Executive Summary
CSR is an important part of marketing for many companies in the modern market. Customers perceive companies based on their reputation, and make purchasing decisions based on these perceptions. Ben & Jerry is an ice-cream company that made its name on a unique combination of flavors combined with a good CSR reputation. The company’s structure is a hierarchical vertical system of management, when it comes to it being part of Unilever. On its own turf it has a horizontal structure with vertical elements, with each department acting semi-independently, and all of them reporting to the CEO, who in turn reports to the board of directors. Ben & Jerry’s primary competitors are Baskin Robbins and Blue Bell Creameries. The company sports a better profile than either of those due to a lack of major controversies associated with their names. At the same time, the company is a political pundit, voicing and posting controversial opinions as well as making political stances as a way of becoming a symbol for the progressive side.
Despite the successful use of CSR to gain reputation, brand recognition, and increase sales, Ben & Jerry is criticized by being active only on issues that do not require significant commitment. Their contributions to political causes rarely ranged beyond exposure and verbal support. Nevertheless, it remains one of the most recognizable brands due to its political position. It is recommended to engage in several bipartisan projects and donating generously to them to maintain the reputation of a company with excellent CSR. In addition, the company should return to its roots in regards to compensation, to save money and retain talent, while growing specialists within their own ranks.
Introduction
The 21st century is bringing about changes in the market environment. The modern consumer cares more about the environment, the community, and the ethical treatment of employees than ever before. Likewise, companies start to realize that planet Earth is their home, and all the money in the world is not going to undo the permanent damage being done to the environment. These tendencies, among others, are giving the rise to the concept of Corporate Social Responsibility (CSR). Many companies today are claiming to be following these principles in some way or measure. Their adherence to the announced concepts is often a good marker of predicting their performance in the future. A company that does not show integrity with what they say and do will eventually lose face and customers. The purpose of this paper is to evaluate the company Ben&Jerry’s Ice Cream based on their announced values, structure, and track record in relation to CSR. Conclusions and recommendations will be provided at the end.
Background
Ben & Jerry’s is a well-branded ice-cream company. It has representation in over 600 stores across the US. Starting as a small independent business, it quickly grew to be a serious player in the field (Beard, 2021). Having been bought by Unilever, it transformed from a horizontal leadership structure to that of a mechanistic and hierarchical chain of command. The company employs 999 workers, thus being one of the largest subsidiaries in Unilever that does processing under singular leadership (Beard, 2021). This section will discuss the company’s management structure, products and services, technologies, and marketing philosophy.
Management Structure and Philosophy
Management structure of Ben & Jerry, as it stands, is a vertical hierarchical structure. The company is part of the Unilever group of companies and is included in its overall architecture. The overarching CEO to whom Ben & Jerry is responsible to is Matt Close, who is the president of the Ice Cream group of products (Beard, 2021). The company’s CEO is Perry Odak, who responds to the board of directors, of which there are 4 people – Jennifer Henderson, Mathew McCarthy, Anuradha Mittal, and Daryn Dodson (Beard, 2021). The departments that respond to the CEO, and through him, to the board of directors, are as follows: Operations, Social Mission, Business Development, Human Resources, Finance, Marketing, and Sales (Beard, 2021). They are united into several divisions, namely the Operations Management, Finance, Social relations and development, HR, and Marketing. While some divisions are restricted to a singular department, others feature several of them working together. Individual departments exist in parallel to one another and may cooperate on issues whenever necessary, but are not directly subordinate to one another. Such a structure is a left-over from the company’s early days, when horizontal organization was more prevalent.
The vertical of power still exists and is clear: Departments – CEO – Board of Directors. The decisions of the latter overrule personal considerations of any individual member or department (Beard, 2021). Likewise, the decisions of Unilever overarching hierarchy overrule those of Ben & Jerry’s board of directors. The company’s management strategy matches its organizational philosophy, which is laisses-faire – each department is largely allowed to manage their own business without any additional supervision, with the CEO establishing cooperation to achieve specific goals, whenever the board of directors comes up with an overarching strategy that requires processes to be done in a way different from the established status quo.
Products/Services
Ben & Jerry produce over 50 different original flavors, which often include mixing food with ice-cream. Their food is often named after famous people, such as Stephen Colbert or Colin Kaepernick (Beard, 2021). The brand also features traditional flavors that everyone is familiar with in order to compete with other companies in the established market. Additional products that the company produces includes frozen yoghurt and sorbet (Beard, 2021). The reason for the company to have expanded into these areas are because the facilities and competencies required to producing both are similar. The unitarity of the supply chain and the products necessary to create these goods are also compatible. Therefore, the company focuses on frozen desserts as their primary product. From a service perspective, Ben & Jerry offers a range of services from supplying shops with their products to distributing ice-cream and associated goods through direct sales.
Technologies
Ben & Jerry is an innovative company when it comes to organizational aspects of business. While the technologies used to produce and store ice-cream ae relatively similar across the ice-cream sector, the company utilizes advanced practices and instruments for quality control and logistics (Beard, 2021). It is well-known for the use of block-chain as a means of reducing carbon footprint and optimizing deliveries. Ben & Jerry also utilizes tracking technology to ensure that goods arrive where they need it when they need it, thus avoiding overstocking, spoiling of goods, and excess transportation (Beard, 2021). Finally, the company has an advanced CRM suite to keep contact with customers, fans, and suppliers.
Advertising and Marketing
The company’s advertising and marketing strategy positions itself on three axes – uniqueness of flavors, good social credit with the customers, and market penetration strategies. Ben & Jerry are notorious for attracting additional customer base through various contests, giveaways, and other methods of providing the best possible deals for buyers, thus ensuring a steady presence in the market and an ever-growing revenue flow (Beard, 2021). The company has shown stable growth even during the COVID-19 crisis (Beard, 2021). As it was stated, the company gets its brand recognizable by featuring a plethora of unique flavors and combinations that cannot be found anywhere else. Some of the examples include the Peanuts and Popcorn flavor, Wavy Gravy, and Chubby Hubby, among many others. In so doing, they push the customer to return if they have enjoyed the flavors.
Finally, the company enjoys a favorable CSR image. It often subscribes under social justice causes, which include environmental protection, racial and gender equality, the equality of pay, and fair compensation of labor. It is evidenced even in the choices of names for their products. One of the flavors is named after Colin Kaepernick, a black American football player who refused to kneel before the flag until the wrongs against his brothers and sisters have been rectified (Beard, 2021). Thus, the company seeks to ingratiate itself with the customers as an ethical enterprise.
Markets
Main Competitors
The main competitor of Ben & Jerry is Baskin Robbins – massive multinational company that has, since 1945, introduced over 1,500 flavors to the market. It also features 31 unique flavors, one for every day of the month (Rosenberg, 2020). The company has a much larger coverage and a longer history of success. It is, however, a stand-alone company and does not have powerful alliances to other large conglomerates. Baskin Robbins also does not enjoy the same social profile when compared to Ben & Jerry – they are not as widely known for their humanitarian efforts and CSR. Another competitor is Blue Bell Creameries. They feature a portfolio similar in nature to that of Baskin Robbins, with over 1,100 tastes offered to the market (Rosenberg, 2020). However, the company is marred in controversy, as its former CEO, Paul Kruse, is currently on trial for conspiracy and fraud.
Organizational Structure vs. Competition
Ben & Jerry’s structure reflects less on the adapting to competition and more on the evolution of the company itself. Its current structure allows for several advantages – the horizontal structure and independence of individual departments allows for greater creativity and personal initiative. At the same time, there are mechanisms in place for vertical engagement. Ben & Jerry is part of Unilever, and can utilize the resources available to the larger conglomerate to match even the giants, such as Baskin Robbins (Beard, 2021). This is done by forwarding initiatives from the CEO, to the board of directors, and from them – upwards across Unilever’s vertical hierarchy. It allows for engaging different sections of the group, for better results.
Marketing Philosophy, Competition, and CSR
Ben & Jerry uses its CSR as part of its marketing philosophy. The company flaunts its good reputation and adherence to the goals of humanity, fairness, justice, and environmental friendliness, as its selling point (Beard, 2021). As it is possible to see, most of their competition have either neutral or negative CSR records, having been engaged in shady tactics or lukewarm apathetic reactions to the events around them. Ben & Jerry have been notorious for naming a flavor to celebrate the US approval of same-sex marriages in 2015, pledging themselves to achieving a neutral carbon footprint by 2024, and engaging in the #StopHateForProfit campaign (Beard, 2021). They also have been notorious for criticizing both Donald Trump’s and Joe Biden’s administrations, thus earning the fame of an activist brand. This gave them additional advertising and brand strength over their opponents. As a result, Ben & Jerry, while not being the largest, is one of the most recognizable brands.
Corporate Social Responsibility (CSR)
Ben & Jerry is notorious for its political activist stance on many problems and issues that plague modern society. The majority of its CSR is aimed at the domestic market in the US. It had stood against the 6th January Revolt, which the company described as a “white supremacist movement” (Beard, 2021). At the same time, the company joined the protests against racially-motivated murder of George Floyd, advocating for defunding the police. In the international stage, the company had opposed the illegal occupation of the Palestinian territory by ending its sales there. Following the trends, Ben & Jerry has engaged in blockchain technology and lean management to reduce its carbon footprint, which it has seen some success with and is expected to become a carbon-neutral company by 2024.
At the same time, the company has been criticized for nominal commitments when it came to CSR. Its sales in the Occupied Palestinian Territories were nominal, thus their boycott did not hurt the company’s bottom line. Its donations to various causes were minor at best – the donation made in 2018 to support women’s rights, migrants, and racial justice amounted to 25,000 USD, which is a very small token sum (Beard, 2021). Therefore, some critics say, the company only engages in CSR for cheap PR and exposure, usually by influencing the public discourse with limited-edition ice-cream flavors, token donations, or controversial political opinions that do not require any actual commitment.
Conclusion/Assessment
Based on the history of the company and their track record of responsible and irresponsible behavior, it can be concluded that Ben & Jerry are going to be doing alright in the CSR department. Although the criticisms leveraged against them are fair, for the most part, it is not to say that having a controversial political opinion is without its costs. Based on their words and actions during the Trump presidency, for example, Ben & Jerry alienated much of their republican-leaning clientele (Beard, 2021). At the same time, their stance and commitment to social justice values have earned them new customers in the blue states, particularly among Hispanics and other minorities. It is possible to see that while having polarizing CSR may cause financial deficit in the short-term, integrity inevitably pays off in the long-term (Borglund et al., 2021). The company clearly understood that dividing its customer base enables to capitalize on the supporting side not only for its objective merits, but also as a status symbol and a symbol for political allegiance.
Nevertheless, several recommendations can be made in regards to CSR and associated actions. The first criticisms about the company doing it for cheap PR are not without merit. Therefore, it would be beneficial in the long-term to disprove those by contributing to bipartisan goals, such as AIDS research, COVID-19 assistance, or large-scale relief efforts in Africa (Borglund et al., 2021). Committing significant sums would not only prove critics wrong but also provide greater exposure, demonstrating that Ben & Jerry is not just a political activist company, but a genuine philanthropist business. Second, the company should bring back its 1-5 salary strategy, that it employed between 1992-1997 (Beard, 2021). It stands for the salary of the company’s top management staff not exceeding the amount of the most basic employee by more than 5 times. Studies show that exorbitant CEO compensation packages are often not worth the money. Likewise, increasing salaries for employees would greatly improve productivity and retention. Doing so would not only attract talent, but earn exposure and new customers, who would appreciate this CSR initiative.
References
Beard, A. (2021). Why Ben & Jerry’s speaks out. Harvard Business Review.
Borglund, T., De Geer, H., Frostenson, M., Lerpold, L., Nordbrand, S., Sjöström, E., Sweet, S., Windell, K., & Grafström, M. (2021). CSR and sustainable business. Sanoma Utbildning.
Rosenberg, R. (2020). Around the corner to around the world: A dozen lessons i learned running Dunkin Donuts. HarperCollins Leadership.