How Ben & Jerry's brought maverick ideas to mainstream business

Brad Edmondson
19 March 2014
theguardian.com
As Ben Cohen, co-founder of Ben & Jerry’s, turns 63, Brad Edmondson explains why the company is proof that profits and purpose can co-exist
The story behind Ben & Jerry’s Ice Cream and its 35-year struggle to achieve “linked prosperity” started with a simple but radical idea that everyone and everything the company touched should benefit from its profits. The sale of the ice cream makers to Unilever in 2000 therefore was a surprise twist to those who knew the two founders, Ben Cohen and Jerry Greenfield.
I recently published a book on just this. I wrote the story without the input of Cohen or Greenfield as they declined to be interviewed, which bothered me, at first. I had written other stories featuring charismatic founders I did not interview, but those people were always dead. Cohen and Greenfield are still friends and doing just fine. Greenfield, who is famously friendly and loveable, told me that they decided that the story is too painful for them, and especially for Cohen, to re-visit. Cohen didn’t even get back to me.
A painful act
As I got deeper into it, I started to understand the reasons for their snub. The company was Cohen’s baby, and he was its leader. He did not want to sell. But what probably hurt even more was how his friends treated him after the sale. In the 1980s, Cohen was a charter member of the Social Venture Network (SVN). He became a hero for taking on big, bad corporations and showing them that a business with 800 employees could succeed by pursuing a “double bottom line” that balances people and profit. Twenty years ago, that was a radical new idea. So when Unilever, the world’s second-largest food company, agreed to buy Ben & Jerry’s on April 11, 2000 – three weeks after Cohen’s 49th birthday – it appeared that Cohen had sold out.
Shortly after the sale, Cohen went to a SVN meeting and found himself on a stage, taking questions. The questions were tough. It was clear that a lot of people who had once admired him now felt betrayed. One audience member asked him how he could possibly believe that Ben & Jerry’s would still pursue linked prosperity, now that it was owned by a rapacious multinational corporation. As the hits kept coming, Cohen fell silent and his face flushed deep red. Finally he said, “time will tell,” and walked off the stage.
The media wasn’t any nicer. Whenever reporters called, all they wanted to know was why he sold out. So eventually, Cohen stopped talking.
The Ben & Jerry’s story is about flawed people who struggle valiantly to live up to impossibly high standards. Cohen and other board members did not do enough to protect their company from global consolidation, which swept through the ice cream business in the 1990s. By the time they realized how much trouble they were in, it was too late.
Maverick to mainstream

But those failures aren’t the most important part of the story. Cohen also had courage and a deep, intuitive connection to his customers. The company he built took radical, crazy-sounding ideas and proved they could work, which made it easier for other companies to try those ideas.
Ben & Jerry’s was among the first to adopt progressive management practices that are now well known. In 1991, it was probably the first publicly traded company to offer benefits to the same-sex partners of employees. In the mid-1990s, it introduced social auditing to American business. It financed a campaign against bovine growth hormone that saved countless family farms. And because they were first, Ben & Jerry’s did these things the hard way.
Cohen never got credit for his greatest contribution. In 1999, when it became clear that a majority of board members wanted to sell the company, he brilliantly stalled for time while negotiating a unique set of agreements with Unilever executive, Richard Goldstein. Those agreements allow the company’s pursuit of linked prosperity to continue, and 14 years after the sale, they are working fairly well.
Keeping the values in place

For competitive reasons, Unilever needed Ben & Jerry’s badly – so badly that it made significant concessions. It agreed to let Ben & Jerry’s continue as a Vermont-chartered corporation, with Unilever as its sole shareholder. This allows Ben & Jerry’s to retain an independent board of directors, and nine of that board’s 11 members are appointed without any input from Unilever. This independent board exists in perpetuity (that’s legalese for “forever”) and has the primary responsibility for “preserving and enhancing the objectives of the historical social mission of the company as they may evolve”, and for “safeguarding the integrity of the essential elements of the brand”. Unilever has primary responsibility for the financial and operational aspects of the business. So Unilever does own Ben & Jerry’s, but it does not completely control it.
Cohen was under incredible pressure to sell. But as the clock ticked, he kept pushing for specific, enforceable contract provisions. In the sale agreements, Unilever gives the independent board the right to veto changes in ingredients, new products, and marketing materials. Unilever agrees to fund an independently audited annual report of Ben & Jerry’s social performance. It gives the independent board the lead role in designing Ben & Jerry’s social mission activities. It agrees to pay all Ben & Jerry’s employees a living wage, and it gives board members the power to sue, at Unilever’s expense, if that promise is ever broken. It also agrees to spend significant sums on the social mission, to continue making extremely generous annual contributions to the Ben & Jerry’s Foundation, to increase these budget lines as the company’s sales increase, and to keep these promises forever. The agreement has lots of numbers in it, and it runs well over 70 pages, and that is mostly because of Cohen.
A valuable legacy
Cohen and Greenfield never served on the board of directors after the sale. They were heartbroken. They felt that they had failed, and that their friends had turned on them. And for eight years after the sale, it appeared that they were right. Unilever tried to avoid its commitments, and the board didn’t do much about it except grumble. But in 2008, the board finally fought back, Unilever came to the negotiating table, and the spirit of linked prosperity re-ignited.
Today, although the relationship between the two companies is far from perfect, Ben & Jerry’s has become a global leader in corporate social responsibility. All of the ingredients the company uses are fairly traded and free of genetically modified organisms (GMOs). Its dairy farmers follow strict environmental standards that get stricter every year, with Ben & Jerry’s helping the farmers cover the cost of meeting these standards. The movement for marriage equality, which Ben & Jerry’s helped start, now seems unstoppable in the US.
So on 18 March, Cohen’s 63rd birthday, you can wish him many happy returns by signing this online birthday card. Personally, I thank him on behalf of a new generation of social entrepreneurs who are following the trails he blazed, and I give him credit, because the company he built still shows mainstream executives that profits and purpose can co-exist.
Brad Edmondson is author of Ice Cream Social, a book about Ben & Jerry’s Ice Cream and its 35-year struggle to achieve “linked prosperity.”