Business Profiles FS/Ben & Jerry's
Ben & Jerry’s
Ben & Jerry’s is an ice cream company based out of Burlington, Vermont. It was started by two childhood friends (Ben Cohen and Jerry Greenfield) in 1978 in a renovated gas station. Over the next several decades, Ben & Jerry’s would continue to grow as the popularity of the ice cream spread. Initially, Ben & Jerry's operated as a normal business without any of it's trade mark social missions. However, with the growth of the company came a set of values dedicated to environmental sustainability and socially responsible practices; all the while maintaining a quality product and a growing business. Cohen once described the business as “an experiment to see if it was possible to use the tools of business to repair society”. Ben & Jerry's commitment to supporting the local community led to a series of initiatives including refusing to use VC funds preferring to sell stock to Vermont residents and donating 7.5% of profits. In fact, Ben & Jerry's never had a tradition IPO instead choosing to sell stock door to door at $126 a share. In 1995, Ben & Jerry's began an era of CEO turn over beginning with the departure of Fred "Chico" Lager. He was followed by Robert Holland Jr who left after 20 months due to "philosophical differences" and was replaced by Perry Odak.
Despite the lofty, social, mission, by the mid 90's Ben & Jerry's was lagging in profitability. After throwing off an attempt by Dryers in 1998 to buy the company and another attempt by a group of investors to take the company private, Unilever offered to by the company for $43.60 a share. In 2000, Ben & Jerry’s became a wholly-owned subsidiary of Unilever with heavy shareholder support. Under this arrangement the company is governed by a Board of Directors (B.O.D). Though Cohen and Greenfield remained on the new B.O.D, it was Yves Couette who became the new CEO. In 2010, Jostein Solheim, a Unilever executive from Norway, became the new CEO of the company and was quoted as saying "The world needs dramatic change to address the social and environmental challenges we are facing. Values led businesses can play a critical role in driving that positive change. We need to lead by example, and prove to the world that this is the best way to run a business. Historically, this company has been and must continue to be a pioneer to continually challenge how business can be a force for good and address inequities inherent in global business." Despite being a part on Unilever, Ben & Jerry’s continues to maintain its value system and is still a certified B Corp (the first wholly-owned subsidiary to be recognized as such). Additionally, Ben & Jerry’s makes no effort to hide their affiliation with Unilever, mentioning it many times throughout its website. It seems that Unilever is perfectly happy allowing Ben & Jerry’s to essentially continue to run itself even when its values actually contradict the actions of Unilever. Ben & Jerry’s strongly opposes the use of bovine growth hormone and supports the GMO labeling movement; both of which are actually used by Unilever.
By keeping the hippie feel and the B Corp status, Ben & Jerry’s provides a successful example of retaining the original character and values of a company while expanding a business. If anything, becoming part of Unilever provides an example of how to do so for future companies seeking a similar model. On the flip side of the coin, Ben & Jerry's autonomy was only as strong as its financial state. As profits went down, it became harder to resist a takeover.
Competitors: Haagen Dazs/ Pillsbury: In 1994, Haagen Dazs tried to limit Ben & Jerry’s distribution in Boston which led Ben & Jerry’s to sue Pillsbury (Haagen Dazs’ parent company). The suit prompted the “What’s the Doughboy Afraid Of?” campaign.