Activism as Brand Identity: Part of Ben & Jerry’s Flavor and a Lesson for Other Mission-Driven Companies

How the Company Sells $1 Billion of Ice Cream and Infuses Brand Activism Into Its Supply Chain Strategy Under Unilever Ownership

Ben Cohen at Democracy Awakening Rally

Ben & Jerry’s co-founders, Jerry Greenfield and Ben Cohen, built activism into their eponymous ice cream brand from its beginnings in 1978. Here, Cohen is one of a reported 300 protesters arrested at an April 2016 Democracy Awakening demonstration in Washington, D.C., on voting rights and getting money out of politics.
Photo by Democracy Awakening

Ben & Jerry’s board member Jeff Furman takes pride in the fact that the company actively and publicly campaigns for social causes. On the board since 1982, Furman extols the company’s brand activism in its support for voting rights and anti-racism campaigns in the United States, efforts to promote the integration and inclusion of refugees in Europe, and the fight for greater income equality worldwide.

Obviously, the ice cream company doesn’t choose the simplest problems to address. “We are moving into huge, difficult issues now,” he says.
And that makes work both more challenging and more meaningful for the company’s employees.

As director of values-led sourcing for Ben & Jerry’s, Cheryl Pinto jokes that she spends at least half her time with suppliers, half developing new supplier relationships, and half collaborating with other activists to improve the lives of producers and farmers in the company’s supply chain. The work is too compelling for her to slow down, she says.

“We have to create ripple effects and help our values-aligned partners get much bigger, because the problems we’re attacking are so vast,” Pinto says.

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Ben Cohen and Jerry Greenfield founded the company in 1978 as a tiny ice cream parlor in Burlington, Vermont. The mission-driven company now has 477 employees in Vermont, and factories in Las Vegas, Ontario and the Netherlands. Ben & Jerry’s sells about $1 billion worth of ice cream each year across 35 countries. Its sole shareholder is Dutch multinational Unilever, the world’s 147th-largest corporation with nearly $60 billion in sales.

Ben & Jerry’s is also a leading evangelist for the movement to give capitalism a conscience. The company adopted a triple mission in 1988 to produce the best natural ice cream, earn a decent financial return and make a difference in society, fostering a “linked prosperity” for the business and those connected to it.

“When the whole company is values-aligned, corporate activism really works,” Ben & Jerry’s CEO Jostein Solheim says. “The people who believe what we believe are extremely loyal to our business, and they buy a lot of ice cream.”

Failing Forward: Brand Activism Leads to Benefit Corporation Status

The Ben & Jerry’s founders didn’t intend to become wealthy businessmen. They wanted to have fun, earn a living and make the world a better place.

Then the business became a success, expanded quickly, and needed more capital and better distribution to manage its continued growth efficiently. The board of directors struggled for a year and a half to find a way to continue as an independent company, but none of the other options worked. In 2000, the board approved a complex, in many ways unprecedented, deal with Unilever aimed at preserving the three-part mission.

While Cohen and Greenfield might have chosen a different buyer or a different future for their company, legal precedents meant to protect the financial interests of Ben & Jerry’s shareholders during takeovers forced them to take the highest offer, and that was Unilever’s.

Jostein Solheim

Photo courtesy Ben & Jerry’s

One provision in the sale agreement requires that spending on the company’s social mission grow faster than overall sales. Another created a board of directors independent of Unilever to act as a watchdog for the mission and the brand. The board has the right to appoint new members without Unilever’s approval and can enforce the terms of the sale agreement, in court if necessary.

In spite of the unusual agreement, Unilever’s ownership soon began to erode Ben & Jerry’s social mission. Cohen and Greenfield were so disillusioned they left the board soon after the sale and minimized contact with their namesake company for nearly a decade. It took almost 10 years of strategic missteps and organizational turbulence before Ben & Jerry’s could reclaim its momentum and its identity.

Ice Cream Social Book

The lessons and struggles of Ben & Jerry’s sale and relationship with Unilever are documented in Brad Edmondson’s book, “Ice Cream Social,” available at icecreamsocialbook.com.

About the time of the Ben & Jerry’s sale, Jay Coen Gilbert was a young entrepreneur with his own growing consumer-products company — a basketball footwear and apparel company called AND 1. As Coen Gilbert and his partners evaluated strategic options, the Ben & Jerry’s story was both a cautionary tale and a source of inspiration for him.

“Ben & Jerry’s was sold because the laws forced the board to focus only on the price being offered, even though the nonfinancial aspects of the company were more important to them,” Coen Gilbert says. “The anger and trauma that resulted from that sale really got me thinking.”

 

A year after the sale of AND 1 in 2005, Coen Gilbert joined with two college buddies — his business partner Bart Houlahan and former Wall Street (and AND 1) investor Andrew Kassoy — to invent two institutions inspired by the Ben & Jerry’s story. Their new nonprofit B Lab was established to certify companies as B Corporations based on a detailed assessment of their effect on people, communities and the environment. The nonprofit also created a legal entity, the benefit corporation, that allows operators to change corporate bylaws to accommodate broader missions that can include social justice, community development, and protection of the environment — the things companies like Ben & Jerry’s care the most about.

Managers of a benefit corporation could accept an offer to sell for less money if the buyer they choose is more likely to sustain a company’s social mission, although the premise has not been tested in court. Since its inception in 2010, the benefit corporation structure has been adopted in 31 states, and more than 4,000 companies are registered as benefit corporations.

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In 2011, the managers of Ben & Jerry’s applied to become a Certified B Corporation, officially certifying the following year. Both the Vermont company and its corporate parent recognized the value of the B Impact Assessment, which scores companies on how they affect people and the planet. The assessment gave them a new tool for tracking whether the company was fulfilling its mandate under the purchase agreement. The independent nonprofit B Lab also validates the results.

Jeff Furman

Photo by Zach Furman

With the help of the assessment, Unilever and Ben & Jerry’s found new clarity in their relationship and new tools for measuring and managing the company’s social mission.

Once both Unilever and Ben & Jerry’s “understood what we were required to do and how to measure it, the rest followed,” says Rob Michalak, Ben & Jerry’s global director of social mission. Michalak and his team added the B Impact Assessment to the company’s own complex system of measurements, which began in 2009.

When a Ben & Jerry’s goal is met — as when all of the company’s sugar was certified as fairly traded last year — the board sets a more challenging goal, such as paying all the workers who produce its sugar a living wage. Ben & Jerry’s publishes its social audit in a detailed annual Social and Environmental Assessment Report. The report describes dozens of initiatives — some new, others decades old — and they are measured every year.

Because of the company’s emphasis on metrics, suppliers who submit to a third-party audit of their social performance, like the B Impact Assessment, are more likely to land a Ben & Jerry’s contract. In 2015 in the United States, 27 percent of the ingredients that Ben & Jerry’s used to make chunks and swirls came from “values-led sources.” In Europe, 38 percent did.

One of those sources in the United States is Oregon Cherry Growers, the co-op that grows the fruit for Cherry Garcia ice cream. Oregon Cherry Growers always was a values-based company, according to Tim Ramsey, co-op president and CEO, but the impact of those values was never measured.

The B Corp certification process “was great for us, because we had been doing certain things for a long time without measuring them,” Ramsey says. The assessment “shows our employees that we are really doing the things we say we do,” he says. (Read more about Ramsey’s mission commitment.)

Oregon Cherry Growers Harvest

Harvesters pick cherries for Oregon Cherry Growers, a co-op that began using the B Impact Assessment to measure its impact as part of supplying fruit for Ben & Jerry’s Cherry Garcia ice cream flavor.
Photo by David Reamer/Oregon Cherry Growers Inc.

Beginning of a Larger Shift: Relying on the B Impact Assessment

Having found success with its first B Corporation acquisition, Unilever doubled down with its purchase of B Corp Seventh Generation in September 2016. Seventh Generation is a Vermont manufacturer of plant-based household cleaners and recycled paper products.

Possibly thanks to the precedent, John Replogle, Seventh Generation CEO, says that his company’s negotiation with Unilever took a third as long as Ben & Jerry’s. Like Ben & Jerry’s, Seventh Generation will maintain its own board of directors focused on its social mission. Solheim, the ice cream company’s CEO, is one of the members of that board.

Replogle says that with Unilever’s help, Seventh Generation should be able to expand rapidly in Europe and elsewhere to become a billion-dollar global brand like Ben & Jerry’s. “Unilever has committed to keeping us in Vermont and letting us run semi-independently,” he says. “They want us to succeed not just as a brand, but as a culture with a mission.”

John Replogle

Photo courtesy Seventh Generation

Seventh Generation’s announcement of its sale to Unilever stated the company will remain a B Corp. The biennial B Corp audit will provide accountability for managers, board members and Unilever.

The idea of social responsibility has become a public part of Unilever’s identity under the leadership of CEO Paul Polman, who joined the company in 2009. He launched the Unilever Sustainable Living Plan, which aims to improve the lives of 1 billion people by 2020, reduce environmental impact by 50 percent and double sales by 2030. Every year, Unilever publishes an audited report that details its progress.

Polman is 60, a factor Replogle says he considered when reviewing Unilever’s offer. “He told us that he is absolutely committed to identifying a successor who will preserve Unilever’s values,” Replogle says.

That’s important to Replogle because, unlike Ben & Jerry’s, Seventh Generation’s social mission board is not independent, is not guaranteed to exist in perpetuity and cannot take its parent company to court. If the next CEO of Unilever does not share Polman’s values, Seventh Generation’s social mission might slip to a lower rung on the priority list. But that is a risk Replogle says he is willing to take for the overall good of the company, its shareholders, employees, customers and community.

“I look forward to working with Seventh Generation as part of Unilever,” says Furman, Ben & Jerry’s board chair. “Our learning journey is continuous, and it must lead to activism. The struggle now is to make the roots deeper and firmer so we can be more effective. I know that we are much more likely to accomplish deep change if we create something that lives longer than we do.”

Sustainable Harvest coffee farmer

A farmer from the Huatusco cooperative in Veracruz, Mexico, harvests red, ripe coffee cherries for Sustainable Harvest, which imports the coffee for Ben & Jerry’s coffee ice cream flavors.

Photo by Clay Enos/Sustainable Harvest

Values-Led Supply Chain Strategy

Ben & Jerry’s has been a guiding force for its suppliers, but they provide inspiration in return. The following flavor sampling contains ingredients sourced from companies that explicitly share the ice cream company’s mission and activist roots.

Chocolate Chip Cookie Dough Ice CreamChocolate Chip Cookie Dough
Rhino Foods

“I wanted to go into business to change the way business is done,” says Ted Castle, the founder and president of Rhino Foods. “Ben & Jerry’s was an inspiration to me.” Since 1990, Rhino has made the chunks of cookie dough that go into the popular ice cream flavor.

Today, Castle’s 135 employees include many refugees and other people who live paycheck to paycheck. The firm’s “Income Advance Program” provides loans through a local credit union that prevent employees from resorting to predatory “payday lenders.” Rhino “shares” employees with neighboring businesses to avoid layoffs during slow times, and a United Way resource coordinator is on-site to help employees “bring their best selves to work.”

“It isn’t charity,” Castle says. “What our employees face at home has a huge impact on how well they do their jobs.”

Chocolate Fudge Brownie Ice CreamChocolate Fudge Brownie
Greyston Bakery

In 1983, a Buddhist study group in Yonkers, New York, started hiring people who were considered unemployable — including people who were homeless, in recovery or fresh out of jail — to work in its business, Greyston Bakery. The bakery, founded by Bernie Glassman, made fancy cakes and pastries to sell in New York City.

When Glassman met Ben & Jerry’s co-founder Ben Cohen in 1988, he agreed to provide brownies as ingredients for Ben & Jerry’s. Cohen later called the Greyston contract one of the smartest things the company ever did. But it wasn’t easy. The tiny bakery wasn’t equipped for such a large contract, and it almost went broke. A lot of dough ended up in the trash, literally and figuratively, until Greyston hired a CEO and built a modern food-manufacturing plant. Ben & Jerry’s board member Jeff Furman was assigned to help Greyston address its challenges.

Ben & Jerry’s still buys a tractor-trailer load of brownie pieces from Greyston Bakery three to four days a week. It’s been 27 years since their first contract, and Greyston now employs 100 people. “Their contract has allowed us to train and employ more than 3,500 people who otherwise would have spent the rest of their lives out of work,” says Mike Brady, Greyston’s president and CEO. “It’s an amazing model.”

Coffee Coffee BuzzBuzzBuzz Ice CreamCoffee, Coffee BuzzBuzzBuzz!
Sustainable Harvest

David Griswold, founder of Sustainable Harvest, has been selling coffee to Ben & Jerry’s since 1993. He calls Ben & Jerry’s “a guiding light.” When Griswold signed his first contract with Ben & Jerry’s, he represented a few farmer co-ops in Mexico. Griswold now imports beans from 18 countries and is an enthusiastic participant in the Producer Development Initiative, a collaboration among Ben & Jerry’s, Fairtrade International and several nonprofit organizations to monitor the treatment of coffee workers worldwide.

The Producer Development Initiative “strives to realize dignified livelihoods for the fair-trade farmers in our value chains,” says Cheryl Pinto, Ben & Jerry’s director of values-led sourcing. The initiative “focuses on strengthening farmer cooperatives, advancing living incomes for farmers and promoting climate resilience.”

This article was originally published in the Winter 2016/2017 issue of B Magazine.

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