The lack of money was limiting Bingham's options, and marketing issues compounded the challenge. In the early years, CPI had made a terrific product that was pulled into the marketplace by abundant and favorable publicity. But those days were over. Bingham was convinced that now CPI needed to spend money building a sales channel, not to mention upgrading the plant and the equipment. "This was a classic case of a small company underestimating the cost of getting the product to market," he says.
To survive, CPI needed to partner its modest manufacturing capability with larger companies that could wield market clout in the rough-and-tumble food industry. "I wrote memo after memo on various strategies," Bingham asserts. "We needed to piggyback on people who had distribution capability." He proposed that CPI become a division of Ben & Jerry's and use the company to manage relationships with Ben & Jerry's copackers. He proposed a line of candy bars based on various Ben & Jerry's flavors. he talked to the large candy makers about manufacturing Rainforest Crunch for candy bars they would create around the brand. He proposed developing other ingredients for Ben & Jerry's in concert with other producers.
But to get much of that done, Bingham needed the blessing and cooperation of Cohen and Ben & Jerry's. And his proposals were often met with indifference and inaction.
Exasperated by the nonresponse to his initiatives, Bingham decided to resign in September 1994, just 15 months after he had arrived at CPI. After several unsuccessful attempts to reach Cohen by phone, Bingham says he finally resorted to sending his letter of resignation via registered mail.
He wasn't the only one leaving. On November 29, 1994, Cohen visited the plant to introduce Bingham's successor, Mark Sherman, to the company. It was the first time Deutsch had seen Cohen at the company since July 1993. That day, Deutsch says, Cohen took him aside and told him what a great job he was doing. Recalls Deutsch, "He told me, 'Irv, we've got to spend some quality time together." Cohen denies having made the remark.
Four days later, Deutsch was fired. He has since sued CPI and Cohen for $266,000, claiming wrongful termination, breach of contract, and defamation.
'Incredibly Successful'
Ben Cohen is still very much on the job at Ben & Jerry's corporate headquarters. During a recent interview, as sunshine poured through the window behind him, Cohen appeared relaxed in a T-shirt, canvas shorts, and Teva sandals. He seemed secure and content in his lofty perch at Ben & Jerry's, where business is in an upswing. At that time, he and Greenfield were about to head off to Paris to promote the company's recent entry into the French market.
In contrast, CPI fared poorly in 1995 and 1996 under new president Sherman. In those two years it ran a cumulative loss of $614,000, and the company filed for Chapter 11 bankruptcy on April 28, 1997.
Tilting back in his desk chair, Cohen said CPI's problems had nothing to do with its generous donations policy. Rather, he blamed "various management problems." he said that Deutsch and Broad never got along, which produced a conflict he could not reconcile. His solution was to back away and hire Bingham, who , in turn, was full of ambitious but hard-to-implement plans. "Warren's plans were on a grander scale than was warranted," he noted.
Cohen said he resisted putting more money into the company because he believed it would not have been wisely spent. Moreover, he claimed the company was profitable and, by his reckoning, "incredibly successful."
But one person's success is another's failure. CPI gave away more than half a million dollars and as a "cause marketer" was a brief, shining success. But then it imploded, dashing the hopes of others who served the company and came to rely on it. Linda Culpepper says the company had great potential. "This could have been a booming business," she says. "Imagine spending that kind of money and then just walking away. It's a case of total neglect. There's an awful lot of disappointment and resentment about this."
At its peak, CPI employed 60 people in Montpelier. What's left of the company was recently bought by the Rainforest Co., which has moved the assets to St. Louis. Of the 25 employees who remained when CPI's assets were sold at bankruptcy, only 2 chose to uproot themselves and work for the new owner in the Midwest.
In the last year of CPI's existence, its receivables ballooned from $200,000 to $500,000, which meant that the company effectively ran on the credit its vendors extended it. Dave Alexander, formerly of Cultural Survival and now of Global Organics, a supplier of nuts to CPI, is owed $81,000. "That's two years' worth of equity in my company that's gone," he says. "I was the victim of good PR. I believed Ben Cohen was a good guy, a socially and environmentally concerned capitalist. One reason I extended CPI credit was because I truly believed Ben would never let it go bankrupt."
But CPI has gone bankrupt, and court papers list just one secured creditor: Ben Cohen. His claim for $278,000 (excluding his $79,000 in unsecured claims) takes precedence over all others, and it should be satisfied in full, given the $465,000 that the Rainforest Co. paid for what was left of Community Products. Meanwhile, CPI has roughly 138 unsecured creditors who together are owed $476,000. Many of them, like Dave Alexander, were small vendors who believed in CPI's mission and stuck with the company to the bitter end. They'll be luck to see 25 cents on the dollar.
