THE SCOOP ON PROFITABILITY; NEW CEO LEADS BEN & JERRY'S TOWARD A BETTER BOTTOM LINE.

Byline: Constance L. Hays The New York Times

First Jerry Garcia, leader of the Grateful Dead and inspiration for the popular Cherry Garcia flavor, died. Then the Peace Pop was ruled obsolete. Next, a plan to create an organic ice cream line suffered a meltdown on business principles.

The last few years have brought change and tumult to Ben & Jerry's Homemade Inc., the counterculture's contribution to the ice cream industry. Sure, Ben Cohen and Jerry Greenfield, the co-founders, still show up at the office in cutoff blue jeans and ride motorcycles for recreation across the rapidly disappearing Burlington countryside. And the company observed its 20th birthday on May 5 the same way it always has, with a nationwide handout of free cones.

But much of Ben & Jerry's tie-dyed approach to life has vanished, replaced by a philosophy in which balance-sheet priorities have gained the upper hand. While no one is wearing three-piece suits to work just yet, and Cohen can still be found railing against the military-industrial complex, Ben & Jerry's has undergone a transformation in which practicality rules the roost and even the social mission for which the company became so well known is much more, um, corporate.

The person responsible for most of this is Perry Odak, who took over as chief executive 16 months ago and is widely credited with turning the company's fortunes around.

Odak, a towering, soft-spoken veteran of companies ranging from Color Tile to the U.S. Repeating Arms rifle makers, replaced Robert Holland, who had been selected after a highly publicized nationwide search for someone to take over the day-to-day duties from Cohen, who remains the chairman, and Greenfield, the vice chairman. Holland, a McKinsey-trained consultant whose arrival was greeted with high hopes, lasted less than two years and left for personal reasons.

When Odak arrived in January 1997, Ben & Jerry's sales were down, and more important, morale was battered. Was the social mission, which many employees said was highly important to them, something to be abandoned in the search for profits, or was it going to continue to be a priority?

Odak, 52, concedes a certain lack of wackiness.But maybe the company was finally ready for a different kind of leader. When he arrived, Odak set about reviving the business, filling management slots that had long been vacant, redefining jobs and paying for market research.

Ben & Jerry's has long had great name recognition - 78 percent of those questioned in one poll had heard of the brand - but a lot of people (50 percent in that poll) were not buying. Some consumers were put off by the high fat content, not to mention the steep price, of the ``super premium'' ice cream. But many others were confused by the packaging, according to Odak.

``If you didn't get the funky names,'' he said, ``you didn't know what was in the package.'' To aid shoppers who lacked the time to figure out what Chubby Hubby, say, might contain (malt-flavored ice cream with chocolate-covered, peanut-butter-filled pretzels), he redesigned the carton, pushing the picture of Ben and Jerry off the lid and onto the back and toning down the graphics so that more realistic pictures of the ingredients replaced the busy, hand-drawn look. A $2 million radio advertising campaign was ordered up - a lot for Ben & Jerry's.

Two sagging products, the Peace Pop and the Brownie Bar, were abandoned. In their place came the Phish Stick (a fish-shaped, chocolate-covered confection named for the alternative-rock band) and a series of ice creams on sticks that look more like something Good Humor might come up with.

``We needed to tone down the funkiness without losing the fun,'' Odak said. As for the Peace Pop's demise, he added: ``We said to ourselves, Where is the equity? It's in the Ben & Jerry's name, not in the name Peace Pop.''

Last month, the company announced an alliance with actor Paul Newman, in which it will manufacture Newman's Own ice cream. While Newman's Own sends its own profits on to charity, it will pay Ben & Jerry's for manufacturing the product. The new product will also absorb some of the company's excess factory capacity and give it a contender in the slightly less expensive ``premium'' ice cream category. ``It's a win-win-win situation,'' said Kim Galle, an analyst at Adams Harkness & Hill, a Boston investment bank.

The company earlier this year introduced a new flavor, Dilbert's World Totally Nuts, tied to the popular comic strip. Odak plans to add more ``scoop shops,'' as the company's retail outlets are known, and at least five of those are to be operated with nonprofit groups to employ homeless or otherwise needy people. The company also plans to start selling its ice cream in half-gallon containers in a bid to increase sales volume.

All this seems to be working. Galle projects 12 percent growth in sales this year, to $194.4 million, while earnings for the first quarter were $380,000, compared with a $1.06 million loss for the corresponding period in 1997. The company still lags behind Haagen-Dazs, the leader in the super-premium category.

The stock of Ben & Jerry's, which made its debut at $30.50 a share in 1992 but had fallen as low as $12 last April, is now hovering around the $20 mark, a development that has also aided employee morale.

The company's social agenda also appears to be back on track. Odak points proudly to an environmentally friendly container, made of unbleached paper, that the company has developed and is expected to start using later this year.

Odak's shifts in direction have not always gone over well among old-timers. The decision to get rid of the Peace Pop, for example, left many feeling remorseful. ``There are people inside who really regretted that change,'' Bankowski said. Still, the organization that had inspired the Peace Pop name, One Percent for Peace, had itself ceased to exist.

And the company continues to struggle to recruit and retain minority employees at all levels. Being situated in northern Vermont does not help.

Meanwhile, a proposal to introduce a line of organic ice creams, seemingly perfect for a company like Ben & Jerry's, stumbled over the reality that no one could figure out how to sell it without losing money.

It all represents a coming of age for the company. When it comes to doing good deeds, not to mention selling ice cream, Bankowski added, ``Nothing is simple anymore.''

CAPTION(S):

Box, 2 Charts

BOX: The times they are a changin'

CHART (1) Market share of top-tier ice cream brands 

(2) Ben & Jerry's net income

Sources: A.C. Nielsen via Haagen Dazs; Ben & Jerry's