Ben & Jerry’s Tests the Limit of Altruism Versus Profit : Business


Who knew ice cream could be so fraught.

Last week, Ben & Jerry’s independent board and its parent, British consumer giant Unilever Plc, resolved a highly unusual legal dispute that had been churning between them since last year. It began when Ben & Jerry’s announced in July 2021 that doing business in the Israeli-occupied West Bank was “inconsistent with our values” and that it would cease selling its ice cream in the region.

Things started to get complicated from there. Ben & Jerry’s Israeli licensee, Avi Zinger, sued the brand and Unilever, contending that their actions violated US and Israeli law. Unilever decided to rid itself of the whole mess by selling Ben & Jerry’s Israeli operation to Zinger. That prompted Ben & Jerry’s independent board to sue Unilever to try to block the deal, arguing that its parent had undermined its authority and that the continued presence of the brand in the region would damage its integrity.

Both Ben & Jerry’s and Unilever declined to elaborate on last week’s resolution, with Unilever saying that the terms are confidential. But Zinger has told the media that his recent deal with Unilever is unchanged since the settlement.

There’s a lot going on here: a power struggle between a brand and its parent; big thorny geopolitical issues that I won’t even begin to wade into; legitimate questions about what it means to be a social enterprise; even a touch of the heated ESG culture wars. But at the crux of it all is a debate about what happens when a company’s business mission and social mission are at odds. 

Normally these kinds of conflicts get hashed out privately inside executive suites and boardrooms with, let’s be honest, the financial imperative prevailing. The reason this dispute became so heated and so public can be traced back to Unilever’s $326 million acquisition of the Vermont-based ice cream business in 2000. As part of the deal, the company’s founders (the real-life Ben and Jerry) required that the brand maintain an independent board responsible for furthering its social mission; Unilever would oversee the financial and operational parts of the enterprise.

For 20 years, assigning responsibility for these two functions to two separate bodies worked just fine. Ben & Jerry’s spoke out in support of gay marriage, was early in sounding the alarm on climate change, endorsed the Occupy Wall Street movement, called for the dismantling of white supremacy and boycotted advertising on Facebook over the proliferation of hate speech on the platform. The progressive causes that the ice cream maker championed aligned with the type of consumer it wanted to attract, which meant more sales of Chunky Monkey and Phish Food. The formula worked: Last year, Ben & Jerry’s became one of only 13 Unilever brands to surpass €1 billion in annual sales.

Unilever benefited from Ben & Jerry’s social mission, too, injecting its doing-well-by-doing-good attitude into its own operations. Former Unilever Chief Executive Officer Paul Polman, who retired in 2018 after a decade-long run, even became the de facto leader of Big Business’s burgeoning conscious capitalism movement. Polman’s successor, Alan Jope, took it a step further, demanding that all Unilever brands have a clear purpose — Hellmann’s mayo tackling food waste, Vaseline aiding in skin care for Syrian refugees. Ben & Jerry’s, with its innate sense of mission, was the company’s shining example.

But the West Bank move changed all that. It was different from Ben & Jerry’s past actions, which had mostly entailed putting out fiery statements or introducing new flavors in support of a particular cause. To the Ben & Jerry’s board, pulling out of the Israeli-occupied territory was a question of ethics. But to Unilever, ceasing operations there was a business decision and therefore fell within its jurisdiction. “There is plenty for Ben & Jerry’s to get their teeth into on their social justice mission without straying into geopolitics,” Jope said in a July call with journalists. Ben & Jerry’s lawyer compared the statement to Laura Ingraham telling LeBron James to “shut up and dribble” after talking politics in a 2018 interview. 

Ben & Jerry’s decision to pull out of the West Bank did have real consequences for Unilever. Jope received an irate call from the Israeli prime minister, and several state pension funds pulled their money out of Unilever. Some investors took it as a sign that the company had taken its purpose-driven agenda too far and were not exactly displeased when Jope announced that he would retire at the end of 2023.

Until then, highlighting the independence and sway of the Ben & Jerry’s board had always been in Unilever’s best interest — an opportunity to underscore its own mission-driven bona fides. But in the lawsuit, Unilever instead argued that the board’s scope and power was in fact quite narrow, to the point where it lacked the authority to bring the lawsuit in the first place. The change in tone and tactic signals a deep change in the relationship between Unilever and Ben & Jerry’s, which is clearly no longer the favorite child.

But it also represents a more existential shift at Unilever, which may now be questioning the value of trumpeting its commitment to social issues so loudly and publicly. The tide is turning within parts of the investment community, which are starting to view ESG as an unwelcome distraction.  To Unilever and the rest of corporate America, whatever sales boost comes from selling deodorant or ice cream that stands for something may no longer be worth the backlash from shareholders. 

More From Bloomberg Opinion:

• Republicans Are Coming for ESG Investing: Ramesh Ponnuru

• A Look at Who Might Succeed Jope at Unilever: Andrea Felsted

• Why Brands Are Reeking Havoc on Our Noses: Ben Schott

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Beth Kowitt is a Bloomberg Opinion columnist covering corporate America. She was previously a senior writer and editor at Fortune Magazine.

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