In difficult economic times, the decisions companies make can come back to bite them. The 2010s were a decade of the politicisation of business. In the era of low interest rates and cheap money, companies the world over went out of their way to fuse the political with the commercial. But since then, we have seen an inflationary crisis and skyrocketing interest rates. Now, in 2024, the dust is beginning to settle, and the global economy is recovering for the shock, which means we can stand back and assess the biggest casualties of the era.
Companies lose money or even go bust all the time. That’s capitalism. Perhaps their product became outdated, like Blockbusters failing to adapt to the streaming era. Perhaps their industry was revolutionised by new technology. Perhaps they suffered a marketing gaffe which damaged their brand. In some cases, though, the problems a company faces seem to be entirely avoidable and self-inflicted. Some companies shoot themselves not only in the foot, but in the face too. There are occasional cases where a company almost seems to want to lose money.
Ice cream brand Ben & Jerry’s is one such case. On paper, they had everything made for them. Owned by Unilever, a food and cosmetics giant, their high-priced ice cream products were on many supermarket shelves. However, a series of baffling decisions from company management led to the company’s brand cratering and eventually, Unilever opting to dump it. At the root of the issue was the problem which has so often backfired on corporate decision-makers in recent years: trying to use their profit-making brand to make an unpopular political statement.
Ben & Jerry’s became addicted to courting hostile attention for controversial political opinions and activism. It developed a modus operandi which involved identifying a sensitive topic and storming into the debate around it like a bull in a China shop, upsetting as many people as possible in the process. It is one thing for a company to sincerely express its views on issues and position itself to align with certain causes, but what Ben & Jerry’s did was different. It unashamedly went against the grain and seemed to thrive on people disliking what it said.
For example, the company chose the fourth of July, America’s independence day, to declare that the US “was founded on stolen Indigenous land,” upsetting many Americans and arguably doing little to advance any particular cause. Ben & Jerry’s also made a name for itself on a number of other controversial topics like immigration. Its stances make a lot more sense when the background of its leadership is revealed. Anuradha Mittal, who was probably behind many of these calls as Ben & Jerry’s boss, is also a political campaigner in her own right.
Mittal is the driving force behind an organisation called the Oakland Institute, a political pressure group. She can campaign to her heart’s content in running the Oakland Institute, but when Ben & Jerry’s did the same, it led many to believe the ice cream company cared more about politics than profit. That was especially true when the company allowed its political campaigning to get in the way of its core business: making and selling ice cream. That’s exactly what happened when it waded into the environmental debate around palm oil.
Ben & Jerry’s jumped on the bandwagon of condemning and boycotting palm oil along with other companies like UK supermarket chain Iceland. Unfortunately, Iceland ended up showing us the perils of that approach when its boss Richard Walker had to eat his words a few years later and start buying palm oil again to use in Iceland products, because it was so much cheaper than the alternative ingredients. There is a reason why palm oil is cheaper than other oils like rapeseed and soybean. It is much more efficient to produce.
Iceland, Ben & Jerry’s and others cited deforestation as their motivation for ditching palm oil. Making it, they alleged, was causing the loss of forest land. However, what they apparently failed to realise is that palm oil production uses much less land than other oils – sometimes ten times less – so switching away from it causes more deforestation, not less, because you have to clear more land to produce the same amount of oil. Plus, deforestation rates are falling fast thanks to sustainability innovations. Per Global Forest Watch data, in Malaysia, a top palm oil product, primary forest loss has fallen 70% since 2014. Today, more than 90% of the palm oil imported into Europe is certified as sustainable.
Ben & Jerry’s failed to realise the problem with boycotting palm oil because it was blinded by politics. The lure of being able to call itself an environmentally friendly company by villainising palm oil was so tempting that it forgot to check the longer-term environmental effects of that decision, let alone how it would impact their profit margins and balance sheet. The lesson for other companies is clear. The companies which are most successful always tread carefully around touchy subjects. They do not throw themselves into activism head-first without regard for the consequences.
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