In 2000 we completed the conversion of our domestic pint packaging to our Eco-Pint which is constructed from unbleached paperboard. We initiated this project four years ago, following an environmental analysis of our packaging. We concluded at the time that the best environmental choice was to stay with paper and improve upon the paper we used. The conventional bleaching process for paper results in the production of dioxin, which the EPA has determined is toxic. Our Eco-Pint also has a nontoxic clay coating. In 2001 a timeline was established to research the development of a biodegradable pint container.

A decision was made in late 2001 to include a tamper-evident seal. Beginning in 2002 the company will use a PETG (polyethylene terephthalate glycol) tamper-evident seal on all of our domestic and international pints. PETG is a thermoplastic polyester resin that is used in the medical and food packaging industry and is recyclable.

Since our founding in 1978, we have expressed a commitment to provide the finest quality all natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. We have also expressed our belief that business has a responsibility to improve the quality of life in our communities, and that includes environmental stewardship.

Ben & Jerry’s products meet or exceed all standards of food safety everywhere they are sold, and that means around the world in a variety of markets.

A web site called junkscience.com attempted to challenge and ridicule information from the U.S. Environmental Protection Agency to raise concerns about dioxin. In doing so, junkscience.com singled out Ben & Jerry’s World�s Best™ Vanilla ice cream as containing trace amounts of dioxin. This was made clearly as a political statement, and was not a food safety issue. Dioxins are a global, atmospheric environmental problem, largely the result of industrial processes. Dioxins exist across the entire food chain and are present in all dairy and meat products, fish and also in mother’s milk. Junkscience.com itself acknowledges that eating the ice cream is safe: “We think dioxin [in low doses] is not dangerous, and Ben & Jerry’s is not dangerous."

The recent U.S. Environmental Protection Agency Dioxin Reassessment reports that there is more to be concerned about than originally thought. The report states that dioxins are carcinogens (over a lifetime of exposure, the risk is ten times higher than previously thought). The report also noted that the good news is that overall dioxin levels in the environment are coming down. The EPA Dioxin Reassessment report can be found at the following website: http://www.epa.gov/ncea/dioxin.htm .

Ben & Jerry’s believes that we need to be proactive in limiting harmful chemicals that may enter the environment. That’s why we have taken steps to make an impact where we can by converting our pint packaging to unbleached paperboard, with the knowledge that a reduced reliance on chlorine as a bleaching agent will lead to a reduction in dioxin releases from paper mills.

We continued to purchase milk and cream only from farms that pledged not to use rBGH, recombinant or genetically engineered growth hormone which is injected in cows to increase their milk production. 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 an ingredient which includes dairy 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 and to make their own choices about what they eat. That was the essence of our position on recombinant Bovine Growth Hormone (rBGH). With regard to genetically modified organisms (GMOs), we support the establishment of a coordinated regulatory framework within the U.S. government that allows for full consideration of the ecological and human health implications of GMO crops, as well as for meaningful public input.

In 2000 we undertook an inventory and analysis of all ingredients with regard to genetically-modified corn or soy. Dairy is our primary ingredient. We found that it is virtually impossible to secure GMO-free assurances from suppliers. In addition, there is no regulatory framework in the United States to guide the definition of GMO-free. Since we oppose the use of rBGH, and due to some reformulation of other ingredients, our products meet the definition of GMO-free in the European Union and Japan.

•Global Warming Campaign - In concert with the Dave Matthews Band, and in partnership with many environmental non-profits including the Sierra Club, the World Wildlife Fund, and the Union of Concerned Scientists, the company began coordination of an initiative for 2002 around Global Warming. The goal is to educate and motivate our consumer base to: 1) urge Congress to enforce legislation that reduces U.S. reliance on fossil fuels and supports renewable, efficient energy sources; 2) reduce carbon load emissions through individual actions; and 3) to motivate consumers abroad around Kyoto issues and personal actions to reduce CO2 emissions.

•Tom Joyner Foundation We developed two flavors for release in 2001 that benefited the Tom Joyner Foundation which supports scholarships at traditionally black colleges. These flavors are Apple Crumble and Island Paradise (See Product Royalties below). It was decided in 2001 that these flavors would be replaced with the popular Butter Pecan, which we hope will generate more royalties for the Tom Joyner Foundation. Additionally, we sponsored the Tom Joyner Foundation Fantastic Voyage, a weeklong cruise designed to raise funds for the Foundation.

•Scoop Trucks - Our fleet of 7 scoop trucks gave out over 250,000 samples in 2001. The trucks supported local organizations either by donating ice cream or by selling ice cream to fundraise for nonprofit groups. Some of the groups we supported in 2001 include: KaBoom!, Literacy Volunteers of America, AIDS Foundation, Christmas in April, the Boys & Girls Clubs and numerous local environmental groups. In total the scoop trucks raised about &36;15,000 for nonprofits.

•Sponsorships Roughly 25% of the sponsorships in 2001 or &36;38,500, were spent on social mission-related sponsorships. These included the Kinship Center, MS Walk and the Boston Earthfest concert.

•Citizen Cool™ In the spring of 2001 we launched our movie-themed flavor, Concession Obsession™. We celebrated this new flavor by making a movie. We asked people around the country to nominate “ordinary folks with extraordinary hearts.” We were looking for individuals who saw a need in their community and addressed it in an innovative way. Essays were submitted and of the over 2,000 nominations we received, we chose 5 individuals for our Citizen Cool film. Citizen Cool is a 30-minute documentary about these people and their work. We will make the movie available at cost to schools, community groups and any other organization that finds it valuable. To read the Citizen Cool profiles go to www.benjerry.com/citizencool

•KaBoom! Playground Build, Emmanuel House, Boston - On May 22, 2001, approximately 60 Ben & Jerry’s employees helped build a playground in Boston. In a single day, we transformed an empty lot into a vibrant and safe community playground. To do this we partnered with KaBOOM! and Emmanuel House. KaBOOM! is a nonprofit organization which has coordinated the building of more than 250 playgrounds since 1995. Emmanuel House is a nonprofit organization that provides a range of services, including child care and after school programs, to low-income families in the Roxbury and South End neighborhoods of Boston.

•Give a Pint - Get a Pint - We decided to combine forces with the American Red Cross and teamed up for blood drawings on campuses nationwide. By bringing our scoop truck and offering free ice cream, we helped to raise awareness about all of the services that the American Red Cross provides. In 2001, along with the American Red Cross, we visited 26 universities across the United States during a college tour that ended in May, 2001. We gave away 2,600 pints of ice cream.

•OWOH Festival - This was the 11th year of this free outdoor festival, held this year at Sugarbush Resort in Warren, Vermont. Our citizen action tables generated 8,000 post cards to Congress on the issues of children and the environment.

•Scooperbowl - This was the 13th year of our involvement in this event that benefits Boston’s Dana Farber Cancer Institute. Along with regional ice cream companies, we donated and scooped products for this 3-day event in June. Attendees paid a &36;5.00 entrance fee and enjoyed unlimited ice cream. We scooped 22,000 servings in 2001. All funds went to the American Cancer Institute and the program raised over &36;110,000 for the Jimmy Fund.

•Intervale Festival - This was the third year we sponsored the Intervale Festival produced by Gardener’s Supply and the Intervale in Burlington, Vermont. The festival was centered on environmental education and activism.

In 2001 Ben & Jerry’s was the only corporate signator, along with hundreds of social service agencies and environmental organizations, to sign the “Invest in America Statement of National Priorities” sent to the President and Congress. This statement expressed the urgency of addressing the needs of children in poor communities and their families, improving public transportation and housing and protecting water and the environment. We felt that signing on to the “Invest in American Statement of National Priorities” represented the philosophy expressed in our company values. We have endorsed similar statements in the past.

In the winter of 2001 Ben & Jerry’s began working to find an effective and sustainable way to mobilize our resources and efforts on behalf of the children in West Africa whose lives are scarred by the brutality of child trafficking and forced child labor in the chocolate producing industry. What we learned was that the issue is far more complex and widespread than any of us could have imagined.

In 2002 Ben & Jerry’s will be sending an executive representative to the Ivory Coast and Mali to meet with non-governmental and governmental groups to investigate the possibilities for our intended plan of action. Our partner in this initiative is the Population Media Center (PMC), an international nonprofit organization that works with radio and television broadcasters, government ministries and non-governmental organizations. PMC addresses social issues at their source through long-term mass media programming such as soap operas and talk shows, integrating scripted themes that educate and increase public awareness around social issues. To learn more about the company’s position go to www.benjerry.com/childlabor.

To learn more about the factors that drive child trafficking, the inroads industry is making to combat forced child labor, and the steps you can take to help, we suggest you start at www.unicef.org and www.iabolish.org.

In 2001 we received 167,300 consumer comments, basically the same amount as we did in 2000.

While the total number of comments was unchanged, increases in complaints were offset by decreases in other types of comments, including praise. This has resulted in a shift in the mix of comments; complaints now account for 80% of the total (76% in 2000). The increase in complaints was driven by product quality issues relating to new product design and now resolved process issues.

We continued to source our most popular t-shirts, the Woody Jackson™ cow design and Phish™, in organic cotton from Patagonia. This accounted for 50% of our volume. These shirts were sold in our company stores, through our franchises and on our web site. Although other t-shirt selections are non-organic cotton, our practice is to source our “best sellers” in organic cotton.

Donations of first quality product in 2001 amounted to &36;36,039 (our cost, not retail value), compared to &36;14,400 in 2000. Examples of donation recipients include: Literacy Program - rewarded participants for reading; Tri-town Community Action Agency, Johnston, RI; Folk Tale Carnival - raised money for children w/disabilities; Region 10 Community Support Services, Atkinson, NH; May Day Fairie Festival - support for Strawbale Greenhouse project; Spoutwood Farm Center, Glen Rock, PA; Tour De Sol -rewarded volunteers; and Northeast Sustainable Energy Association, Greenfield, MA.

In Vermont we gave away over 15,000 gallons of second quality product in support of a wide range of nonprofits and community activities.

After the September 11, 2001 tragedy, several of our employees from the New York City area volunteered to drive the scoop truck as an emergency relief vehicle to transfer food, water and ice cream to volunteers working in and around emergency sites. Food and water was donated by the Hard Rock Café on 57th Street and Ben & Jerry’s donated 6,500 ice cream cup servings.

Our Waterbury Plant tour is one of the leading tourist attractions in the state. We designate a part of the &36;2.00 charge to support a nonprofit organization, usually in Vermont. In 2001, however, we shifted to supporting a company initiative with KaBoom! a national nonprofit who believes that all children should have access to safe play spaces. Funds were used to help defray the cost of a Playground Build at Emmanuel House in Boston. More information is in the Marketing Section of this report.

Five of the entities with which we have licensing agreements generated funds for nonprofits through the agreements listed below. These sums are impacted by sales rates. Phish Food® ice cream produces royalties for the Waterwheel Foundation, 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 2001 totaled &36;193,609, compared to &36;249,457 in 2000. Doonesberry® Sorbet produced royalties totaling &36;2,684, compared to &36;20,236 in 2000 for the Pauley Trudeau Foundation which supports education, AIDS treatment and prevention, reducing poverty, human rights and other progressive causes. Doonesberry was discontinued mid-2000. Wavy Gravy™ ice cream produced royalties totaling &36;8,090, compared to &36;15,032 in 2000, for Camp-Win-A-Rainbow, which was founded by Wavy Gravy to offer summer camp experiences to low income children. Wavy Gravy was discontinued early 2002. New product: KaBerry KaBoom!™ ice cream produced royalties totaling &36;23,900. KaBoom! a national nonprofit, believes that all children should have access to safe play spaces. Royalty money was used to build playgrounds. New products: Apple Crumble™ and Island Paradise™ are two flavors that generated royalties of &36;21,682 for the Tom Joyner Foundation. The Tom Joyner Foundation is a non-profit organization that provides assistance to students at Historically Black Colleges and Universities.