Earlier this week, Unilever dropped something of a bombshell. The multinational MCG company announced that it would slash 7,500 jobs and shed its ice cream business, which includes brands such as Magnum, Cornetto and Ben & Jerry’s due to growth melting away in that area of the business.
But, while Unilever’s Magnum and Walls ice cream arms should be a straightforward sale, Ben & Jerry’s will likely prove more of a head-scratcher thanks to its strong brand identity and purpose, as well as its B Corp status. The Financial Times has reported that Unilever is working with advisers to drum up interest from private equity groups in acquiring its ice cream arm, reportedly valued at between €10 billion to €15 billion ($AU16.5-24.8 billion).
“The B Corp certification has to change at the company level. Whoever owns Ben & Jerry’s would have to change their company constitution and do lots of different things to maintain that certification,” said Nick Hunter, founder and CEO of B Corp-certified creative agency Paper Moose.
“Whoever buys them, it will be interesting to see whether that is of interest to them because it can create positive change for the broader business. You’ve seen that with Carlton United Breweries and Lion with Stone & Wood and Four Pines and the changes those parent companies have had to make to keep that certification are not insignificant.”
Ben & Jerry’s political and social activism is well known, certainly amongst the advertising industry. In 2014, it worked with WWF on a campaign opposing dredging near the Great Barrier Reef, attracting ire from Liberal and National party politicians in the process. In May 2017, it announced that it would not sell two scoops of the same ice cream flavour in Australia, due to the refusal of the Australian government to legalize same-sex marriage and that the stance would continue until same-sex marriage was legalised. Ad that’s just in Australia.
“There is some level of alignment if you think about Unilever’s purpose ‘To make sustainable living commonplace’ and Ben & Jerry’s to ‘Advance human rights, dignity, support social and economic justice for marginalised communities and protect and restore the natural system,'” said Nick Foley, director of brand marketing firm Intangify.
In summer 2021, Ben & Jerry’s even sued its parent company in an attempt to stop the sale of its ice cream in settlements in the West Bank, saying it was “inconsistent” with its values. In June 2022, Unilever sold the Ben & Jerry’s ice cream business in Israel and the West Bank to its local licensee, Avi Zinger, for an undisclosed sum. The next month, Ben & Jerry’s filed a lawsuit against a Unilever subsidiary to try to block the sale. In December 2022, Unilever announced that the litigation had been “resolved.”
“Therein lies the difference, doesn’t it? When you have founders that are very strongly aligned to their original mission and purpose and staying true to it. But then you have a larger organisation that doesn’t have the flexibility or the wherewithal to do something like that,” said Foley.
“If you look at it from a branding perspective, Ben & Jerry’s was a single brand. Their purpose, values, beliefs, attributes, essence and unifying idea would be expressed in a manner consistent with a single brand. Now if you think about any conglomerates — insert Cadbury, Proctor & Gamble, Kraft Heinz — all of those are playing the house of brands game. You can see how the founders, probably on a variety of things, were underwhelmed with how Ben & Jerry’s could express itself in a broader corporate guise.”
Currently, Unilever is looking to offload all of its ice cream brands in one fell swoop. The trio could make for a tasty offering but, in the mind of Daye Moffitt, executive strategy director at strategic brand and design agency, Houston Group it might be better if they were served up separately.
“Just looking at it through a purely brand lens, I think there’s an advantage in separating. I’m a massive purpose fan and brands with integrity are the ones that will ultimately survive and thrive. Even if they became a corporate ice cream business and sold all three of the brands together unless they’re aligned on values, it wouldn’t be a successful corporation,” she explained.
Of course, all of these important points on branding and purpose might become moot. According to the US Department of Agriculture, in 1986, the average American ate 18 pounds of regular ice cream. By 2021, the most recent year of the data, that was down a third to just 12 pounds per person. Even the low- and fat-free ice cream market has remained stagnant in the US.
In Australia, there is a slightly different story, with Global Data finding that the per capita expenditure (PCE) on ice cream in Australia increased from $23.10 in 2016 to $35.40 in 2021, surpassing the regional PCE of $2.70 and the global average of $5.20. Australia’s PCE on ice cream is projected to reach $36 by 2026.
“It must be a difficult climate for premium ice cream brands. People are trending down and buying cheaper in the current climate. Premium ice cream businesses just aren’t seeing the type of growth that shareholders want,” added Hunter.
“That’s where the struggle is for an organisation like Ben & Jerry’s that exists for a higher purpose.”
