SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark one)

For the fiscal year ended December 30, 2000

OR

For the transition period from ____________ to ____________

Commission file number: 0-14190

DREYER’S GRAND ICE CREAM, INC.
(Exact name of registrant as specified in its charter)

5929 College Avenue, Oakland, California 94618
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (510) 652-8187

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 Par Value
Preferred Stock Purchase Rights

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [_]

     The aggregate market value (based on the average of the high and low prices on March 23, 2001, as reported by Nasdaq) of the Common Stock held by non-affiliates was approximately $612,758,140. Such amount excludes the aggregate market value of shares beneficially owned by the executive officers and members of the Board of Directors of the registrant and this calculation does not reflect a determination that such persons are affiliates for any other purposes. As of March 23, 2001, the latest practicable date, 28,570,513 shares of Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Dreyer’s Grand Ice Cream, Inc. definitive Proxy Statement for the 2001 Annual Meeting of Stockholders to be held on May 9, 2001, are incorporated by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. With the exception of those portions which are specifically incorporated by reference in this Annual Report on Form 10-K, the Dreyer’s Grand Ice Cream, Inc. definitive Proxy Statement for the 2001 Annual Meeting of Stockholders is not to be deemed filed as part of this Annual Report.

Forward-Looking Statements.

The Company may from time to time make written or oral forward-looking statements. Written forward-looking statements may appear in documents filed with the Securities and Exchange Commission, in press releases, and in reports to stockholders. The Private Securities Litigation Reform Act of 1995 contains a “safe harbor” for forward-looking statements upon which the Company relies in making such disclosures. In accordance with this “safe harbor” provision, we have identified that forward-looking statements are contained in this Annual Report on Form 10-K. Also, in connection with this “safe harbor” provision, the Company identifies important factors that could cause the Company’s actual results to differ materially. Those factors include but are not limited to those discussed in the “Risks and Uncertainties” section in  Item 7 of this  Annual Report on Form 10-K. Any such statement is qualified by reference to the cautionary statements set forth below and in the Company’s other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Such forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company’s actual actions or results to differ materially from those contained in any forward-looking statement made by or on behalf of the Company.

PART I

Item 1.   Business.

General

     Dreyer’s Grand Ice Cream, Inc. and its consolidated subsidiaries are, unless the context otherwise requires, sometimes referred to herein as “Dreyer’s” or the “Company.” The Company, successor to the original Dreyer’s Grand Ice Cream business, was originally incorporated in California on February 23, 1977 and reincorporated in Delaware on December 28, 1985.

     Dreyer’s manufactures and distributes premium and superpremium ice cream and other frozen dessert products. Since 1977, Dreyer’s has developed from a specialty ice cream sold principally in selected San Francisco Bay Area grocery and ice cream stores to a broad line of ice cream and other frozen dessert products sold under the Dreyer’s and Edy’s brand names in retail outlets serving more than 89 percent of the households in the United States. The Dreyer’s line of products are available in the thirteen western states, Texas and certain markets in the Far East and South America. The Company’s products are sold under the Edy’s brand name generally throughout the remaining regions of the United States and certain markets in the Caribbean and Europe. The Dreyer’s and Edy’s line of ice cream and related products are distributed through a direct-store-delivery distribution network further described below under the caption “Marketing, Sales and Distribution.” These products are relatively expensive and are sold by the Company and its independent distributors to grocery stores, convenience stores, club stores, ice cream parlors, restaurants, hotels and certain other accounts. The Dreyer’s and Edy’s brands enjoy strong consumer recognition and loyalty. The Company also manufactures and distributes branded ice cream and frozen dessert products of other companies.

Markets

     Ice cream was traditionally supplied by dairies as an adjunct to their basic milk business. Accordingly, ice cream was marketed like milk, as a fungible commodity, and manufacturers competed primarily on the basis of price. This price competition motivated ice cream producers to seek economies in their formulations. The resulting trend to lower quality ice cream created an opportunity for the Company and other producers of premium ice creams, whose products can be differentiated on the basis of quality, technological sophistication and brand image, rather than price. Moreover, the market for all packaged ice creams was influenced by the steady increase in market share of “private label” ice cream products owned by the major grocery chains and the purchase or construction by the chains of their own milk and ice cream plants. The resulting reduction in the demand for milk and the “regular” ice cream brands produced by the independent dairies has caused many such dairies to withdraw from the market. Manufacturing and formulation complexities, broader flavor requirements, consumer preference and brand identity, however, make it more difficult for the chains’ private label brands to compete effectively in the premium market segment. As a result, independent premium brands such as the Company’s are normally stocked by major grocery chains.

     While many foodservice operators, including hotels, schools, hospitals and other institutions, buy ice cream primarily on the basis of price, there are also those in the foodservice industry who purchase ice cream based on its quality. Operators of ice cream shops wanting to feature a quality brand, restaurants that include an ice cream brand on their menu and clubs or chefs concerned with the quality of their fare are often willing to pay for Dreyer’s quality, image and brand identity.

Products

     The Company and its predecessors have always been innovators of flavors, package development and formulation. William A. Dreyer, the founder of Dreyer’s and the creator of Dreyer’s Grand Ice Cream, is credited with inventing many popular flavors including Rocky Road. Dreyer’s was the first manufacturer to produce an ice cream lower in calories. The Company’s Grand Light® formulation was a precursor to the reduced fat and reduced sugar products in the Company’s current product line.

2

     The Company uses only the highest quality ingredients in its products. The Company’s philosophy is to make changes in its formulations or production processes only to the extent that such changes do not compromise quality for cost even when the industry in general may adopt such new formulation or process compromises. Company brand products include licensed and joint venture products. Dreyer’s and Edy’s Grand Ice Cream® is the Company’s flagship product which utilizes traditional formulations with all natural flavorings and is characterized by premium quality, taste and texture, and diverse flavor selection. The flagship product is complemented by Dreyer’s and Edy’s Homemade Ice Cream® , a heavier and sweeter line of ice creams, and the Company’s Frozen Yogurt; Grand Light® ; No Sugar Added and Fat Free ice creams. The Company believes these “better for you” products are well-positioned in the market where products are characterized by lower levels of fat, sugar and cholesterol than those of regular ice cream.

     The Company’s superpremium product line includes Dreyer’s and Edy’s Dreamery™ Ice Cream, Whole Fruit Sorbet, Starbucks® Ice Cream, and Godiva® Ice Cream. The Company distributes Starbucks® Ice Cream products as part of its joint venture with Starbucks Coffee Company, and premium M&M/Mars ice cream products as part of its joint venture with M&M/Mars. The Company also manufactures and distributes Godiva® Ice Cream, a superpremium product produced by the Company under a long-term license with Godiva® Chocolatier. The Company also produces and markets Grand Soft® , a premium soft serve product. The Company’s novelty line features Dreyer’s and Edy’s Ice Cream Bars, Whole Fruit Bars, Sundae Cones and Starbucks® Frappuccino Bars. The Company also distributes and, in some instances, manufactures selected branded frozen dessert products of other companies.

     The Company’s product lines now include approximately 130 flavors. Some flavors are seasonal and are produced only as a featured flavor during particular months. The Company operates a continuous flavor development and evaluation program and adjusts its product line based on general popularity and intensity of consumer response.

     The Company holds registered trademarks on many of its products. Dreyer’s believes that consumers associate the Company’s trademarks, distinctive packaging and trade dress with its high-quality products. The Company does not own any patents that are material to its business. Research and development expenses are not significant, nor have they been significant in the past.

     In addition to its company brand products, the Company also distributes products for other manufacturers, or partner brands. Ben & Jerry’s and Healthy Choice are two of the Company’s partner brands.

Marketing, Sales and Distribution

Marketing

     The Company’s marketing strategy is based upon management’s belief that a significant number of people prefer a quality product and quality image in ice cream just as they do in other product categories. A quality image is communicated in many ways - taste, packaging, flavor selection, price and often through advertising and promotion. If consistency in the product’s quality and image are strictly maintained, a brand can develop a clearly defined and loyal consumer following. It is the Company’s goal to develop such a consumer following in each major market in which it does business.

The Strategic Plan

     In 1994, the Company adopted a strategic plan to accelerate the sales of its brand throughout the country (the Strategic Plan). The key elements of this plan are: 1) to build high-margin brands with leading market shares through effective consumer marketing activities, 2) to expand the Company’s direct-store-delivery distribution network to national scale and enhance this capability with sophisticated information and logistics systems and 3) to introduce innovative new products. The potential benefits of the Strategic Plan are increased market share and future earnings above those levels that would be attained in the absence of the Strategic Plan.

     In accordance with the Strategic Plan, the Company embarked on an aggressive national expansion. This expansion involved the entry into 34 new markets, which included the opening of a major manufacturing and distribution center in Texas, a significant increase in marketing spending and the introduction of several new products. At the same time, the Company invested in its soft-serve equipment manufacturing business, Grand Soft. The investments which were required to fund the brand-building actions and national expansion and to support the Grand Soft business substantially increased the Company’s cost structure.

     Beginning in late 1997 and continuing into 1998, the cost of dairy raw materials, the primary ingredient in ice cream, increased significantly. These costs peaked in 1998 at a rate more than double of that experienced in 1997. This increase reduced the Company’s 1998 gross profit by approximately $22,000,000 when compared with 1997. Aggressive discounting by the Company’s competitors made it difficult to raise prices by an amount sufficient to compensate for these higher dairy raw material costs. During this same period, sales volumes of the Company’s “better for you” products continued the significant decline that began in 1997, consistent with an industry-wide trend. Since these “better for you” products enjoy higher margins than the Company’s classic ice cream, the volume decline had a significant impact on the Company’s profitability in 1998. Finally, in August 1998, Ben & Jerry’s Homemade, Inc. (Ben & Jerry’s) informed the Company of its intention to terminate its distribution contract. Subsequent negotiations with Ben & Jerry’s revised the original contract terms to allow the Company to distribute Ben & Jerry’s products in a smaller geographic area. Starting September 1, 1999, this was estimated to reduce the Company’s distribution gross profit of Ben & Jerry’s products by approximately 54 percent. The Company estimates that the distribution gross profit in the markets where it stopped distributing Ben & Jerry’s products represented approximately six percent, or $13,000,000, of its gross profit in 1998.

     The above factors: the higher dairy raw material costs; the decline in “better for you” volumes; and the reduction in Ben & Jerry’s sales had in the past, and may continue to have in the future, a negative effect on the Company’s gross profit and its ability to successfully implement the Strategic Plan. The Company, therefore, concluded that a thorough reassessment of its cost structure and strategy was necessary. This reassessment yielded restructuring actions designed to improve profitability and accelerate cost reductions by increasing focus on the core elements of the Strategic Plan. On October 16, 1998, the board of directors approved the 1998 restructuring actions.

3

     The Company intends to continue to pursue the benefits of the Strategic Plan through four long-term initiatives. These initiatives are as follows: 1) growth in share and sales in the premium ice cream business; 2) expansion of the Company’s new, higher-margin superpremium ice cream brands; 3) accelerated development of the Company’s business in a wider number of retail channels, especially mass-merchandisers, convenience stores, and foodservice outlets; and 4) a focus on improved productivity through a reduction in total delivered costs, meaning the per-unit costs of manufacturing, selling and distribution, and support activities.

Sales

     Three customers, Kroger Co., Albertson’s, Inc. and Safeway, Inc., each accounted for ten percent or more of 2000 sales. The Company’s export sales were about one percent of 2000 sales.

     The Company experiences a seasonal fluctuation in sales, with more demand for its products during the spring and summer than during the fall and winter.

Premium and Superpremium Products and Channel Development

     The Company continues to make progress towards the key elements of the Strategic Plan. This progress has yielded an increased market share in a consolidating industry. In the premium segment, the 2000 launch of the new co-branded M&M/Mars line has increased the Company’s presence in the premium category. These products are being manufactured and distributed by the Company under the terms of the joint venture agreement. The formation of this long-term partnership with M&M/Mars to market a new line of ice cream products featuring M&M/Mars leading candy brands is consistent with the Company’s strategy to expand its portfolio of brands and products to reach consumers across the entire ice cream category. In addition, the Company has had significant success in the superpremium segment in recent years with the introductions of Dreyer’s and Edy’s Dreamery™ Ice Cream, Whole Fruit Sorbet, Starbucks® Ice Cream, and Godiva® Ice Cream. In 2000, the Company signed a new agreement with Ben & Jerry’s to resume national distribution of its superpremium product line to the grocery channel in the Spring of 2001 and to work together with Ben & Jerry’s to expand the Company’s distribution of Ben & Jerry’s products in non-grocery channels.

     For additional information, see the discussions set forth under the captions “Revision of Ben & Jerry’s Distribution Agreement”, “New Ben & Jerry’s Distribution Agreement” and “1998 Restructuring Program and Other Actions” in “Management’s Discussion and Analysis” under Item 7 of this Annual Report on Form 10-K.

Direct-store-delivery Distribution Network

     Unlike most other ice cream manufacturers, the Company uses a direct-store-delivery distribution network to distribute the Company’s products directly to the retail ice cream cabinet by either the Company’s own personnel or independent distributors who primarily distribute the Company’s products. This store level distribution allows service to be tailored to the needs of each store. The Company believes this service ensures superior product handling, quality control, flavor selection and retail display. The implementation of this system has resulted in an ice cream distribution network capable of providing frequent direct service to grocery stores in every market where the Company’s products are sold. Under the Strategic Plan, the Company’s distribution network has been significantly expanded to where the Company’s products are available to retail outlets serving approximately 89 percent of the households in the United States. This distribution network is considerably larger than any other direct-store-delivery system for ice cream products currently operating in the United States.

     In connection with the expansion of the Company’s distribution network, the Company has entered into various distributor acquisitions. On February 9, 2000, the Company purchased the remaining 84 percent of the outstanding common stock of Cherokee Cream Company, Inc., the parent of Sunbelt Distributors, Inc., the Company’s independent distributor in Texas. On September 29, 2000, the Company acquired certain assets of Specialty Frozen Products, L.P., the leading independent direct-store-delivery ice cream distributor in the Pacific Northwest.

     The distribution network in the West now includes 13 distribution centers operated by the Company in large metropolitan areas such as Los Angeles, the San Francisco Bay Area, Phoenix, San Diego, Houston, Seattle and Denver. The Company also has independent distributors handling the Company’s products in various areas of the thirteen western states, the Far East and South America.

     Distribution in the remainder of the United States is under the Edy’s brand name with most of the distribution handled through 18 Company-owned distribution centers, including centers in the New York/New Jersey metropolitan area, Chicago, the Washington/Baltimore metropolitan area, Atlanta, Tampa and Kansas City. The Company also has independent distributors handling the Company’s products in certain market areas east of the Rocky Mountains, the Caribbean and Europe.

     Taken together, independent distributors accounted for approximately 18 percent of the Company’s consolidated sales in fiscal 2000. The Company’s agreements with its independent distributors are generally terminable upon 30 days notice by either party.

     Each distributor, whether Company-owned or independent, is primarily responsible for sales of all products within its respective market area. However, the Company provides sales and marketing support to its independent distributors, including training seminars, sales aids of many kinds, point of purchase materials, assistance with promotions and other sales support.

Manufacturing

     The Company manufactures its products at its plants in Union City, California; City of Commerce, California; Fort Wayne, Indiana; Houston, Texas; and Salt Lake City, Utah. The Company also has manufacturing agreements with five different companies to produce a portion of its novelty products. During 2000, approximately 8,000,000 dozens (80 percent of total novelty production) of Dreyer’s and Edy’s Ice Cream Bars and Whole Fruit Bars and Starbucks® Frappuccino Bars were produced under these agreements. In addition, the Company has agreements to produce products for other manufacturers. In 2000, the Company manufactured approximately 11,000,000 gallons of product under these agreements. Total production, including both company brands and other manufacturers’ brands was 120,000,000 gallons during 2000.

4

     The largest component of the Company’s cost of production is raw materials, principally dairy products and sugar. Historically, and over the long term, the Company has been able to compensate for increases in the price level of these commodities through price increases and manufacturing and distribution operating efficiencies. During 2000, dairy raw material costs declined which favorably impacted gross profit by approximately $9,300,000 as compared to 1999. During 1999, dairy raw material costs favorably impacted gross profit by approximately $15,000,000 as compared to 1998. During 1998, the increase in dairy raw material costs unfavorably impacted gross profit by $22,000,000 as compared to 1997. Dairy raw material costs have been unfavorable thus far during 2001 as compared to 2000.

     Other cost increases such as labor and general administrative costs were offset by productivity gains and other operating efficiencies.

     In order to ensure consistency of flavor, each of the Company’s manufacturing plants purchase, to the extent practicable, all of its required dairy ingredients from a limited number of suppliers. These dairy products and most other ingredients or their equivalents are available from multiple sources. The Company maintains a rigorous process for evaluating qualified alternative suppliers of its key ingredients.

Competition

     The Company’s manufactured products compete on the basis of brand image, quality, breadth of flavor selection and price. The ice cream industry is highly competitive and most ice cream manufacturers, including full line dairies, the major grocery chains and the other independent ice cream processors, are capable of manufacturing and marketing high quality ice creams. Furthermore, there are relatively few barriers to new entrants in the ice cream business. However, reduced fat and reduced sugar ice cream products generally require technologically-sophisticated formulations and production in comparison to standard or “regular” ice cream products.

     Much of the Company’s competition comes from the “private label” brands produced by or for the major supermarket chains. These brands generally sell at prices below those charged by the Company for its products. Because these brands are owned by the retailer, they often receive preferential treatment when the retailers allocate available freezer space. The Company’s competition also includes premium and superpremium ice creams produced by other ice cream manufacturers, some of whom are owned by parent companies much larger than the Company.

Employees

     On December 30, 2000, the Company had approximately 4,300 employees. The Company’s Union City manufacturing and distribution employees are represented by the Teamsters Local 853 and by the International Union of Operating Engineers, Stationary Local No. 39. The contract with Teamsters Local 853 for the Company’s manufacturing employees is currently being renegotiated; the former contract expired December 31, 2000 and automatically was extended during negotiations. The contract with Teamsters Local 853 for sales and distribution employees expires in September 2003. The contract with the International Union of Operating Engineers, Stationary Local No. 39 expires in August 2001. Certain of the Company’s employees in the Monterey area are represented by the General Teamsters, Warehousemen and Helpers Union Local 890, whose contract expires in June 2001. The Sacramento distribution employees are represented by the Chauffeurs, Teamsters and Helpers Union, Local 150, whose contract with the Company expires in August 2004. The St. Louis distribution employees are represented by the United Food & Commercial Workers Union, Local 655, whose contract with the Company expires in January 2004. The Company has never experienced a strike by any of its employees.

Item 2.   Properties.

The Company owns its headquarters located at 5929 College Avenue in Oakland, California. The headquarters buildings include 83,000 square feet of office space utilized by the Company and 10,000 square feet of retail space leased to third parties.

     The Company owns a manufacturing and distribution facility in Union City, California. This facility has approximately 40,000 square feet of manufacturing, dry storage and office space and 60,000 square feet of cold storage warehouse space. The plant has estimated capacity of 51,000,000 gallons per year. During 2000, the facility produced approximately 19,000,000 gallons of ice cream and related products.

     The Company leases an ice cream manufacturing plant with an adjoining cold storage warehouse located in the City of Commerce, California. This facility has approximately 89,000 square feet of manufacturing, dry storage and office space and 9,000 square feet of cold storage space. The lease on this property, including renewal options, expires in 2022. The plant has estimated capacity of 32,000,000 gallons per year. During 2000, the facility produced approximately 18,000,000 gallons of ice cream and related products.

     The Company owns a cold storage warehouse facility located in the City of Industry, California. This facility has approximately 55,000 square feet of cold and dry storage warehouse space and office space. This facility supplements the cold storage warehouse and office space leased in the City of Commerce.

5

     The Company owns a manufacturing plant with an adjoining cold storage warehouse in Fort Wayne, Indiana. This facility has approximately 58,000 square feet of manufacturing and office space and 104,000 square feet of dry and cold storage space. The plant has estimated capacity of 64,000,000 gallons per year. During 2000, the facility produced approximately 54,000,000 gallons of ice cream and related products. The Company’s original purchase and development of the Fort Wayne facility was financed by industrial development bonds and the property is pledged as collateral to secure payment of the Company’s obligations to the issuer of the irrevocable letter of credit established for the benefit of the bondholders.

     The Company owns a manufacturing and distribution facility in Houston, Texas. This facility has approximately 50,000 square feet of manufacturing, dry storage and office space and 80,000 square feet of cold storage warehouse space. The plant has estimated capacity of 36,000,000 gallons per year. During 2000, this facility produced approximately 22,000,000 gallons of ice cream and related products. As discussed under the caption, “1998 Restructuring Program and Other Actions” of “Management’s Discussion and Analysis” under Item 7 of this Annual Report on Form 10-K, the Company expects to realize substantially lower production volumes over the remaining useful life of its Houston, Texas manufacturing plant than originally contemplated. However, the Company anticipates that the production levels at the Texas manufacturing plant may increase for the next several years pending the addition of more manufacturing capacity in the eastern half of the United States.

     The Company owns a manufacturing and distribution facility in Salt Lake City, Utah. This facility has approximately 13,000 square feet of manufacturing, dry storage and office space and 13,000 square feet of cold storage space. Another 18,000 square feet of cold storage space and 4,000 square feet of office space is leased. The plant has estimated capacity of 12,000,000 gallons per year. During 2000, the facility produced approximately 7,000,000 gallons of ice cream and related products.

     The Company intentionally acquires, designs and constructs its manufacturing and distribution facilities with a capacity greater than current needs require. This is done to facilitate growth and expansion and minimize future capital outlays. The cost of carrying this excess capacity is not significant. The estimated plant productive capacities discussed above will be heavily influenced by seasonal demand fluctuations, internal or external inventory storage availability and costs, and the type of product or package produced.

     The Company leases or rents various local distribution and office facilities with leases expiring through the year 2022, including options to renew, except for one that has 87 years remaining under the lease.

Item 3.  Legal Proceedings.

     Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders.

     Not applicable.

THIS SPACE INTENTIONALLY LEFT BLANK

6

Executive Officers of the Registrant

     The Company’s executive officers and their ages are as follows:

     All officers hold office at the pleasure of the Board of Directors. There is no family relationship among the above officers.

     Mr. Rogers has served as the Company’s Chairman of the Board and Chief Executive Officer since its incorporation in February 1977.

     Mr. Cronk has served as a director of the Company since its incorporation in February 1977 and has been the Company’s President since April 1981.

     Mr. Manwell has served as Secretary of the Company since its incorporation and as a director of the Company since April 1981. Since March 1982, Mr. Manwell has been a partner in the law firm of Manwell & Schwartz.

     Mr. Delaplane has served as Vice President — Sales of the Company since May 1987.

     Mr. Johnston has served as Vice President —Marketing of the Company since March 1996. From September 1995 to March 1996, he served as Vice President — New Business of the Company. From May 1988 to August 1995, he served as the Company’s Director of Marketing.

     Mr. Kahn has served as Vice President — Finance and Administration and Chief Financial Officer of the Company since March 1998. From 1994 through October 1997, Mr. Kahn served in the positions of Senior Vice President, Chief Financial Officer and Vice President for several divisions of PepsiCo, Inc., including Pizza Hut, Inc.

     Mr. Oldenburg has served as Vice President — Operations of the Company since September 1986.

7

PART II

Item 5.  Market for Registrant’s Common Equity and Related Stockholder Matters.

The Company’s Common Stock has been traded on the Nasdaq National Market under the symbol “DRYR” since 1981. On March 23, 2001, the number of holders of record of the Company’s common stock was approximately 5,828. The following table sets forth the range of quarterly high and low closing sale prices of the Common Stock as reported on the Nasdaq National Market:

     The Company paid a regular quarterly dividend of $.03 per share of common stock for each quarter of 2000, 1999 and 1998. On February 14, 2001, the Board of Directors, subject to compliance with applicable law, contractual provisions, and future review of the condition of the Company, declared its intention to increase the regular quarterly dividend from $.03 per common share to $.06 per common share starting with the first quarter of 2001. The Company’s revolving line of credit agreement prohibits the declaration and payment of dividends in excess of $10,000,000 and $15,000,000 in 2001 and 2002, respectively, and in excess of $20,000,000 in each of the years 2003, 2004 and 2005.

     On November 18, 1997, the Company issued shares of common stock to holders of record on October 30, 1997 to effect a two-for-one common stock split. Unless otherwise indicated, all share information appearing in this report has been restated to reflect this stock split on a retroactive basis.

8

Item 6.  Selected Financial Data.

9

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

The Company may from time to time make written or oral forward-looking statements. Written forward-looking statements may appear in documents filed with the Securities and Exchange Commission, in press releases, and in reports to stockholders. The Private Securities Litigation Reform Act of 1995 contains a “safe harbor” for forward-looking statements upon which the Company relies in making such disclosures. In accordance with this “safe harbor” provision, we have identified that forward-looking statements are contained in this Annual Report on Form 10-K. Also, in connection with this “safe harbor” provision, the Company identifies important factors that could cause the Company’s actual results to differ materially. Those factors include but are not limited to those discussed in the “Risks and Uncertainties” section below. Any such statement is qualified by reference to the cautionary statements set forth below and in the Company’s other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Such forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company’s actual actions or results to differ materially from those contained in any forward-looking statement made by or on behalf of the Company.

Risks and Uncertainties

The Company believes that the benefits under the Strategic Plan will be realized in future years, although no assurance can be given that the expectations relative to future market share and earnings benefits of the strategy will be achieved. Specific factors that might cause such a difference include, but are not limited to, the Company’s ability to achieve the cost reductions anticipated from its restructuring program and to achieve efficiencies in its manufacturing and distribution operations without negatively affecting sales, the cost of dairy raw materials and other commodities used in the Company’s products, competitors’ marketing and promotion responses, market conditions affecting the price of the Company’s products, the Company’s ability to increase sales of its own branded products, responsiveness of the trade and consumers to the Company’s new products and increased marketing and trade promotion expenses.

Financial Summary

The Company recorded net income available to common stockholders of $24,220,000, or $.72 per diluted common share, for the 53 weeks ended December 30, 2000. These results represent a substantial improvement over the net income available to common stockholders of $9,872,000, or $.33 per diluted common share, for the 52 weeks ended December 25, 1999. Consolidated sales increased nine percent over 1999 to $1,194,356,000. The improved results for 2000 reflect the effect of increased sales of higher-margin products, comparatively lower dairy raw material costs, higher average wholesale prices, and higher unit sales of the Company’s established brands.

RESULTS OF OPERATIONS

53 Weeks Ended 2000 Compared with 52 Weeks Ended 1999

Consolidated sales for 2000 increased $94,539,000, or nine percent, to $1,194,356,000 from $1,099,817,000 for 1999.

     Sales of the Company’s branded products, including our licensed and joint venture products (company brands), increased $110,836,000, or 15 percent, to $840,356,000 from $729,520,000 for 1999. Company brands represented 70 percent of consolidated sales in 2000 compared with 66 percent in 1999. The increase in sales of the Company’s branded products resulted from increased sales of higher-margin products, higher average wholesale prices and higher unit sales of the Company’s established brands. The products that led this increase were the co-branded M&M/Mars line, superpremium Dreamery™ Ice Cream, premium Dreyer’s Grand Ice Cream and Edy’s Grand Ice Cream and Whole Fruit Bars. Average wholesale prices for the Company’s branded products increased approximately six percent, before the effect of increased trade promotion expenses which are classified as selling general and administrative expenses (see “New Accounting Pronouncement”). This increase was due to the combined effect of higher wholesale prices and a shift in mix to higher-priced products. Gallon sales of the Company’s branded products increased 9,000,000 gallons, or nine percent, to approximately 109,000,000 gallons. The average national dollar market share of the Company’s Dreyer’s and Edy’s branded premium packaged products was 14.9 percent in 2000 compared to 14.5 percent in 1999. The same statistic for superpremium packaged products was 24.9 percent in 2000 compared to 19.3 percent in 1999.

     Sales of products distributed for other manufacturers (partner brands) decreased $16,297,000 or four percent, to $354,000,000 from $370,297,000 for 1999. Sales of partner brands represented 30 percent of consolidated sales in 2000 compared with 34 percent in 1999. The primary cause of the decrease in partner brand sales for 2000 was that the Company began distributing Ben & Jerry’s products in a smaller geographic area during September 1999. (see “New Ben & Jerry’s Distribution Agreement”). Average wholesale prices for partner brands increased approximately two percent, while unit sales decreased six percent.

     Cost of goods sold increased $51,505,000, or six percent, over 1999, while the gross margin increased to 26 percent from 24 percent. This gross margin improvement was primarily the result of increased sales of higher-margin products, comparatively lower dairy raw material costs, higher average wholesale prices, and higher unit sales of the Company’s established brands. The effect of these positive factors more than offset the loss of distribution gross profit from Ben & Jerry’s sales. (see “New Ben & Jerry’s Distribution Agreement”). The impact of the decrease in dairy raw material costs favorably impacted gross profit in 2000 by approximately $9,300,000 as compared to 1999.

10

     Other income increased $1,668,000, or 80 percent, to $3,758,000 from $2,090,000 for 1999 due to an increase in brokerage income partially offset by a decrease in earnings from joint ventures accounted for under the equity method.

     Selling, general and administrative expenses increased $20,593,000, or nine percent, to $255,739,000 from $235,146,000 for 1999 but remained unchanged as a percentage of total sales at 21 percent. This increase primarily reflects marketing spending, including trade promotion expenses (see “New Accounting Pronouncement”) related to the ongoing support of the Dreamery™ line and the Dreyer’s and Edy’s premium portfolio and, to a lesser extent, increases in adminstrative expenses. Costs associated with the Company’s earlier bid to acquire Ben & Jerry’s and the subsequent negotiations of the national distribution agreement also contributed to the increase.

     Interest expense increased $902,000, or eight percent, over 1999, primarily due to higher average borrowings required for funding acquisitions.

     The income tax provision increased due to a correspondingly higher pre-tax income in 2000. The effective tax rate decreased slightly to 37.5 percent from 38.1 percent for 1999. The Company’s income tax provisions for 2000 and 1999 differ from tax provisions calculated at the federal statutory tax rate primarily due to tax credits and state income taxes.

52 Weeks Ended 1999 Compared with 52 Weeks Ended 1998

Consolidated sales for 1999 increased $77,482,000, or eight percent, to $1,099,817,000 from $1,022,335,000 for 1998.

     Sales of the Company’s branded products, including our licensed and joint venture products (company brands), increased $81,775,000, or 13 percent, to $729,520,000, from $647,745,000 for 1998. Company brands represented 66 percent of consolidated sales in 1999 compared with 63 percent in 1998. The increase in sales of the Company’s branded products resulted from the introduction of new, higher-margin products, increased average wholesale prices and higher unit sales of the Company’s established brands. The products that led this increase in sales were Dreyer’s and Edy’s Grand Ice Cream, the recently introduced Dreamery™ Ice Cream and Godiva® Ice Cream. Despite the fact that sales of the Company’s “better for you” products continued their decline, although at a slower rate, the Company’s market share increased. The increase was due to the fact that the Company’s “better for you” product sales declined at a slower rate than the industry as a whole. Average wholesale prices for the Company’s branded products increased approximately seven percent, before the effect of increased trade promotion expenses. This increase was due to the combined effect of higher wholesale prices and a shift in mix to higher-priced products. Gallon sales of the Company’s branded products increased 7,000,000 gallons, or eight percent, to approximately 100,000,000 gallons. The average national dollar market share of the Company’s Dreyer’s and Edy’s branded premium packaged products was 14.5 percent in 1999 compared to 14.8 percent in 1998. The same statistic for superpremium packaged products was 19.3 percent in 1999 compared to 10.8 percent in 1998.

     Sales of products distributed for other manufacturers (partner brands) decreased $4,293,000, or one percent, to $370,297,000 from $374,590,000 for 1998. Sales of partner brands represented 34 percent of consolidated sales in 1999 compared with 37 percent in 1998. The primary cause of the decrease in partner brand sales for 1999 was that the Company began distributing Ben & Jerry’s products in a smaller geographic area during September 1999. Average wholesale prices for partner brands increased approximately three percent, while unit sales decreased five percent.

     Cost of goods sold increased $10,045,000, or one percent, over 1998, while the gross margin increased to 24 percent from 19 percent. This gross margin improvement was primarily the result of increased sales of new, higher-margin products, comparatively lower dairy raw material costs, higher average wholesale prices, and higher unit sales of the Company’s established brands. These improvements were partially offset by reduced sales of Ben & Jerry’s products. The impact of the decrease in dairy raw material costs favorably impacted gross profit in 1999 by approximately $15,000,000 as compared to 1998.

     Other income decreased $1,563,000, or 43 percent, to $2,090,000 from $3,653,000 for 1998 due to a decline in earnings from a joint venture accounted for under the equity method.

     Selling, general and administrative expenses increased $22,995,000, or 11 percent, to $235,146,000 from $212,151,000 for 1998. Selling, general and administrative expenses represented 21 percent of consolidated sales in 1999 and 1998. Selling, general, and administrative expenses in 1998 included a $5,000,000 bad debt provision for an independent distributor’s trade accounts receivable. Excluding the effect of the bad debt provision, selling, general and administrative expenses would have increased by $27,995,000, or 14 percent, over 1998. This increase primarily reflects significantly higher trade promotion and marketing expenses associated with the launch of new products.

     As discussed in “The Strategic Plan and Restructuring Program” section of this Management’s Discussion and Analysis, the Company implemented a restructuring program and other actions during 1998. As a part of this restructuring program, the Company pursued various proposals relating to the outsourcing from the equipment manufacturing business of its Grand Soft unit during 1999. An analysis of purchase offers received on this business concluded that an outright sale was not economically feasible. As an alternative, the Company’s Grand Soft unit outsourced its equipment production to an independent sub-manufacturer. As a result, the Company completed the outsourcing from the equipment manufacturing business at a cost less than originally estimated and recorded a $1,315,000 reversal of the excess restructuring accrual in the 1999 Consolidated Statement of Operations.

     Interest expense decreased $1,556,000, or 12 percent, over 1998, primarily due to lower average borrowings.

     The income tax provision increased due to a correspondingly higher pre-tax income in 1999. The effective tax rate increased to 38.1 percent from 37.9 percent for 1998. The Company’s income tax provisions for 1999 and 1998 differ from tax provisions calculated at the federal statutory tax rate primarily due to tax credits and state income taxes.

     In the first quarter of 1999, the Company adopted Statement of Position 98-5, “Reporting on the Costs of Start-Up Activities” (SOP 98-5). SOP 98-5 requires that the costs of start-up activities, including preoperating costs, be expensed as incurred and that previously unamortized preoperating costs be written off and treated as a cumulative effect of a change in accounting principle. As a result of adopting SOP 98-5, the Company recorded an after-tax charge of $595,000, or $.02 per common share, in the first quarter of 1999.

11

The Strategic Plan and Restructuring Program

In 1994, the Company adopted a strategic plan to accelerate the sales of its brand throughout the country (the Strategic Plan). The key elements of this plan are: 1) to build high-margin brands with leading market shares through effective consumer marketing activities, 2) to expand the Company’s direct-store-delivery distribution network to national scale and enhance this capability with sophisticated information and logistics systems and 3) to introduce innovative new products. The potential benefits of the Strategic Plan are increased market share and future earnings above those levels that would be attained in the absence of the Strategic Plan.

     In accordance with the Strategic Plan, the Company embarked on an aggressive national expansion. This expansion involved the entry into 34 new markets, which included the opening of a major manufacturing and distribution center in Texas, a significant increase in marketing spending and the introduction of several new products. At the same time, the Company invested in its soft-serve equipment manufacturing business, Grand Soft. The investments which were required to fund the brand-building actions and national expansion and to support the Grand Soft business substantially increased the Company’s cost structure.

     Beginning in late 1997 and continuing into 1998, the cost of dairy raw materials, the primary ingredient in ice cream, increased significantly. These costs peaked in 1998 at a rate more than double of that experienced in 1997. This increase reduced the Company’s 1998 gross profit by approximately $22,000,000 when compared with 1997. Aggressive discounting by the Company’s competitors made it difficult to raise prices by an amount sufficient to compensate for these higher dairy raw material costs. During this same period, sales volumes of the Company’s “better for you” products continued the significant decline that began in 1997, consistent with an industry-wide trend. Since these “better for you” products enjoy higher margins than the Company’s classic ice cream, the volume decline had a significant impact on the Company’s profitability in 1998. Finally, in August 1998, Ben & Jerry’s informed the Company of its intention to terminate its distribution agreement. Subsequent negotiations with Ben & Jerry’s revised the original contract terms to allow the Company to distribute Ben & Jerry’s products in a smaller geographic area. Starting September 1, 1999, this was estimated to reduce the Company’s distribution gross profit of Ben & Jerry’s products by approximately 54 percent. The Company estimates that the distribution gross profit in the markets where it stopped distributing Ben & Jerry’s products represented approximately six percent, or $13,000,000, of its gross profit in 1998.

     The above factors: the higher dairy raw material costs; the decline in “better for you” volumes; and the reduction in Ben & Jerry’s sales, has in the past, and may continue to have in the future, a negative effect on the Company’s gross profit and its ability to successfully implement the Strategic Plan. The Company, therefore, concluded that a thorough reassessment of its cost structure and strategy was necessary. This reassessment yielded restructuring actions designed to improve profitability and accelerate cost reductions by increasing focus on the core elements of the Strategic Plan. On October 16, 1998, the board of directors approved the restructuring actions.

     The Company intends to continue to pursue the benefits of the Strategic Plan through four long-term initiatives. These initiatives are as follows: 1) growth in share and sales in the premium ice cream business; 2) expansion of the Company’s new, higher-margin superpremium ice cream brands; 3) accelerated development of the Company’s business in a wider number of retail channels, especially mass-merchandisers, convenience stores, and foodservice outlets; and 4) a focus on improved productivity through a reduction in total delivered costs, meaning the per-unit costs of manufacturing, selling and distribution, and support activities.

     The Company continues to make progress towards the key elements of the Strategic Plan. This progress has yielded an increased market share in a consolidating industry. For example, the Company has had significant success in the superpremium segment in recent years with the introductions of Dreyer’s and Edy’s Dreamery™ Ice Cream, Whole Fruit Sorbet, Starbucks® Ice Cream, and Godiva® Ice Cream. In 2000, the Company signed a new agreement with Ben & Jerry’s to resume national distribution of its superpremium product line to the grocery channel in the Spring of 2001 and to work together with Ben & Jerry’s to expand the Company’s distribution of Ben & Jerry’s products in non-grocery channels. In the premium segment, the 2000 launch of the new co-branded M&M/Mars line has increased the Company’s presence in the premium category. These products are being manufactured and distributed by the Company under the terms of the joint venture agreement. The formation of this long-term partnership with M&M/Mars to market a new line of ice cream products featuring M&M/Mars’ leading candy brands is consistent with the Company’s strategy to expand its portfolio of brands and products to reach consumers across the entire ice cream category.

Revision of Ben & Jerry’s Distribution Agreement

During the third quarter of 1998, Ben & Jerry’s notified the Company of its intention to terminate the distribution agreement between the Company and Ben & Jerry’s. The Company subsequently entered into negotiations with Ben & Jerry’s to resolve issues associated with the pending termination. In the first quarter of 1999, the companies reached a resolution regarding these termination issues by amending the existing distribution agreement and entering into a new distribution agreement. The Company retained the rights to distribute Ben & Jerry’s products in all existing markets, except the New York metropolitan area (discussion follows in “1998 Restructuring Program and Other Actions” section of this Management’s Discussion and Analysis), and on terms and conditions different in some respects from those in place prior to the amendment. The Company stopped distributing Ben & Jerry’s products in New York on April 1, 1999. After August 1999, the Company continued to distribute Ben & Jerry’s in selected markets covering a smaller geographic area under the terms of the new distribution agreement. The Company received a reduced margin for distributing Ben & Jerry’s in selected markets in 1999, but was no longer prohibited from competing directly with Ben & Jerry’s in the superpremium ice cream category in all markets after August 1999. In addition to notifying the Company of its intention to terminate the distribution agreement above, Ben & Jerry’s notified the Company of its intention to terminate its separate distribution agreement with the Company’s independent distributor in Texas (discussion follows in the 1998 Restructuring Program and Other Actions of this Management’s Discussion and Analysis).

12

     The distribution gross profit on Ben & Jerry’s products contributed just over 11 percent of the Company’s gross profit in 1998. The Company estimates that the distribution margin received in the markets where the Company stopped distributing Ben & Jerry’s products in 1999 contributed approximately six percent, or $13,000,000, of its total gross profit in 1998.

New Ben & Jerry’s Distribution Agreement

On October 25, 2000, the Company announced that it signed a new, long-term distribution agreement with Ben & Jerry’s Homemade, Inc., now a Unilever subsidiary. Under this agreement, the Company became the distributor of Ben & Jerry’s products for the grocery channel in all of its company-operated markets across the country. The Company and Ben & Jerry’s are expanding the Company’s role as a Ben & Jerry’s distributor in other non-grocery channels, such as convenience stores. The agreement took effect on March 5, 2001, has a term of five years, and automatically renews for two additional five-year periods unless terminated by either party at the end of each five-year period.

1998 Restructuring Program and Other Actions

The implementation of the 1998 restructuring program and other actions resulted in a pre-tax charge to earnings of $59,114,000 in 1998. This included $10,590,000 recorded in the third quarter which related primarily to Ben & Jerry’s actions that occurred in September 1998 and to a severance program, which management had already begun in advance of board approval of the remainder of the restructuring program. The remaining charges totaling $48,524,000 were recorded in the fourth quarter of 1998.

     The five key elements of the restructuring program and other actions follow:

     (1)   In 1998, the Company decided to exit the equipment manufacturing business associated with its Grand Soft ice cream unit. The Grand Soft business consists of both ice cream sales and equipment manufacturing operations. The Company has remained in the profitable ice cream portion of this business, but has outsourced the unprofitable equipment manufacturing operations.

     In the fourth quarter of 1998, the Company recorded $8,696,000 in asset impairment charges and $2,258,000 in estimated closing costs associated with the outsourcing from this business. The $8,696,000 charge is included in impairment of long-lived assets in the 1998 Consolidated Statement of Operations and is comprised of $5,714,000 of goodwill, $1,956,000 of property, plant and equipment and $1,026,000 of inventory and other assets. The remaining assets of Grand Soft totaled $1,762,000 at December 26, 1998 and consisted primarily of trade accounts receivable, which were fully recoverable. The assets were written down to net realizable value based on an estimate of what an independent third party would pay for the assets of the business.

     The charge of $2,258,000 for closing costs is included in the provision for restructuring charges in the 1998 Consolidated Statement of Operations and a $2,258,000 liability was included in accounts payable and accrued liabilities in the 1998 Consolidated Balance Sheet, as no closing costs were paid in 1998. The closing costs were based on estimates of legal fees, employee separation payments and expected settlements. The closing costs estimate included $576,000 of severance-related costs for the 23 employees, from all areas of responsibility, who were notified of their pending terminations prior to December 26, 1998. During 1999, the Company paid $811,000 of closing costs.

     During 1999, an analysis of purchase offers received on the Grand Soft equipment manufacturing business concluded that an outright sale was not economically feasible. As an alternative, the Company’s Grand Soft unit outsourced its equipment production to an independent sub-manufacturer. As a result, the Company completed the outsourcing of the equipment manufacturing business at a cost less than originally estimated and recorded a $1,315,000 reversal of the excess restructuring accrual in the 1999 Consolidated Statement of Operations. The accrued liability of $132,000 in severance-related costs at December 25, 1999