Ben & Jerry’s Homemade Inc., the Vermont ice cream company with a social conscience, is having a hard time doing well while doing good. So with the company’s stock price sagging, multinational ice-cream manufacturers are trying to scoop up the struggling firm.
On Dec. 2 the company announced that it had received acquisition offers from four firms: Unilever NV, Nestli, Diageo of Britain (makers of arch rival Häagen-Dazs) and Italy’s Roncadin. Ben and Jerry’s stock climbed 8 points on the news.
A grassroots movement against the proposed sale, however, formed quickly after the announcement, and it’s clear that many Vermonters don’t want to see Ben & Jerry’s sold.
On Monday afternoon, about 100 demonstrators gathered in Burlington, handing over ice cream lids with the words “Don’t Sell Us Out” to the company’s board of directors. Vermont government officials, well aware of Ben & Jerry’s large tourist draw and economic boon to local farmers, said that they were “very concerned” about the possibility of an acquisition by a multinational.
“This company has really come to symbolize Vermont to the country and to the world,” Vermont Gov. Howard Dean told Reuters. “It would be a shame if it were sucked into the corporate homogenization that’s taking over the planet.”
Ben & Jerry’s surged to popularity in part on the marketing of its socially responsible, countercultural approach to business. It named ice cream after ’60s icons like Jerry Garcia and Wavy Gravy, and recruited a CEO through an essay contest. It is probably the only company that holds its annual shareholders meeting at a live outdoor concert, where investors can step up to the microphone and give opinions and advice on the company’s future.
The executive director of Vermont’s Public Interest Research Group (VPIRG), Dave Rapaport, said the company has a business model that proves companies can be successful and care about local communities. “We want a local economy. It’s been historically a local economy in this state but the entry of a lot of large corporations coming in here is dominating the characteristics that make Vermont unique,” Rapaport said.
Vermont could very well suffer from a Ben & Jerry buyout. State officials fear it will result in hundreds of lost jobs. Plus, Ben & Jerry’s buys all its milk from Vermont dairy farmers, and it pays more than most premium ice cream manufacturers. The company also donates 7.5 percent of its pre-tax earnings to Vermont charities.
Do-gooders like the company for other reasons. Ben & Jerry’s won’t buy milk, for instance, from dairy farmers who inject rBGH, the infamous Bovine Growth Hormone produced by agribusiness giant, Monsanto. The company makes its brownies in a New York factory that only employs “disenfranchised people,” according to VPIRG, who’ve been out of work, recently off welfare or just out of prison. And in San Francisco Ben and Jerry’s teamed up with a local job training agency to hire at-risk teenagers to work in its local stores and its 3-Com Park franchise.
And yet Ben & Jerry’s is a public company whose stock is traded on NASDAQ, and lately it seems that the firm’s brand of benign capitalism isn’t yielding the return its investors expect.
Public companies are required by law to consider all reasonable offers put before them by outside competitors. The four successful corporations are offering nearly double the share-price value, so the board of directors must take the offer to the shareholders.
Founders Ben Cohen and Jerry Greenfield, along with a shareholder named Jeff Furman, hold 47 percent of the voting shares and are opposed to a buy out. On Monday, Cohen told Vermont public radio that he wants to keep the company local. But they are facing pressure from other shareholders, who want to take the money and run, nearly doubling their investment.
Meanwhile, in Massachusetts, an aggressive 23-year-old named Garret LoPorto created a Web site last week to convince Ben & Jerry’s fans to buy shares in the company, and write to the board of directors. The site has over 700 posts urging Cohen and Greenfield not to sell. LoPorto said he bought some shares this week, but not enough to cover the $225 million being bid for the coveted brand name.
“When I heard about this I thought it was totally against everything Ben Cohen says he is. It doesn’t seem like selling his business to a global corporation is something he’d go for,” said LoPorto. “It’s totally contrary to what Ben & Jerry’s is.”
Visitors to the Save Ben & Jerry’s site are asked to sign a petition against what he calls the “liquidation” of the 21-year-old-company.
Joseph Henry, a shareholder from Iowa, said if globalization gobbles up Ben & Jerry’s, he’ll stop buying the brand. Henry works for Iowans for Sensible Priorities in Des Moines, where he has had opportunities to talk about socially responsible capitalism with Ben Cohen. “Why is Ben & Jerry’s so famous? People are turned on by what they do. Their success is driven by people who care about society and there are a lot of people out there who connect with companies like this,” he said.
“As a shareholder I say no to any sale. I’ve seem small industry get bought out by large competitors here in Iowa. They soon move the plants out of state,” said Henry. “I want the company to stay as it is.” But Henry, with 100 shares of Ben & Jerry’s stock, doesn’t have voting rights.
Joan Johnson of Philadelphia writes on the Save Ben & Jerry’s Web site: “Please don’t let a truly unique institution become just a cog in some monolithic wheel. Let’s continue to have Cherry Garcia and social conscience together in one entity!”