste as well as people who avoided eating ice cream in general because of its unhealthy nutritional profile.


Dreyer's was acquired by Nestleé in 2003, making the combined company the world leader in ice-cream production and sales, followed by Unilever PLC, maker of the Breyers and Ben & Jerry's brands. In 2004, however, the Breyers brand had total annual U.S. sales of $529.1 million, whereas the Dreyer's brand's U.S. sales topped out at $422.2 million. Dreyer's had for years distributed the Ben & Jerry's brand of ice creams through its own distribution channels. Moving a competitor's product into the marketplace might seem counterproductive, but Dreyer's CEO Gary Rogers explained in an interview with CNN that, with an enormous fleet of its own freezer trucks, Dreyer's had the only direct-to-store distribution network in the United States. Because the Dreyer's distribution business accounted for more than half of its annual profits, it made fiscal sense to extract additional profit from a competitor even if that company's products ultimately sat next to the Dreyer's products on supermarket shelves.

While Dreyer's was the first to market with its new lower-fat ice creams, Unilever was close behind, introducing a "double-churned" version of its Breyers line in 2005. It used a similar process to create a more flavorful and creamy-textured ice cream with less fat and fewer calories. In a widespread TV and print campaign Breyers used the tagline "At Breyers, we believe good things get better … when they're doubled!" and paired it with soothing images from nature of "doubles," such as a double rainbow and a two-pronged waterfall. The advertisements then explained the "double-churned" process.


What Dreyer's determined from its exhaustive research was that most people had an aversion to low-fat or healthy products, believing them to taste significantly worse than foods full of fat and calories. Rather than promote its slow-churned ice cream as a healthy alternative to regular ice cream, Dreyer's, in conjunction with ad agency Goodby, Silverstein & Partners, chose to tackle the problem of skepticism head-on: the crux of the campaign was to tout the incredulous fact that the new ice cream tasted almost as good as the real thing. In fact, in preliminary national blind taste tests, 8 out of 10 people thought that they were eating a full-fat premium ice cream rather than a "light" version. Bolstered by this research, Dreyer's embarked on a $20 million national media campaign, the largest in company history. It featured TV spots, print ads, billboards, radio spots, and commercials that aired in movie theaters prior to feature films.

The company was ambitious in its goal for the campaign, which was to increase stagnant sales of its light ice creams in 2004 by at least 50 percent over the previous year. Considering that the product was not rolled out until May, this amounted to a target increase of 50 percent for only seven months of the year (a period that would, however, include the ice-cream "selling season," which corresponded to the hottest months of the year, May through September). Dreyer's also hoped to create a "halo effect" in the sales of its traditional ice-cream lines as well. Even though no advertising was planned for its regular Grand Ice Cream line in 2004, Dreyer's was counting on its increased media presence to draw customers to all of its products, not just the advertised Dreyer's Grand Light line.

Four TV spots provided the backbone of the campaign. Goodby, Silverstein & Partners' approach was to build on and play off of the skepticism most consumers had about any sort of reduced-calorie dessert product. Rather than try to educate people about the technological innovations of the new product, the ad agency set out to forestall the viewer's incredulity by acknowledging it and taking it a step further. Using a classic-film-noir approach, each of the four spots featured a fictitious Dreyer's executive named Jim who was approached in sinister or underhanded ways by other employees who were so skeptical about the low-fat content of the new slow-churned ice cream that they accused him of passing off real ice cream as the new "light" product. In one spot Jim got into his car in the company parking lot after hours only to have a fellow employee lean forward out of the shadowed back seat and claim, "I know what you're up to." In another commercial Jim was approached by a woman at a company picnic who told him, "It's just not right, what you're doing." In a third Jim was accosted by a security guard who threatened to expose his secret unless Jim provided five gallons of ice cream per week to keep him quiet. The spots were utterly serious in tone, shot in high-contrast filmic style. The deadpan tone belied the silly message, but the point was driven home that this ice cream must be good enough to fool people, even people who worked for Dreyer's. These three spots were edited into one additional commercial that ran like a movie trailer, with fast edits and a voice-over saying, "A man stands alone, accused of a terrible crime." This commercial was played on television and in movie theaters in the advertising time before a feature film.


In 2004, when Dreyer's introduced a new slow-churned version of its original low-fat ice cream, Dreyer's Grand Light (introduced in 1987), it hyped the new technology used to produce the ice cream but kept the same name for the product, not wanting to confuse consumers and hoping to rebuild the stagnant light-ice-cream category on the back of its established brand name. Despite a $20 million media campaign to promote the new product, however, Dreyer's came to learn that the name itself, Grand Light, was an impediment to sales because a certain segment of the population was resistant to anything describing itself as healthy or "light." Halfway through the campaign Dreyer's retooled its packaging to de-emphasize the "light" aspect of the ice cream and to promote its slow-churned manufacturing process more forcefully. Advertising the new ice cream by its process instead of its low-fat and low-calorie content helped boost sales further. From that point on, the packaging featured a larger version of the words "Slow Churned" and a deemphasized "Light" name, so that it effectively read "Dreyer's Slow Churned."

The print campaign took a similar approach, high-lighting the "unbelievable" claim that the new light ice cream was, in fact, a reduced-fat product. One billboard featured a photo of a half-gallon container of the ice cream with the tagline "Introducing New Dreyer's Grand Light." The ad was then made to look as though it had been defaced by graffiti, with the words "no way this is" inserted between the words "Grand" and "Light," resulting in an ad that effectively read: "Introducing New Dreyer's Grand 'no way this is' Light." The radio spots resembled public service announcements, with a deadpan male voice stating, "This message is a public service announcement from Dreyer's Corporation," and then explaining that consumers may have been confused as to whether they had purchased a "light" or regular ice cream because the taste was so similar.


Dreyer's more than met its goals with the campaign. Sales of the Grand Light ice creams rose 83 percent during the campaign's run and 68 percent for the year. Sales of all Dreyer's products increased $429 million, or 49 percent for the year. Clearly the "halo effect" approach had worked as hoped. Even the competition could not deny Dreyer's successful innovation and reinvigoration of the light-ice-cream category. John Cutter, CEO of Friendly Ice Cream Corporation, stated in a 2004 earnings conference call, "One thing that Dreyer's has done very effectively is they've come out with some very good 'better-for-you' products. They have a slow churned ice cream that is very good."

Goodby, Silverstein & Partners won a Gold EFFIE Award (Packaged Food, Diet/Health/Light category) for the campaign; the EFFIEs, held annually by the New York American Marketing Association, was one of the most prestigious award programs in the advertising industry. The campaign also generated a significant amount of press. In addition to numerous write-ups in food-industry magazines, Newsweek ran a piece on the new manufacturing process, CEO Rogers was interviewed on CNN, and the product was taste-tested by the anchors of The Today Show during a food segment.

Dreyer's was ultimately able to jump-start sales in a category that had seen flat sales for the previous three years, and it inspired just about every other major competitor to follow suit. More than 100 "low-carb" ice creams were introduced in 2004, versus only 19 in 2003 and zero in 2000. By positioning itself soundly in the marketplace with its sweeping ad campaign, Dreyer's achieved its goals and put itself ahead of an industry-wide trend.


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                                              Jonathan Kolstad

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Dreyer's Grand Ice Cream Holdings, Inc.

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