Capitalist crunch

Are socially responsible businesses, like Ben & Jerry's Homemade, bound to lose when the stock market calls the shots? Not so, says Jerry Greenfield

by Ian Donnis

Much as Ben Cohen and Jerry Greenfield are known for their eponymous ice cream, they're the leading icons for the feel-good brand of capitalism known as socially responsible business. Ben & Jerry's Homemade, which pumps out 14 million of gallons of ice cream each year from its Vermont headquarters, donates 7.5 percent of pre-tax profits to charity (the highest percentage, it says, of any publicly held company). Pretty good for two childhood friends who began selling their funky flavors from a renovated gas station in Burlington, Vermont, in 1978. But exponential growth into the big business realm has not been without problems for Vermont's finest, which announced in December it was mulling "indications of interest" from undisclosed buyers.

Ben & Jerry sell out to a mega-corporation? The progenitors of Peace Pops, Cherry Garcia and Chubby Hubby? You've got to be kidding, responded outraged fans -- from street protesters and Vermont dairy farmers to the aficionado who created a Web site (www.savebenjerry.com), urging supporters to quash a possible sale by buying Ben & Jerry's stock. Ironically, for a company founded by two guys who promote a values-led business philosophy, it was the lackluster value of Ben & Jerry's stock on the tech-heavy Nasdaq that raised the possibility of a sale. Press reports have identified prospective buyers as Dreyer's Grand Ice Cream Inc., an Oakland-based industry giant, and Ice Cream Ventures, a joint venture between the maker of Häagen-Dazs and Nestle S.A.'s US frozen confection business.

Don't expect Greenfield, who is scheduled to appear on Wednesday, April 5 at 8 p.m. at Bryant College in

Smithfield, to say much about a possible sale. Instead, the 49-year-old native of Brooklyn, New York, will talk up socially responsible business practices and maybe even give away some ice cream. In their 1997 book, Ben & Jerry's Double Dip (Simon & Schuster), Cohen and Greenfield tout their belief that since business has become the most powerful force in society, supplanting religion and government, it must therefore accept responsibility for the welfare of society and the people in it.

Although this general philosophy goes against the capitalist grain, it predates the social contract and is reflected these days by varied philanthropists, from Paul Newman to Bill Gates, and the growth of socially responsible investing. Cohen and Greenfield also cite some persuasive cases -- such as how Heinz began selling dolphin-safe tuna, rather than courting public disapproval -- which show that profitability and socially responsibility can be complementary, rather than mutually exclusive.

Greenfield spoke with the Phoenix last week from his office in Burlington, Vermont.

Q: What's the latest on whether Ben & Jerry's going to be sold?

A: I can say that no decisions have been made, and no implications should be drawn. That's from a press release we put out in December. I have very strict guidelines from my lawyer. It's such a weird situation, because Ben and I are so open. To not be able to talk about it is so bizarre. I guess that's part of what comes from being a public company.

Q: Ben & Jerry's has incredible name recognition and your ice cream is a very successful product. But the possible sale of the company was raised because of the sluggish performance of your stock. Does this show that a values-driven business philosophy, no matter how successful, will invariably be trumped by the dictates of the stock market?

A: No, I don't think it says that. I think what it does say is that a values-driven company, just like any other company, needs to be able to address basic business issue -- basic competitive issues, basic distribution issues. I think there's so much interest in our company because of our social mission and our values. That is what really fascinates people and what has been behind the success of the company, as well as the great ice cream and unusual flavors. But as a public company that's traded on the stock exchange, you have shareholders [who influence the company's direction].

Q: How do you reconcile the possibility of selling Ben & Jerry's to another company that doesn't share your ideals and philosophy?

A: I think our goal has always been, and continues to be, within the bounds of our fiduciary duties as directors. The company has always had a stated policy of being an independent company based in Vermont. That would be our goal within the bounds of our responsibilities as directors.

Q: How much ice cream do you eat?

A: I polished off a pint last night, one of our new flavors. We have a line of eight new flavors called 2-twisted, combinations of other flavors like Urban Jumble, which is a combination of New York Superfudge Chunk and Coconut Almond Fudge Chip. For the last couple of weeks, I've been eating ice cream every day. It's a daily joy. There are times when I go without for a while. I try to stop every once in a while, and I go through periods of exercise. But I avoid it now because I hurt my back picking up a big box of ice cream.

Q: How does Ben & Jerry's come up with new flavors?

A: We have a very active group of people that try to come up with new flavors -- our research and development team. A bunch are suggested by customers. Cherry Garcia was a customer suggestion [as was] Chunky Monkey and Chubby Hubby.

Q: To what extent are American businesses taking up socially responsible business practices?

A: I think it's becoming quite common now. One thing Ben & Jerry's does, we have a social impact report in our annual report that looks at the social impact that our company has. There are a bunch of other companies that are doing that now. It's essentially being demanded by customers, who want to understand what impacts a business has, and they want to support businesses whose actions and impacts they support.

Q: Big business is dominated by news of giant mergers. Time Warner merged with America Online a few months ago, and the parent company of Chicago Tribune just bought the Los Angeles Times. What effect is this kind of consolidation having on the willingness of companies to adopt socially responsible practices?

A: I believe the real changes in business don't come about from the large businesses. I think they are really driven by smaller, entrepreneurial businesses who are trying new things and creating new models. The larger businesses tend to be the ones who adopt those things later on. Even through there's consolidation that goes on and you see larger businesses, there's an incredible amount of growth and activity among small businesses that keeps cropping up. Just because there's a lot of consolidation, that doesn't mean it's the end of small, entrepreneurial businesses. It's very difficult for a large business to be as innovative as small businesses.

Q: Isn't is true, though, that very large companies -- Fortune 500 companies -- are more progressive than small firms when it comes to things like employing a diverse workforce?

A: I guess things like that are driven more by a real commitment to doing that than by the actual size of the business. I think of our company and some of the things that we're good at. I think promoting diversity has not really been something that we've been great at it. I think there are companies that have been much better.

Some people say we're in Vermont and it's not that diverse a state . . . but it simply hasn't been a high enough priority for us. We're doing better, but we have a way to go. We do much better at our board level and our upper management levels than we do throughout the rank and file of our company.

Q: Ben & Jerry's is one of the best-known examples of a company that believes in and practices socially responsible business. By way of serving as an example and through your book, what kind of impact has Ben & Jerry's had on how other companies conduct their business?

A: I haven't done a full-scale study. We wrote the book primarily to share our experiences. It's a choice you have in you own business -- essentially, you can be successful business, both financially and from a social impact standpoint, if that's what your interested in doing.

Contrary to the conventional thinking -- if you want to have a financially successful business, you can only be profitable if you don't take into account the impact of you business -- our business has been more profitable as a result of trying to integrate social concerns into the day-to-day business of the company.

One example is a flavor we make called Chocolate Fudge Brownie. We became aware of a bakery, the Greyston Bakery in Yonkers, New York, which is owned by a religious institution that's working with people outside of the economic mainstream who have had trouble with the law. The bakery provides job training. We became aware that the bakery makes some great brownies, so we came up with a flavor that uses the flavor of the brownies. Simply by purchasing the brownies, we support the work they do and the company makes a bunch of money. That's a way of integrating social concerns into the business affairs of the company.

Q: Ben & Jerry's has grown, probably beyond your wildest imagination, since the time when you and Ben began serving ice cream from a renovated gas station in Burlington, Vermont, in 1978. How have your growth and the realities of business affected how you feel about being in the ice cream business?

A: It has been a tremendous education (extended laughter). I think it has taken away any mystique for me for businesses and how they are run. I think most businesses, whether they're extremely successful or not, are just muddling along. If you're not in business, you have this view of big business as being very smart and efficient and what have you. When you're involved with it, you understand that the people in all these really successful businesses are trying to figure it out as they go along.

It's like reading Dilbert. The stuff that goes on in Dilbert is absolutely true. You can't figure out how some things that make no sense go on in business and yet, the businesses are still so successful.

Q: How would you respond to those who describe the possible sale of Ben & Jerry's as the last stand of hippie idealism against cutthroat capitalism?

A: I can't talk about it at all.

Q: You've compared the socially responsible business movement to the early days of the environmental movement, in the sense that environmentalists were seen as a little out there in the '60s, and now we take curbside recycling for granted. Where do you see the socially responsible business movement going from here?

A: Ben and I have been talking about the way our business operates for several years, and the receptiveness is much greater now than it has ever been before. I think there's a clear acknowledgment now that business has become the most powerful force in our country and as such, it wields this incredible influence over so many aspects of our day-to-day lives. People want business, as this most powerful force, to take some responsibility for what goes on and not just say our job is to maximize profits and the fallout from that is okay.

Q: What are the primary obstacles that keep more companies from taking up socially responsible practices?

A: I think it's the general belief that if you want to make money, you have to be single-minded in your pursuit of profits. And that if you want to do good in the world that you can't do it in business, that you have to be so one-dimensional. I think there's a basic mindset that you can't combine making money with doing good, so you need to separate them if you want to do good. It's not true, but it's the way the conventional mindset is.

Q: What was it like for you and Ben to receive a small business award in 1988 from Ronald Reagan, who epitomizes the opposite of many of the values of your company?

A: We were shocked not only that they gave us the award, but they allowed us into the White House. We thought that was a huge mistake that someone made.

Ian Donnis can be reached at idonnis[a]phx.com.