We continued to maintain our pledge to purchase milk and cream only from farms that do not use rBGH. Since our successful legal action in the State of Illinois in 1997 with regard to labeling, we have made the following statement on our pint containers:

"We oppose recombinant Bovine Growth Hormone. The family farmers who supply our milk and cream pledge not to treat their cows with rBGH. The FDA has said no significant difference has been shown and no test can now distinguish between milk from rBGH treated and untreated cows."

In those instances where we cannot certify that a dairy-based ingredient is rBGH-free, we add to the above statement the following sentence: “Not all the suppliers of our other ingredients can promise that the milk they use comes from untreated cows."

We support consumers’ right to know how their food is produced. That was the essence of our legal action around recombinant Bovine Growth Hormone. rBGH is a genetically modified organism (GMO) and our label stands as a precedent for consumers’ right to know about GMO foods. In addition to supporting the labeling of GMO foods, we support the establishment of a coordinated regulatory framework that allows for consideration of the ecological and human health implications of GMO crops. In our view, the process should include significantly more public input and discussion. Starting mid-year, a subgroup of the Values Council met a number of times on the issue of GMOs in our products. Dairy is our most significant ingredient, and since we do not use rBGH, our dairy supply is technically GMO-free. However, we recognize that the feed our dairy supplier uses is not. We have started an inventory and analysis of all ingredients with regard to genetically modified corn or soy and a search for alternatives. We have completed a reformulation of our product to meet the international requirements on GMOs for the European Union. Under those requirements we have not yet been able to find alternative ingredients for a few products. Our goal is to be GMO-free in both our domestic and international products. Some of the issues we are confronting at the present time are the availability of a non-GMO supply of ingredient alternatives such as corn syrup and add-ins such as candies, and certification of those supplies.

Based on sales growth in 1999, customer comments per 10,000 units of product shipped declined by 21% from 1998. Product quality complaints declined by 23%; non-product quality complaints declined by 14%; praise comments declined by 38%; and miscellaneous questions and comments declined by 8%.

We believe the downward trend may have been offset by an increase in e-mail correspondence. We do not have reliable data on e-mail contacts, but roughly 1.6 million individual computers contacted our web site (www.benjerry.com).

We entered into a business arrangement with Patagonia (www.patagonia.com) for organic cotton t-shirts and other apparel. We began to pursue organic cotton two years ago, but were unable to maintain the project due to pricing and availability issues.

Three of the entities with which we have licensing agreements generate funds for nonprofits through the agreements listed below.

Phish Food� ice cream produces royalties for the Waterwheel Foundation (www.phish.com/waterwheel/), created in 1998 by the Vermont-based band Phish. The Foundation supports “the protection and preservation of the Lake Champlain region of Vermont.” Royalties donated in 1999 totaled $244,918 compared to $200,482 in 1998.

Doonesberry� Sorbet produced royalties totaling $14,176 compared to $40,150 in 1998 for the Pauley Trudeau Foundation which supports education, AIDS treatment and prevention, reducing poverty, human rights and other progressive causes.

Wavy Gravy™ ice cream produced royalties totaling $20,614 compared to $20,445 in 1998 for Camp-Win-A-Rainbow, which was founded by Wavy Gravy to offer summer camp experiences to low income children.

In 1999 we established one new licensing agreement for the production of cow bandanas, aprons and baby bibs with the Freedom Quilting Bee. This black women’s cooperative is located in Wilcox County, Alabama, one of the poorest and most isolated counties in the United States. In their own words, the Freedom Quilting Bee “has become the embodiment of a concept of economic independence for black women.” This cooperative was started in the Civil Rights era of the mid-60s when many tenant farmers lost their jobs because of their attempts to register to vote. Today the Freedom Quilting Bee is a premier manufacturer of quilts and other sewn products. Their business supports a day care and after school program, a summer feeding program and clothing bank. (The Freedom Quilting Bee, 4295 County Road # 29 Alberta, AL 37620.)

Donations of first quality product in 1999 amounted to $50,000 (our cost, not retail value), compared to $70,000 in 1998. Examples of donation recipients include: The Children’s Defense Fund’s (www.childrensdefense.org) Child Watch Program which brings business, political and social service leaders directly into contact with children to encourage these community decision-makers to take action on children’s issues; and Youth Service America’s (www.ysa.org) National Youth Service Day. In Vermont we gave away 56,674 gallons of second quality product in support of a wide range of nonprofits and community activities.