It ain’t easy being green these days – especially if you’re an independent green business.
The list of smaller, green companies being swallowed up by global conglomerates is growing in both prestige and numbers: responsible ice cream-producer Ben and Jerry’s, now owned by Unilever; organic yogurt maker Stonyfield Yogurt, now in partnership with Danone; alternative beauty companies The Body Shop and Aveda, now owned by L’Oreal and Estee Lauder, respectively; organic chocolatier Green and Black’s, now owned by Cadbury Schweppes; Tom’s of Maine toothpaste, now owned by Colgate-Palmolive; personal care company Burt’s Bees, acquired by Clorox in November 2007; and Husky Injection Molding Systems, acquired in December 2007 by Onex Corporation for $960 million.
It’s not hard to see why small companies are vulnerable – multinationals can offer increased distribution, access to more markets, and most of all, cold, hard cash. And large corporations often find it easier to acquire than to innovate.
Consumers are at the very least surprised to discover that their favourite brands have become mere subsidiaries within a large multinational.
A recent poll by the website Treehugger.com (ironically, this once-independent site is now owned by the Discovery Channel) found that 35 per cent of consumers take their business elsewhere when corporations acquire their once-revered brands.
Skeptics of responsible retailing can easily suggest that small companies have simply reached their expiration date – unfortunate hippie victims of corporate Darwinism. But these partnerships can help bring ethical activities into the mainstream.
“We’re fortunate,” says Sean Greenwood, spokesperson for Ben and Jerry’s. “We could have had a lot of businesses that could have bought us and [closed us down]. But they didn’t do that. And I applaud them for that and for recognizing and understanding that that there’s a value in keeping the folks who are trying to hold on to what’s really important: the essence of Ben and Jerry’s.”
In April 2000, the Anglo-Dutch Unilever NV announced it would buy flagging Ben and Jerry’s stocks for $43.50 a share, a large premium over the previous day’s closing price of $34.93.
Even though the initial takeover caused factory closings, job losses, and management changes, Greenwood says that his company has helped change Unilever.
“There’s been a good give and take, back and forth with the organizations,” he says. “It feels like this is a good fit.”
But co-founder Jerry Greenfield told the UK’s Green Futures magazine in 2006 that he doesn’t feel that fit with Ben and Jerry’s anymore.
“I have no responsibility and no authority in the company,” he said. “I have my good name. I have an ability to influence things I want to, and to not be interested in things I’m not interested in. That’s the extent of my role.”
He went on to add, though, that influence does exist.
“I was skeptical about this supposed ‘transport of values’ from Ben & Jerry’s to Unilever, but it has happened to some degree,” Greenfield observed.
Kevin Ranney, Managing Partner and Director of Research at Jantzi Research, says that positive transfers from the acquired company to the acquirer are difficult to quantify.
“That’s one of the reasons why we’re not really excited to see these acquisitions occur,” he says. “The reality is that what Ben and Jerry’s was all about is now buried deeply within a massive corporate structure, and it has relatively little impact on anyone’s assessment of Unilever.”
Sean Greenwood says that while customers understand there has been a management change, they still support the ice cream.
“I don’t think people say, ‘Wow, this pint today in January 2003 is different than the December pint of 2002.’ I think they are saying Ben and Jerry’s has continued to be a Ben and Jerry’s organization and product throughout our years.”