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During a trip to Vermont seven years ago, I toured the Ben & Jerry’s factory, as you do if you don’t ski and are bored of leaves, and was pleased to see Jerry Greenfield still pottering among the ice cream machines.
The co-founder’s presence added to the illusion that this was an independent business, even though it had been sold to Unilever in 2000.
That illusion was carefully cultivated at the time of the takeover and has generally served both the ice cream maker and its parent company well for two decades — until now.
This week Ben & Jerry’s announced that selling ice cream in the occupied Palestinian territories was “inconsistent with our values” and that it would stop, an apparent protest against Israeli settlements.
The brand has a long history of bold policy stances but has never encountered such a ferocious response. Israeli prime minister Naftali Bennett warned Unilever of “severe consequences” including legal action. But it was the reaction outside Israel — Americans dumped tubs of ice cream and posted the pictures on social media — that poses the biggest threat.
If that were not enough, Unilever also faced a backlash from the independent Ben & Jerry’s board, whose chair complained that the press release had been watered down by the parent group, which was “trying to destroy the soul of the company”.
During takeovers, acquirers often issue vague assurances only to discard them later. For instance, Kraft’s pledge to keep open a Cadbury factory during its 2010 takeover bid for the chocolate maker was jettisoned soon after the deal closed.
But Unilever’s assurances were different. For founders wanting to preserve the spirit of their company even after selling out to a multinational, the merger agreement between Unilever and Ben & Jerry’s is still seen as a gold standard.
It ensured that Ben & Jerry’s would continue to have an independent board entrusted with “preserving and enhancing the objectives of the historical social mission of the company”.
The complaint from the board’s chair, Anuradha Mittal, to NBC News this week was that although the withdrawal policy belonged to Ben & Jerry’s, the statement had been written by Unilever and included a commitment to remain in Israel, which had not been blessed by the ice cream company’s board.
It is a sticky mess. Incapable of offering a coherent response, Unilever seems to be praying the backlash will not grow into a broader boycott of its products.
On previous occasions, Ben & Jerry’s edgier approach produced mutual benefits. The ice cream maker supported Black Lives Matter and joined a boycott of Facebook advertisers where Unilever acted later or not at all. The semi-autonomous Ben & Jerry’s could take the risk and reward; Unilever could avoid direct responsibility but enjoy the marketing boost.
Unilever chief executive Alan Jope said on Thursday that the withdrawal had been a decision “by Ben & Jerry’s and its independent board” that was “in line with the acquisition agreement that we signed 20 years ago”.
This distancing act is deeply disingenuous. Ben & Jerry’s independence is carefully limited in the merger agreement. Unilever’s former US boss Richard Goldstein gave the game away in Ice Cream Social, a history of the Vermont-based company.
“I felt that what we were giving him [Ben Cohen], in the end, didn’t matter much to Unilever,” Goldstein is quoted as saying. “We were getting the brand. We were getting the business. They would have their own board of directors, but we would control what I regard as the key factor in success or failure, which is the selection of the chief executive.”
Unilever capitalised on this soon after the deal closed when Ben & Jerry’s proposed a CEO shortlist and the parent company ignored it, imposing its own CEO. Over the years, Unilever-appointed CEOs have vetoed social activism proposed by Ben & Jerry’s staff including over the Iraq war and same-sex partnerships.
Current Ben & Jerry’s chief executive Matthew McCarthy seems more gung-ho than those predecessors. “One of the questions I get most often is, aren’t you afraid of alienating consumers by the stands that you take at Ben & Jerry’s? It’s the exact opposite,” McCarthy told The Wall Street Journal in May.
He may have miscalculated. Regardless, Unilever owns this latest policy and should either defend it or change it.
