February 15th 2003 >> Source: MotherJones.com
Culture Change

Does the Selling of Stonyfield Farm Yogurt Signal the End of Socially Responsible Businesses -- Or a New Beginning?
By David Goodman

Stonyfield Farm CEO Gary Hirschberg believes that his values are "genetically encoded" in his company, no matter who owns it.
 
I live in a company town. Every day, I drive by a large building on a hill with a picture of Planet Earth adorning its side. A gaily colored sign featuring bemused-looking spotted cows announces the home of Ben & Jerry's, "Vermont's Finest." The ice cream factory in Waterbury, which doubles as a showcase for the company's lefty political values, has become Vermont's largest tourist attraction, with over 300,000 visitors per year.

· Purchasing Power to the People
· Social Venture Network
· Read David Goodman's book, 'Fault Lines.'

But today this seemingly idyllic landscape can be likened to a facade. It's a carefully preserved company image that belies the reality of who owns Ben & Jerry's. In April 2000, "Vermont's Finest"was acquired for $326 million by Unilever, the Anglo-Dutch giant that is the world's largest consumer-products company. Overnight, my neighbors who work for Ben & Jerry's were transformed into microscopic blips on the balance sheet of a $52 billion foreign company.

This change of fortunes is part of a trend of socially responsible businesses, or srbs, being acquired by vast multinational corporations. Such values-led companies boast of having a "triple bottom line" -- people, planet, and profits. But profits for whom? Now when you walk the aisles of a natural foods store, the image of what you are buying (small, local, earthy) may bear little resemblance to reality (corporate, global, industrial). In the last five years, scores of SRBs -- which range from small organic producers on up to a company like Ben & Jerry's that once gave a sizable percentage of its profits to environmental and social causes -- have been bought by corporate conglomerates. To wit: The Samantha and Odwalla premium juice brands have been swallowed up by Coca-Cola, all-natural Boca Burger was bought by Kraft (a subsidiary of Philip Morris), and organic food leader Cascadian Farm was absorbed by General Mills. Two companies, United Natural Foods and Tree of Life, now control the distribution of about three-fourths of all-natural products. The icons of the srb movement -- quixotic activist entrepreneurs like Ben Cohen at Ben & Jerry's and Anita Roddick at The Body Shop -- have been pushed aside at the companies they founded, their voices diminished.

The latest such company to go on the auction block is Stonyfield Farm. In late 2001, the nation's largest organic yogurt brand struck a deal worth an estimated $125 million to be acquired by Groupe Danone, the French parent company of Dannon yogurt. By early 2004, if Stonyfield president and ceo Gary Hirshberg doesn't get cold feet, the maker of the world's top-selling yogurt (in the United States, Dannon is second to Yoplait) will take majority control of America's fourth-leading yogurt brand.

The Stonyfield deal stunned the social business world. The feisty, outspoken Hirshberg built his name and his company by championing progressive political causes. Now, to the astonishment of many, he is singing (with the occasional off-note) the praises of merging with a $14 billion multinational food giant. "These firms can bring synergies that will add great value," Hirshberg says. Despite what happened to his friend Ben Cohen and numerous other examples to the contrary, Hirshberg insists that his deal can serve as a model for how values-led companies can infect big businesses with their social missions.

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