Ice cream headache
Ben & Jerry’s controversial political stances are complicating its future as Unilever, its corporate owner, moves to divest its ice cream business
Ben & Jerry’s, the ice cream brand launched by a couple of Vermont hippies, generated big sales for its corporate owner, but also big public relations headaches with its controversial political stances. Now the question becomes: Who will have to deal with those headaches next? The future of the ice cream maker remains unclear after the British consumer goods conglomerate Unilever said Tuesday it would spin off its ice cream business, including Ben & Jerry’s, into a stand-alone company. The brand would arguably be the crown jewel of the new company, of which Unilever shareholders would own a stake, but some analysts expect Ben & Jerry’s to be sold separately to another buyer.
“Ben and Jerry’s is a hot potato,” said Carol Spieckerman, founder of Spieckerman Retail consulting firm. “It sounds like Unilever is prepping Ben & Jerry’s for a sale. I can’t imagine [the spun-off company] will hold onto it.”
That’s because Ben & Jerry’s, based in South Burlington, Vt., is no ordinary ice cream maker. Founded in 1978 by Ben Cohen and Jerry Greenfield, the company has become known as much for its politics as its quirky flavors. It has long fused progressive causes into its business model, whether climate change, racial equity, or abortion rights.
In 1988, Ben & Jerry’s became one of the first companies in the world to structure itself as a B Corporation, which legally requires it to produce profits and a “positive” benefit to society.
“We seek in all we do, at every level of our business, to advance human rights and dignity, support social and economic justice for historically marginalized communities, and protect and restore the Earth’s natural systems,” the company’s website says. “In other words: we use ice cream to change the world.”
When Unilever acquired Ben & Jerry’s for $328 million in 2000, the company agreed to preserve Ben & Jerry’s B Corp status. The ice cream maker also features an independent board of directors “empowered to protect and defend Ben & Jerry’s brand equity and
integrity,” the company says.
Board members include human rights experts Anuradha Mittal and Chivy Sok; Daryn Dodson, managing director of Illumen Capital, a Black-owned private equity firm; Jennifer Henderson, an advisor to progressive businesses; and Detavio Samuels, CEO of Revolt, a Blackowned media firm.
Ben & Jerry’s CEO Dave Stever and Unilever executive Constantina Tribou serve as the company’s representatives on the board.
Over the years, the unusual arrangement between Unilever and the ice cream maker seemed to work. In 2016, during an interview with the University of Pennsylvania’s Wharton School, then Ben & Jerry’s CEO Jostein Solheim was asked if the company ever avoided an issue because it was too controversial.
“There are many issues where we’ve had to say we can’t go there,” Solheim said, “not necessarily because they’re too hot or too controversial, more because we don’t judge that we have a real ability to make an impact, or that we are prepared. You know, we believe you’ve got to walk the walk — not just talk.”
But things came to a head in 2021 when Ben & Jerry’s refused to renew the license of Avi Zinger, an Israeli entrepreneur, because the company opposes Israeli settlements in the West Bank and East Jerusalem. International law deems the settlements illegal, but the Israeli government has maintained it has historical and religious rights to the land.
Critics called the decision antisemitic and several state pension funds pulled their investments from Unilever. The British firm ultimately overruled Ben & Jerry’s and renewed the license, prompting Ben & Jerry’s to sue its own parent company. The two sides settled the suit in 2022, an agreement that allowed Zinger to retain the license.
The episode weighed heavily on Unilever’s board. In its annual filing with the Securities and Exchange Commission, the company noted its board had to deal with “both new and ongoing geopolitical tensions and conflict [which] created unique challenges for Unilever in 2023. The Committee discussed matters ranging from the war in Ukraine, safety on tea plantations, and activism by Ben & Jerry’s.”
Unilever’s decision to spin off its ice cream business didn’t cite Ben & Jerry’s politics but Spieckerman said it clearly played a role. Since Hamas massacred an estimated 1,200 Israelis last October, prompting massive Israeli retaliation in the Gaza Strip, Israel has become even more of a controversial topic.
And with ingredient and transportation costs rising and premium ice cream sales declining because of inflation, Unilever decided it was a good time to separate itself, said Burt Flickinger, managing director of Strategic Resources Group, a consulting firm in New York.
The spinoff is part of a restructuring at Unilever that will slash 7,500 jobs, although it’s unclear how the cuts would affect Ben & Jerry’s. In a statement, Unilever said spinning off its ice business would “create a world-leading business, operating in a highly attractive category,” noting sales, including Ben & Jerry’s, totaled $8.6 billion in sales last year, or about 13 percent of the group’s total.
Unilever did not respond to a request for additional comment.
It’s also unclear how Ben & Jerry’s independent board structure, B Corp status, and political activism will impact investors’ appetite for such a spin off, especially during these charged, hyper-partisan times, Spieckerman said. Companies and institutions, ranging from Target to Harvard, have struggled to deal with backlashes over their positions on gay rights, free speech, and antisemitism.
In a statement, Ben & Jerry’s said it will stay true to its identity, no matter what Unilever decides to do.
“This represents a significant change for us,” the company said. “However, regardless of any new ownership structure, Ben & Jerry’s remains committed to advancing our mission and is well positioned to continue to grow our global company.”
One possibility, Flickinger said, is for founders Ben Cohen and Jerry Greenfield, or perhaps other former Ben & Jerry’s executives, to work with investors to buy back the company and take it private.
And Ben & Jerry’s remains a strong brand, Flickinger said. The company generated over $900 million in sales in 2022, according to Statista, a global data and business intelligence firm.
Despite the controversies, “Ben & Jerry’s still seems to be holding its own,” he said.