Since its founding in 1978, Ben & Jerry’s has been known for its advocacy on a wide range of social causes, including homelessness, fair trade and GMO-free products. When it was sold to Unilever in 2000, the news sent “shudders and shivers through the socially responsible business community”. The company had been successful, at least in part, by being perceived as an authentic brand, meaning its marketing and messaging aligned with the reality of its products, values and actions.
An authentic brand is transparent, consistent and genuine in its communication and behaviour, which helps build trust and loyalty. The association with Unilever almost certainly damaged Ben & Jerry’s standing with some customers. All the same, the company retained its independent board and was able to continue its social advocacy as part of the deal, so there was still some hope that its core values wouldn’t change.
After a rocky start, in which it arguably lost its identity within Unilever to a fair extent, Ben & Jerry’s did a decent job of retaining its independence within the corporate structure and still selling lots of ice-cream. In 2012 it was certified as a benefit-corporation or B Corps, meaning it was seen as being one of the most sustainable, socially conscious and transparent companies in the world.
But in recent years, there have been mounting tensions with Unilever. In 2022, Ben & Jerry’s sued its parent for selling the ice-cream business in Israel to a local licensee. Ben & Jerry’s argued that this violated Unilever’s pledge to end sales of its products in the West Bank and East Jerusalem in 2021 as a show of support for the Palestinian cause.
Unilever announced later that year that the dispute had been resolved, though Ben & Jerry’s has continued to make life difficult for its owner in Israel, calling for a ceasefire in Gaza in recent months.
Now their unusual 24-year arrangement is coming to an end after Unilever announced it will be selling its ice-cream business, also including big brands like Magnum and Wall’s. The business as a whole has been struggling with flat sales and falling margins as a result of the recent inflation surge. The group is also cutting 7,500 jobs across the organisation to make “a simpler, more focused and higher performing Unilever”.
Social purpose and big business
Ben and Jerry’s is not the only company that has been taken over by a large corporation which challenged its brand authenticity. The Body Shop, perhaps the world’s most famous social purpose company, has been bought and sold multiple times, and became what has been fairly described as a “respectable and normal commercial player”. Seventeen years after it was originally sold by founder Anita Roddick, the retailer is currently being dismembered.
Numerous craft breweries have also struggled with their authenticity after buyouts, the most famous being London-based Beavertown. It sold a minority stake to Heineken in 2018, before being fully taken over in 2022. Various leading supporters of independent brewing expressed disappointment, with one retailer saying, “Heineken does not have the health of the UK independent beer scene at heart,” and refusing to stock Beavertown products.
Beavertown’s sales actually rose 10% during 2022 as a whole, though time will tell if it can continue to thrive as part of a big corporation. A company’s brand authenticity can often be eroded from this kind of arrangement. It can lead to sales becoming lacklustre and brands ultimately being sold on.
In the case of Ben & Jerry’s, there’s no suggestion that the divestment is especially related to activism, though it does come fairly soon after the arrival of a new chief executive, Hein Schumacher. He said he would tone down Unilever’s overall emphasis on social purpose after pressure from shareholders (while pointing to Ben & Jerry’s as an exception).
The clash between profit and values was recently highlighted as one leading investor, Terry Smith of investment firm Fundsmith, was quoted in the FT as saying: “The group had become obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business … The Ben & Jerry’s row was the most obvious manifestation of this.”
Lessons to learn
Acquiring a brand with strong environmental and social values clearly comes with challenges. Integrating a culture of genuine brand activism requires a full alignment of values between the parent company and the acquired brand. Multinationals often struggle with this and brand authenticity is the ultimate casualty.
In such situations, it’s sometimes incumbent on the social purpose brand to fight back. Howies, a clothing company in Wales, sold to The Timberland Company in 2006. It described itself as being “a tiny part of a US$2 billion company and that was not easy”. When Timberland was in turn sold to US clothing group VF, Howies was able to take back to control, completing a management buyout in 2012 that allowed it to become “focused on sustainability issues again”.
The effect of this journey on Howies’ brand authenticity is hard to say. However, it is still going and its mission is “to improve how clothing is manufactured by pushing for more sustainable practices in an industry renowned for damaging the environment”.
We’ll have to wait and see whether Ben & Jerry’s will be able to concentrate on being “Berry Revolutionary”, like one of its ice-cream flavours. It will only be a small part of a bigger business, which is either likely to be listed on the stock exchange or sold to a private equity firm, so it could prove challenging.
This article originally said that Ben & Jerry’s became a B Corp in 1988. This should in fact have said 2012 and has now been corrected.