Corporate fudge too?
Many years ago – many, many years ago it seems now – in that sunlit world where Ronald Reagan was President and Margaret Thatcher was Prime Minister, my spouse and I were on holiday in Vermont, New England – our first time in what did seem a newer and improved version of old England – when we saw a roadside billboard announcing ‘Ice Cream Factory Tours’ and a sign pointing up the hill to the right.
Up we went, of course. There was a dairy farm, some happy-looking Holstein cows grazing in the fields, a new factory unit, a big shop, and a couple of cars in the car park. The tour was free, conducted with that enormous enthusiasm that only young USAmericans can show for the business they’re promoting. It was the best tour of any kind I’ve ever had, even more gratefully received because we didn’t have to pay for it. We showed our gratitude in the gift shop, purchasing a mug, a recipe book, and a baseball cap. And then we paid our rightful dues once again in the ice cream parlour, ordering Cherry Garcia, Chunky Monkey, Chocolate Almond, among other delights: our ice-cream intake that day is too appalling to contemplate even at this distance, some 35 years later. However, readers who are ice cream aficionados will already have worked out where we were. Yes, it was the Ben and Jerry’s factory at Waterbury, Vermont.
Ben and Jerry were there, running this happiest of all businesses. They had moved only a couple of years before from the repurposed roadside gas station where they began making and selling cream dreams. It was obvious already that they were going to far outgrow the confines of the Lake Champlain valley and take over as New England’s leading ice cream supplier. It was not just the product, but the enthusiasm, the amateurish hippy underpinning, the jokey approach, the lack of stuffy corporatism, the general coolness (in both the metaphorical and literal senses) of what they were doing. When I got back to England, I wrote to them suggesting that if they ever wanted to franchise this nirvana of icy happiness out to Old England, I would love to take it on. I received a very funny reply from Ben saying that they thought this move was still a year or two ahead.
A few years later I met a journalist who also loved ice cream, had done the factory tour, had (swoon) met Ben, and told me that they were already big in New York. Amazing! But his story had an edge of unpleasant cynicism: he said that these laid-back hippies were in fact extraordinarily ambitious, stop-at-nothing capitalists who were fighting a vicious legal battle against the market leader, Haagen-Dazs. “Don’t be fooled”, he said, “they may look like hippies, but they’re out to get rich”.
Little did we know then, but he was right. Today Ben and Jerry’s rules the world of premium ice cream, and both New and Old England are mere side shows to this frozen giant, whose product is sold everywhere from Waitrose supermarkets to opera houses to the state of Israel. Ben and Jerry’s, yes, though without much Ben and Jerry nowadays. They sold the business in 2000 to Unilever, not then or now noted as a fun, eccentric home for loveable little businesses. The founders’ version of the story is that they were forced to sell the business when they received offers which they had to accept for legal (though unspecified at the time or since) reasons. They remained however sitting on a sort of supra-advisory board in order to keep the jokes flowing (there were always lots of jokes) and to keep the company’s social responsibility role (the ice-creamer was trendily leftish and a sponsor of worthy projects for the underprivileged and unfortunate) in Unilever’s mind.
Which brings us back to Israel. Ben and Jerry’s owns a major production plant in Israel, from which it supplies the Middle East. One of the causes which the founders (generally strong supporters of the state of Israel) have taken up is that of Palestine, and the treatment of Palestinian people by the Israeli government. When a campaigning group announced a boycott of Ben and Jerry’s (the ice cream, not the flesh-and-blood pair), this was enthusiastically supported by Ben and Jerry (the flesh-and-blood pair, not the ice cream maker). Perhaps not surprisingly, this has caused confusion at Unilever, itself recently criticised for its ‘woke’ political stances. Things got worse when the Israeli foreign minister accused the company and its founders of anti-semitism, and investigations were opened in Florida and several other US states into whether the company was breaching anti-boycott laws (and, boy oh boy, no ice-cream maker wants to be stopped from selling ice-cream in Florida!).
All this brought to a head a certain amount of tension between Unilever and its subsidiary, where the founders continue to sit, immovably, on its advisory board. Politics is politics, but business is business, and when Ben and Jerry got arrested on an anti-Trump demonstration in 2016 the Unilever shareholders raised their corporate eyebrows at the damage this might do to Chocolate Fudge Brownie sales among Republicans. And when Ben became chairman of Bernie Sanders’ presidential nomination campaign in 2020, the finance men feared that even some Democrats might stop buying Cookie Dough. However, under the original purchase agreement, Unilever had obtained only limited control over certain policy decisions – especially limiting the parent’s ability to veto charitable donations, of which the two founders have made great and broad use.
This may all seem like a whipped ice storm in a medium cup, but it is highly indicative of the trouble that a ‘woke’ company, which is trying to do the right thing, or – on a more cynical view – trying to maximise sales by appealing to what it thinks are the political or social leanings of the majority of its customers, can get into. Unilever has become a focus of investor discontent in recent years because it has tried just a little too hard to play the woke-green-environmentally-sensitive agenda, emphasising the social mission of its business (a “mission to do good”, as the company puts it) at the expense of the bottom line. After all, when your core brands include shampoo, mayonnaise and lavatory cleaner, it’s perhaps not wise to overplay the ‘do-gooding’ line.
In 2021 Unilever made a £50bn takeover bid for the pharmaceutical company GSK (better known as Glaxo Smith Kline). The bid was strongly opposed by GSK, by some of Unilever’s own investors, and by many financial analysts, who suggested that Unilever was failing to maximise the profits of its own brands, not least because of its urge to be politically correct. This suddenly reversed the game; Unilever itself became a prospective target for corporate raiders who could see the potential of working its businesses much harder. How that will turn out still remains to be seen, but it is interesting that Unilever has begun shoring up its defences by selling under-performing (or maybe just pain-in-the-butt) brands. And the first on the auction block is… Ben and Jerry’s.
This stands as a clear warning that the real mission of any business is to sell its products as well as it can and pass the profits on to the shareholders. Get into social controversy and who knows where it will end? Some causes – such as improving education, housing the homeless and fighting disease – are of course beyond criticism; though even there it helps to keep away from controversial, or even too specific, solutions. Most businesses are currently announcing withdrawal from their Russian activities, and it’s hard to imagine that this will do anything other than put them in a wholly positive light in the eyes of the vast majority of their customers. Some companies, however, especially those dependent on Russian raw materials, will need to pull off some very tricky manoeuvres as they try to continue running their business. Mixing politics with corporate activities can often lead to some awkward conundrums.
We now live in an age in which big business and politics are becoming increasingly intertwined. So some companies are likely to be faced with unusual perils, ones they may not at first notice as the corporate agenda becomes increasingly fashionable and cuddly. But cuddling can quickly turn to biting, and fashion may suddenly take giant steps in another direction. What was correct becomes unacceptable, the Millennial becomes the Boomer. Maybe it’s best to keep out of all this stuff and stick to making things.
So what about Ben and Jerry? Well, one of their early converts still has that recipe book he bought all those years ago. Upset me too seriously, boys, and I’ll just make my own.