|Friday, 14 October 2011 00:00|
Social justice: More than just sprinkles on top
By Arthur Wolak
For the Jewish Free Press
After Ben Cohen and business partner Jerry Greenfield completed a course on ice cream making, they established their first ice cream shop in 1978 and went on to build one of the largest ice cream businesses in America — a $300 million business empire — under the international banner name, Ben & Jerry’s Ice Cream.
Choosing ice cream over bagels as their vehicle to prosperity, they initially lacked location. “We figured if it was going to be ice cream, it should be a warm, rural college town,” noted Cohen during a recent visit to the Northwest, but their analysis discovered that competition had already beaten them to the hot spots. “We decided to throw out the criteria of warm and ended up in Burlington, Vermont,” where cold and snowy winters are legendary. Cohen still calls Burlington home.
Cohen, preferring social activism to the daily business grind — a throwback to his hippie youth — resigned as CEO in 1995 but continued to serve as board chairman and then on the advisory board because he believes strongly that business has a “spiritual aspect” that should be recognized by the business world. Ben & Jerry’s was purchased by Unilever Corp. in 2000.
“There is a spiritual aspect to business just as there is to the lives of individuals. As you give, you receive. As you help others, you’re helped in return,” Cohen asserted.
He didn’t come to this conclusion overnight. Cohen’s business philosophy evolved as the company grew.
Ben & Jerry’s faced many early challenges. Banks were wary about financing a pair that lacked business experience, collateral, and credit histories. To get a bank loan, they needed a business plan. Without knowing how to prepare one, they used a template for a pizza parlor that sold pizza by the slice, simply plugging in “ice cream cone” wherever pizza slice was mentioned, and got their initial seed money. Though they broke even in their first year, things quickly changed two years later.
“We were at the very end of our rope and losing money,” Cohen said. “Finally, in a last-ditch effort to survive we decided to pack our ice cream in pint containers.”
That was in the early ’80s.
Entering Boston, their first major U.S. market, nearly brought their business to an end. Häagen-Dazs, owned by Pillsbury, was fierce competition and Ben & Jerry’s distributor wanted to drop the Vermont-based company as a client. Ben & Jerry’s quickly printed banners and flew them around major Boston sport stadiums, and rented signs on Boston transit buses that featured two pudgy hands squeezing a pint of Ben & Jerry’s ice cream saying, “Don’t let Pillsbury’s dollars strangle Ben & Jerry’s ice cream. What’s the Doughboy afraid of?” This proved a successful act of chutzpah.
“Pillsbury was getting such a black eye from their tactics of trying to keep us out of distribution that they relented and allowed us to continue to keep distributing our ice cream,” Cohen said.
Annual sales rose into the millions and the two spent most of their time hiring, firing, and meeting financial advisors. “We felt like we were becoming just another part of the economic machine that tends to oppress a lot of people,” Cohen lamented. Then advice from a friend gave Cohen an epiphany: “If there’s something you don’t like about business, why don’t you just change the way you do it?” the friend said.
For Cohen, this was genius. Venture capitalists wanted desperately to invest.
“We decided to use this need for cash as an opportunity to make the community the owners of our business,” Cohen recalled. Vermont’s first in-state public stock offering made many residents part owners of the company. A national public stock offering followed, as did the formal creation of the Ben & Jerry’s Foundation, which received 7.5 percent of pre-tax profits, the highest amount any publicly held company gave to charity.
Cohen felt the definition of success was an obstacle because it is measured “by profit, how much money is left over at the end of the month or at the end of the year,” he said.
Instead, Ben & Jerry’s decided to measure its success through a “two-part bottom line” — by how much the company has helped to improve quality of life in the community and how much money it has made. However, their managers had bad news: When company energy was devoted to improving the quality of life in the community, it took away from improving profits.
Ben and Jerry were astonished. They recognized that while money should be a means, not an end, the social purpose should be their focus, integrating those concerns with an eye on profits.
The company bought coffee from a Mexican cooperative, improving Mexican coffee farmers’ quality of life by purchasing their beans. It bought blueberries from a Native American tribe, which helped benefit them. It purchases $3 million dollars worth of brownies annually from Greyston Bakery, which provides employment opportunities for those in need. Ben & Jerry’s, now owned by the Unilever conglomerate, recently committed to making all of its ingredients fair-trade certified by the end of 2013.
“Our actions are based on deeply held values,” Cohen said. It’s a unique selling proposition. It motivates our employees. It helps with recruiting and it builds tremendous consumer loyalty that’s based on shared values.”
Ben believes business should take responsibility for the common good rather than focus on self-interest. He believes that business, as a powerful social force, can integrate social concerns throughout its activities, while supporting service organizations help people. “As your business supports the community, the community supports your business,” Cohen said. “We are all interconnected, and as we help others we cannot avoid helping ourselves.”
(Arthur Wolak is a Vancouver-based freelance writer.)