Reneging on their original aim to keep Ben & Jerry’s independent, the founders of one of the world’s most successful ice cream companies have finally succumbed to the lure and power of Unilever, in a deal worth $326m (£204m).
Ben Cohen and Jerry Greenfield established the ice-cream company in Vermont in 1978, having completed a $5 course in ice-cream making. As the group continued to grow, a series of integral values and ethics, based on using Vermont dairy products and high quality natural ingredients, set the trend for the organisation’s future. The company also donates 7.5 per cent of its profits to charities.
The link-up with Unilever – one of the world’s largest consumer products companies with worldwide sales in excess of $45 billion (£28 billion) – will create “an even more dynamic, socially positive ice cream business with a global reach”, according to a Ben & Jerry’s spokesman.
Under the terms of the agreement, Ben & Jerry’s will operate separately from Unilever’s existing US ice cream business, which includes the brands Breyers All Natural, Good-Humor, Popsicle, Klondike and Wall’s. An independent board of directors will also be established, focusing on providing leadership for Ben & Jerry’s social mission and brand integrity.
But whether Ben & Jerry’s can maintain its brand ethics, in light of the obvious corporate pressure from Unilever to increase revenue, remains to be seen.
Cohen and Greenfield, who will still be involved in the company, are confident that its social values will be upheld. “Neither of us could have anticipated, 20 years ago, that a major multinational would some day sign on, enthusiastically, to pursue and expand the social mission that continues to be an essential part of Ben & Jerry’s and a driving force behind our many successes,” they say.
“But Unilever has done just that. While we and others certainly would have preferred to pursue our mission as an independent enterprise, we hope that, as part of Unilever, Ben & Jerry’s will continue to expand its role in society.”
Richard Goldstein, president of Unilever Foods in the US, is equally positive that the brand will lead the growth in the ice cream market, while retaining its core values. “Ben & Jerry’s has a significant opportunity outside the US and Unilever is in an ideal position to bring the brand values and socially responsible message to consumers worldwide. These opportunities strongly support Unilever’s stated strategy for expanding the ice cream category globally,” he claims.
The branding community has met the deal with a mixed response. Design Motive brand development director Richard MacGilchrist describes Unilever’s latest addition to its brand portfolio as “a clever purchase”, which provides, “a perfect emotional antithesis to HaÃ¤gen-Dazs” in strategic terms.
“The emotional proposition of the brand has almost no geographical boundaries, providing Unilever with the chance to build another global powerbrand. Given the ethical proposition, and all the functional values associated with it – craft, care, real, genuine – Ben & Jerry’s is also a brand that can be stretched into new categories, as long as there is a profitable premium segment.”
MacGilchrist remains sceptical about some possible consequences of the takeover though, claiming Ben & Jerry’s “very ethical nature does not feel at home in the marble halls of Unilever”.
“There are two things above all that matter in the long term. First, will Unilever allow Ben & Jerry’s to remain true to itself, its attitude to its employees and its communities, and second, whether consumers are interested enough to look beyond the thin veneer of the brand and suspect that the two friendly hippies have left in their camper van and been replaced by BMWs and pinstripes,” he says.
However, Andy Milligan, director of internal brand management at Interbrand Newell and Sorrell, believes Unilever will use the deal to show that it is interested in ethical brands.
“If Ben & Jerry’s is kept separate from Unilever, the likelihood is that it shouldn’t be too much of a problem to retain its brand values, because it is as important for Unilever to develop an ethical position as it is for Ben & Jerry’s,” explains Milligan.
But he warns there may be danger in Ben & Jerry’s inability to control everything it does under new ownership. Procter & Gamble suffered during the 1990s when some of its products were boycotted in the US because of animal-testing on beauty, fabric, homecare and paper products. “Ben & Jerry’s may be targeted as part of a mass boycott by pressure groups, resulting from its association with other Unilever brands which could be negative for the environment,” he says.
Milligan highlights the £2.4bn acquisition of Jaguar by Ford in 1990 as a model for takeovers, whereby a brand is kept separate and marketed as an individual entity. However, he cites Quaker Oats’ $1.7bn (£1.1bn) purchase of the formerly independent brand Snapple in 1995 as a failure, after the parent company lost $1.4bn (£8.75m) on the sale of the drinks manufacturer after three years.
“If you are going to buy an independent business you need to keep it operating as that, by maintaining its values and ensuring that it is not associated with the corporate owner in the customer’s mind,” he adds.
This, says Design Bridge group creative director Rod Petrie, is something already achieved in some quarters. “There are many brands that we all know and love which are owned by multinationals, but you wouldn’t know it because they have not stamped their names all over them. Why? Because they respect what they stand for,” says Petrie.
“Any decent multinational that understands brands knows that you ‘mess with them at your peril’. If the company does not respect the intrinsic value of the brand franchise, what’s the point of the deal? What Unilever will give Ben & Jerry’s is the world stage that has eluded it so far.”
PI Design International executive creative director Don Williams echoes Petrie’s comments, highlighting the need for the Ben & Jerry’s personality not to be compromised.
“Ben & Jerry’s is a slightly off-the-wall, but totally believable brand which has an almost tangible personality. It doesn’t need to force itself on you,” says Williams, who also heads the group’s brands division.
“Conversely, Unilever’s brands are, like most large multinationals, product rather than personality-focused and rely on large advertising spend, as well as product delivery to communicate with consumers.”
Unilever’s Richard Goldstein recognises that “much of Ben & Jerry’s success is based on its connections to basic human values”. He claims it is the company’s “hope and expectation that we continue to engage in these critical global economic and social missions”.
Williams, though, adds a word of warning: “If Unilever applies its standard marketing techniques to Ben & Jerry’s, I fear it will succeed only in having yet another somewhat two-dimensional ice-cream brand in its portfolio. The challenge for Unilever is to understand which elements of Ben & Jerry’s personality are visible and important to the consumer, and grow the brand in a true and consistent way to the original vision.”