The real Ben and Jerry's story
Two big trends we've noted in the new oligopolies:
- they buy up successful new startups with innovative ideas
- they offer a “pseudo-choice,” that is, a way to buy their product while
thinking your are protesting against multinationals or being more
sophisticated than other shoppers.
Ben and Jerry's ice cream is a case in point. The socially-conscious,
enlightened-management Vermont-based company started having growth-related
problems in the late nineties. The company had been too successful and
the “hippie” founders had tired of running an increasingly complex
Four multinational corporate suitors appeared: ´They were:
- Anglo/Dutch Unilever, in its vast variety of brands, manufacturer in the
U.S. of Breyer's and Good Humor brand ice creams
- Swiss Nestlé, which is a major ice cream maker in Europe
- British Diageo, which is the current owner of the premium brand most competitive
to Ben and Jerry's, the pseudo-Scandanavian Haagen Dasz
- German/Italian Roncadin which is a major European ice cream maker.
By the year 2000, Unilever (a $45 billion multinational) was the winner, buying the company for $326 million. all kinds of promises were made, but Unilever has already taken a firm hand, putting a new CEO, a Unilever veteran, in place, and ambitiously pushing the Ben and Jerry's brand internationally.
The idea is that organic, eco-active image of the brand will translate into a European market where organics are growing rapidly. To that end, Unilever has maintained the funky, privately-held image, barely mentioning the parent company on the company's home page. It's also continued contributions to socially conscious causes. But internally, decisions are being made as in any other division of a big company by people who think like Unilever. For example, layoffs are in the air as Unilever tries to reduce overall staffing. And payments to Vermont dairy farmers are elss generous than they used to be. Gone too is the idea of making executive compensation have some tie to assembly-line worker pay,
But the illusion of independence works. The average shopper still thinks that by passing by the Breyer's and picking up a pint of Cherry Garcia is a act of social defiance. This is so much the case, that recently some right-wing activists started their own premium ice cream business to much flag-waving hoopla. Called Star Spangled Ice Cream, it proposes to donate 10% of its earnings to conservative causes, as a reaction against the charity
policies of Ben and Jerry's. Perhaps they are hoping Unilever will buy them out too, so you can vote any way you want the freezer case, as long as it's Unilever. [Oligopoly Watch]