Ben & Jerry’s – A Case Study in Sustainability

Artisanal Ice Cream

This post continues a series of Case Studies, intended as examples of what Sustainability means, in an operative sense, to some well known companies. It also continues a series on artisanal manufacturers – very small manufacturing firms that grow from a kitchen table, home studio, garage or, in this case, an old gas station.

Who Are Those Guys?

Ben & Jerry — Ben Cohen and Jerry Greenfield – are two guys from Brooklyn who became friends in middle school. Each went off to college, then messed around with a number of unfulfilling jobs. The 1970’s being what they were, the term “hippies” may have fit.

Ben & Jerry 2In good time, they got together and decided to go into business. Bagels were their first choice, but the equipment required seemed too pricy. On the strength of a correspondence course in making ice cream, they set out to open an ice cream cone scoop shop in some warm weather college town. They chose Burlington, Vermont. Burlington is a college town. Warm, I suppose, is relative term.[1]

The TBL in Vermont: the 7½ % Solution

In 1978, Ben and Jerry had $8,000 between them, and found somebody to lend them another $4,000. With that, they set opened a homemade ice cream scoop shop in what had been a gas station. Vermont is famous for cows: certainly a good place for cream. Vermont, as its name could be taken to imply, is also a good place for thinking Green. College students do like ice cream cones. The guys did have a flair for inventing quirky flavors that reflected college town culture. The marketing was just as quirky (like the world record ice cream sundae – 27,102 lbs.) Quirky, but authentic, and fun. The scoop shop worked. And then some. Within a few years, they added an ice cream production and bulk packaging facility, along with the beginnings of a franchising network.

Ben and Jerry were, and still are, very Green people. Vermont exudes environmental awareness and attention to healthy living. To that, the guys added a deep personal commitment to the social aspect of the Triple Bottom Line.[2] That commitment permeates the entire company. As Ben & Jerry’s website puts it:

“Ben & Jerry’s has always believed in linked prosperity — that all stakeholders connected to our business should prosper as we prosper, from those who produce the ingredients, to employees who make the product, to the communities in which the company operates.”

Here are some examples:

>> All employees, including those at entry level are paid a living wage, not minimum wage.

>> The company uses Fair Trade suppliers for imported ingredients (like cocoa for chocolate). Fair Trade ensures that small producers receive fair payment for the goods they produce.

>> Ben & Jerry’s earmarks 7½ % of earnings for support of social causes.

B Corporation

In 2010, Ben & Jerry’s became a wholly – owned subsidiary of Unilever,[3] the international consumer products giant. Unilever owns the stock, but Ben & Jerry’s continues to exist as an autonomous business unit under an independent Board of Directors.

The business exists as a B Corporation. A “B” corporation is a legal entity that, unlike other corporations, is not obligated to put shareholders’ interests ahead of the interests of other stakeholders. Twenty-seven states currently offer “B” incorporation, including Vermont and Delaware (where most corporations register). Fourteen additional states have “B” incorporation legislation in process.[4]

For Smaller Manufacturers

Ben & Jerry’s is a great example of a started-on-a-shoestring manufacturing business that has achieved notable success. Here are a few points that stand out for me:

>> Premium Pricing – From the beginning, Ben & Jerry’s has been able to price their products to yield an adequate margin. Without an adequate margin, profits are inadequate. Absent adequate profits, benefits to stakeholders (including stockholders) just can’t happen.

>> Differentiation – Ben & Jerry’s apparently recognizes that “product” refers to that collection of tangibles, services and perceptions that customers choose to buy. Ben & Jerry’s is more than good ice cream. The entire somewhat counter-cultural mystique wrapped up in a sense of humor is integral to the product – that is, integral to what it is that people choose to buy.[5]

I find it interesting that Ben & Jerry’s continues to exist as a distinct entity within Unilever. It seems that Unilever, big as Unilever is, understands and appreciates the importance of the perceptions component of Ben & Jerry’s product.

>> Seriously Green – The entire company and its culture could be labeled “seriously Green”[6]. Apparently, when done authentically, as Ben & Jerry’s does, it works. The authenticity, in my view, is critical.

Chuck - Sedona 5K - 2Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington

P.S: Contact me when your organization is serious about confronting the realities of 21st century manufacturing … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] For more on Ben and Jerry, see the Wikipedia wiki at http://en.wikipedia.org/wiki/Ben_%26_Jerry%27s. For more on the business, see  http://www.benjerry.com/about-us

[2] TBL – Triple Bottom Line – is the most familiar means for discussing Sustainability in business. TBL balances profitability with the interests of the natural world and with the interests of humanity. For more on the Triple Bottom line, see Double Take on the Triple Bottom Line, this blog, http://jerasustainabledevelopment.com/2012/10/04/double-take-on-the-triple-bottom-line/

[3] Unilever is an international Sustainability leader. For more on Unilever and Sustainability, see Unilever – A Case Study in Sustainability, this blog, http://jerasustainabledevelopment.com/2014/07/17/unilever-a-case-study-in-sustainability/

[4] For more on B corporations, see http://www.bcorporation.net/

[5] Customers pay premium prices for products they perceive to offer better value than others. Case in point: Ben & Jerry’s ice cream, one pint packages were priced at $3.99 today at my usual local supermarket. One pint packages of the supermarket’s house brand of ice cream were priced at $1.49. Presumably, the cost to manufacture and distribute the house brand is less than $1.49. It is hard to image that Ben & Jerry’s manufacturing and distribution cost is much different – perhaps a few cents. That’s an extra ($3.99 – $1.49) = $2.50 margin dollars on each pint, based almost entirely on perceptions. Wow.

[6] There are people who maintain that dairy products, especially ice cream, aren’t even Green, let alone Seriously Green. As President Clinton didn’t say, “it depends on what you mean by ‘Green’”.