Ben & Jerry’s, the Vermont-based ice cream brand renowned for its quirky flavors and commitment to social causes, is embroiled in an escalating legal dispute with its parent company, Unilever. The latest chapter in this conflict involves a lawsuit filed by Ben & Jerry’s against Unilever, accusing the multinational corporation of improperly firing its CEO, David Stever, and attempting to stifle the brand’s outspoken stance on political issues, particularly regarding Israel’s conflict with Hamas.
The roots of the tension lie in a unique agreement Ben & Jerry’s struck with Unilever when the British company acquired the ice cream maker 25 years ago. The deal outlined an unusual arrangement in which Ben & Jerry’s retained a degree of independence, including a focus on its “Social Mission” and commitments to sourcing ingredients from local producers, like the Greyston Bakery in New York and St Albans farm co-operative in Vermont. The agreement also established a separate board to safeguard the brand’s social activism agenda.
However, this arrangement has become increasingly strained, with the relationship fraying over the years. The lawsuit is the latest in a series of legal skirmishes, driven by Ben & Jerry’s directors who are staunch in their desire to preserve the company’s independence. The situation was further complicated by Unilever’s decision to demerge its ice cream division later this year, which includes Ben & Jerry’s and Magnum. This restructuring could significantly impact the brand’s governance, as any new investors would likely have to contend with the terms of the long-standing agreement, which has no expiration clause.
The conflict underscores a deeper issue: a clash between the brand’s activist ethos and the pressures of corporate oversight. Unilever has been accused of sidelining Ben & Jerry’s activist mission, with some pointing fingers at Anuradha Mittal, chair of Ben & Jerry’s independent board. Mittal has defended the company’s historical commitment to social causes, asserting that the social mission has been integral to Ben & Jerry’s identity for decades. She also pointed to the agreement’s mandate to preserve and enhance the brand’s social mission, leaving ample room for activism.
Tensions have been further exacerbated by external forces, including activist investor Nelson Peltz, who joined Unilever’s board in 2022 and has advocated for greater shareholder returns, pushing the company to refocus on financial performance. Unilever’s recent leadership shakeup, including the ousting of CEO Hein Schumacher, has only intensified these conflicts.
The saga highlights the complexities of corporate acquisitions and the challenges that arise when a company’s founders insist on maintaining a level of control over the brand’s mission, even after being absorbed by a larger conglomerate. Ben & Jerry’s co-founders, Ben Cohen and Jerry Greenfield, who made the sale to Unilever in the 1990s, have since expressed regret over the decision, recognizing that the agreement they brokered may not have been sustainable in the long run.
At the heart of the issue is a fundamental clash between the brand’s social mission and Unilever’s commercial objectives. While Unilever oversees the financial and operational aspects of Ben & Jerry’s, the independent board is tasked with protecting the brand’s image and social mission. This division of responsibility has proven difficult to manage, particularly when controversial political issues, such as the company’s stance on selling ice cream in occupied Palestinian territories, arise.
In the broader context of corporate acquisitions, the Ben & Jerry’s saga serves as a cautionary tale for companies looking to maintain a brand’s identity after a takeover. The delicate balance between autonomy and corporate control needs to be carefully considered, as perpetual independence may not be feasible in a corporate structure that requires centralized decision-making.
As the legal battle continues, the future of Ben & Jerry’s brand identity—and its relationship with Unilever—remains uncertain. While many of its customers value its commitment to social causes, others simply enjoy the product for its premium quality. The brand’s ongoing legal disputes, however, risk overshadowing the very image it has worked so hard to cultivate.
You Might Be Interested In:
