Ben & Jerry's Fair Trade Fanfare Belies Struggle With Corporate Parent
Ten years ago, Ben Cohen and Jerry Greenfield sold their socially-conscious ice cream company to corporate giant Unilever – prompting criticism they'd sold out. Last week, the pair announced Ben & Jerry's Homemade will use only Fair Trade certified ingredients in all of its 58 flavors.
But behind the sweet victory for the legendary company builders, there is a cautionary tale for entrepreneurs thinking of selling to large corporations.
Ben and Jerry's switch to fully Fair Trade would have happened faster if the founders hadn't had to sell "risk averse" managers at Unilever on the idea, Greenfield told the Financial Times.
'It used to be that the test for anything that Ben & Jerry's was doing in the marketplace was that if other companies were doing it that was the wrong thing for us to do,' he said. 'As we got into larger and larger operations, we have got middle-level managers that are risk averse and the test becomes if other companies have not done something then we are not going to do it either.'
The effort will involve converting to Fair Trade ingredients for 121 different chunks and swirls and 11 ingredients including cocoa, banana, vanilla, fruits and nuts. The switch will happen in Europe by 2011, and in the U.S. by 2013. (The company also avoids milk from cows who have been injected with the growth hormone rBGH, and will convert to certified humane cage-free farm eggs by the end of 2010.)
Managers in the U.S. were particularly resistant to going fully Fair Trade because the certification, which also comes with a promise for the producers of ingredients to get a fairer share of the profits, isn't as widely-recognized (and rewarded) as it is in the rest of the world. Less than a third of U.S. shoppers understand the term, according to TransFair USA, the nonprofit group that certifies ingredients as Fair Trade. That's compared to 50 percent of consumers worldwide, according to the group's recent poll. And of the third who know the term, some 16 percent don't see the certification as credible, according to an analysis by Boston-based cause-related marketing firm Cone cited in Marketing Daily.
'In the U.S., the upper-level management were not comfortable with taking a leadership position,' Greenfield said.
Looking back at the long, strange history of Ben & Jerry's, Cohen and Greenfield said their first choice would have been to stay independent, but they couldn't stop Unilever from buying the company because its shares were already publicly traded.
'We failed at that,' Cohen said.
They can try to push their agenda from within Unilever, of course, but with varying degrees of success.
'Ben and I now work in the company but we have no real responsibility and we have no authority,' Greenfield said. Added Cohen: "We've been working with our corporate parent to get them to see the light on this issue."
The company -- an Inc. 500 alumnus -- first d ipped into Fair Trade in 2005. Observers predict the pioneering ice-cream brand's move will scoop more consumers into the still-fuzzy Fair Trade fold. Some experts say the ice-cream maker's move will force other brands to follow.
"It's the first 100 percent commitment from such a mainstream brand," said TransFair USA spokeswoman Stacy Geagan Wagner. (Green & Black, Cadbury's niche organic chocolate brand, promised a complete conversion to Fair Trade last month.) "I see it as the rise of the social consumer. We have the ability to choose product A, which tastes great, or Product B, which also tastes great, but doesn't exploit anybody."
Greenfield said in a statement: 'Fair Trade is about making sure people get their fair share of the pie. The whole concept of Fair Trade goes to the heart of our values and sense of right and wrong. Nobody wants to buy something that was made by exploiting somebody else.'
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.