How the Social Mission of Ben &
Jerry’s Survived Being Gobbled Up
AUG. 21, 2015
Photo
Rob Michalak has worked for Ben & Jerry’s on and off for 26 years and is now director
of social mission. He says that the company is having a bigger impact than before
because of its increased size. CreditDavid Gelles/The New York Times
Revalued
By DAVID GELLES
Big food companies have an endless appetite for smaller brands that
make local, organic and socially responsible products. Over the years,
Danone acquired Stonyfield Farm yogurt, General Mills bought
Annie’s Homegrown and Campbell Soup swallowed up Plum
Organics.
Each time such a deal is announced, fans of the target company ask
whether its cherished products will be safe under the new owner, or
if the integrity will disappear in the belly of the beast.
There is reason for concern. Starbucks acquired La Boulange, a San
Francisco bakery chain that made healthful organic breads, in 2012.
This year Starbucks announced it was shutting down the bakeries but
keeping the brand name alive.
And before it became a case study on how such marriages can
succeed,Unilever’s takeover of Ben & Jerry’s got off to a rocky start.
Ben Cohen and Jerry Greenfield founded their gourmet ice creamery
in 1978 and were pushing the boundaries of conventional business
from the beginning.
Shortly after setting up shop in Burlington, they offered stock to
Vermont residents only, hoping “to spread the wealth” in their
community. After a national stock offering in 1985, the company set
up a foundation and committed to funding it with 7.5 percent of the
company’s annual pretax profits.
Mr. Cohen and Mr. Greenfield then devised a three-part mission
statement: to make the world’s best ice cream, to run a financially
successful company and to “make the world a better place.”
Ben & Jerry’s went to great lengths to fulfill its mission, according to
Antony Page and Robert Katz, Indiana University law professors who
wrote a paper on the Unilever acquisition. The company sourced
from regional organic dairy farms. It used only milk that did not
contain artificial growth hormones. It went to court for the right to
label its ice cream hormone-free. It developed chemical-free
containers. It made fair-trade and organic ingredients priorities. And
it reduced its garbage output.
When Unilever, the Anglo-Dutch consumer goods conglomerate,
offered to buy the company in 2000 for a rich 25 percent premium,
neither Mr. Cohen nor Mr. Greenfield wanted to sell. They worried
that Unilever would abandon the progressive aspects of the business
and run it as a soulless subsidiary.
But as a public corporation, Ben & Jerry’s had a fiduciary duty to its
shareholders. After much hand-wringing, it agreed to a deal with
Unileverfor $326 million. And despite handsome paydays — Mr.
Cohen’s stake was reportedly worth about $40 million, while Mr.
Greenfield’s was worth about $10 million — the founders said in a
statement that they would have preferred to remain independent.
Very quickly, some of their worst fears were realized.
Ben & Jerry’s had almost never fired an employee, but Unilever, the
world’s largest ice cream maker, had manufacturing and supplychain acumen and wanted synergies. A production plant and a
distribution center were shuttered, workers at the two sites were laid
off, and sales representatives at headquarters were fired.
“There were redundancies and consolidation,” said Rob Michalak,
who has worked for Ben & Jerry’s on and off for 26 years and is now
director of social mission. (He met Mr. Greenfield while hitchhiking
in 1978.) “That created unease and suspicion.”
Then, shortly after the deal, in an affront to the company’s political
sensibilities, Unilever reportedly prevented employees from
emblazoning the Ben & Jerry’s logo on a bus driving them to a
protest.
Kevin Havelock, president of refreshments at Unilever, likened the
takeover to a new marriage. “There was a lot of learning that had to
take place,” he said. “Where there have been challenges, we’ve talked
them through.”
But today, 15 years after the deal, Mr. Michalak said Ben & Jerry’s
remained as mission-driven as ever, and was having a bigger impact
than before because of its increased size. (Since the acquisition,
Unilever has nearly tripled Ben & Jerry’s revenue and added
hundreds of jobs.) And instead of watching Ben & Jerry’s simply
disappear into Unilever, Mr. Michalak and his colleagues have
pushed their new parent company to become a more progressive
multinational.
The recipe for this amicable partnership was written into the
acquisition agreement. Unilever, not wanting to squander its
purchase, chose to operate Ben & Jerry’s with more autonomy than
any of its other subsidiaries. To ensure middle managers did not
contaminate the unique culture, Unilever established an “external
board” charged with overseeing Ben & Jerry’s culture and social
mission.
That board, initially comprising five longtime Ben & Jerry’s
supporters, including Mr. Cohen and Mr. Greenfield, has the
authority to set aggressive new social impact targets and to push
back against Unilever.
The external board still exists. According to the legally binding
merger agreement, the board does not report to any authority other
than itself, nominates its own members, has the right to sue Unilever
and will exist in perpetuity. (Mr. Cohen and Mr. Greenfield, who are
no longer on the board, declined to comment for this column.)
Even with the external board in place, a question remained: How
many of Ben & Jerry’s ambitious initiatives could a multinational like
Unilever reasonably be expected to support?
The answer, it turned out, was most of them. After the initial layoffs,
Unilever largely gave Ben & Jerry’s the autonomy to pursue its own
agenda, so long as the ice cream kept flowing.
When Mr. Michalak took over the social mission in 2006, he worked
with the external board to redouble commitments to local farmers,
press for national labeling of genetically modified organisms and set
even more ambitious goals for reducing energy consumption and
waste.
The company now offers its lowest-paid workers more than twice the
national minimum wage. According to its website, it uses only cagefree eggs. And recently, Ben & Jerry’s became a B Corporation, a
voluntary certification by a nonprofit group called B Lab designating
companies that uphold high social and environmental standards.
Mr. Havelock said Unilever had been inspired by Ben & Jerry’s
ambitious social and environmental goals. Unilever has even thought
about what it would take to become a B Corporation — a radical
consideration for one of the biggest companies in the world — but
believes that it’s unfeasible right now.
Protesters occasionally still descend on Ben & Jerry’s. Recently, 120
activists marched outside the flagship store in Burlington demanding
better conditions for migrant workers on suppliers’ dairy farms.
But over all, Ben & Jerry’s is proceeding with its activism-infused
capitalism, one pint of Chunky Monkey at a time. Indeed, Ben &
Jerry’s has even rediscovered its political spirit.
The company supports marriage equality and campaign finance
reform. And it recently introduced a flavor, Save Our Swirled,
intended to raise awareness about climate change. The label is
illustrated with cows perched atop melting icebergs, and Ben &
Jerry’s is urging customers to lobby government leaders to embrace
clean-energy standards.
“Even before Unilever, the company was always going to the
uncomfortable edges of advocacy and activism,” Mr. Michalak said.
“We are doing more now on the social mission than we ever have in
the company’s history.”
A version of this article appears in print on August 23, 2015, on page BU3 of the New
York edition with the headline: Gobbled Up, but Still Doing Good for the World. Order
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