Ben & Jerry's fights the power over GMOs

The ice cream maker's support for labeling modified foods pits it against some of the world's biggest companies, including its own parent.

By MSN Money Partner Aug 1, 2014 1:05PM
Caption: Ben & Jerry's ice cream sign at the visitors center
Credit: © Kristoffer Tripplaar/AlamyBy Matthew Boyle, Businessweek

In early May, Unilever (UL) Chief Executive Officer Paul Polman paid a visit to the headquarters of its subsidiary Ben & Jerry's in South Burlington, Vt., meeting with about 100 employees to share his views on deforestation, farming, and food made with ingredients from genetically modified organisms. 

That night, Polman had dinner and ice cream with Vermont Governor Peter Shumlin and Ben & Jerry's CEO Jostein Solheim. 

Two days later, with Solheim at his side, Shumlin signed the nation's first law requiring labeling of foods made with GMO ingredients.

Ben & Jerry’s support of the law -- a swirl of savvy public relations, financial backing, and grass-roots activism -- pits the ice cream maker against the world's biggest food companies, including its own corporate parent. 

Unilever has openly opposed state efforts to legislate GMO labeling, throwing money into campaigns to defeat an initiative in California. But it has quietly allowed Ben & Jerry's to assert itself as a vocal proponent of such laws, especially in Vermont. "I don't think they will ever want the potentially massive negative PR of trying to silence B&J," says Andrew Wood, an analyst at Sanford C. Bernstein.

If Unilever tries to play both sides of the issue, it may wind up hurting itself and Ben & Jerry's. "In the short run, they might get away with ignoring what B&J is doing, but sooner or later it will catch up with them," says Marion Nestle, a professor of nutrition and public health at New York University and the author of "Food Politics," a book about how the food industry influences nutrition policy. 

Unilever's stance makes it "look stupid," Nestle says, and it could open up the company to boycotts from consumer activists angry about its hypocrisy. "I suspect we will be hearing much more about this."

The GMO labeling battle is heating up nationwide, with more than a dozen states considering legislation, including Oregon, which has a ballot initiative in November. A month after the Vermont law was signed, the Grocery Manufacturers Association (GMA) -- a food-industry trade group representing more than 300 companies, including Coca-Cola (KO), Nestlé (NSRGY) and Unilever -- sued Governor Shumlin and other state officials to block the labeling requirements, which take effect in July 2016. 

In response to the lawsuit, the Organic Consumers Association, a Minnesota-based advocacy group, has renewed an earlier boycott of the "traitor" brands, as it calls them, whose parent companies are GMA members. Ben & Jerry’s, along with Kellogg's (K) Kashi cereal and PepsiCo's (PEP) Naked Juice, is on OCA's list of traitors. So far that hasn't hurt B&J's sales, which rose 6.2 percent to $594 million in the U.S. for the 52 weeks ended June 15, according to data tracker IRI.

Rather than downplay the conflict with its British-Dutch corporate owner, Ben & Jerry's has basked in it, donating about $5,000 to the state's legal defense fund and pledging on its website to fight what it calls the "powerful corporate interests" who oppose "honesty in food." Unilever says state labeling laws are costly and complex, echoing food-industry lobbyists who call GMO labeling a fad that violates free speech.

"If it's a fad, then why have over 60 countries around the world adopted it?" Solheim asks. "I don't think it's a fad that people want to know what's in their food. If you believe in a consumer's right to know, you have to promote that belief. You can't not take a stand."

Ben & Jerry's has never shied away from speaking out on social issues, and Unilever, since acquiring the company in 2000, has not interfered. Since 1985, Ben & Jerry's has donated a portion of its profits to community projects across the U.S. In 1996 the company sued the city of Chicago and the state of Illinois for the right to label its products as free of recombinant bovine growth hormone, which is given to cows to boost milk production. A condition of Unilever's acquisition was that Ben & Jerry's would have a separate board of directors not chosen by its owner.

The maker of Chunky Monkey and Phish Food is not the only feel-good brand whose outspoken views might make its parent nervous. Organic beverage maker Honest Tea, owned by Coca-Cola, is, along with Ben & Jerry's, a member of the "Just Label It" campaign, which advocates for mandatory GMO labeling nationwide. Honest Tea founder Seth Goldman, who declined to comment for this story, said in a 2012 blog post that "there are bound to be moments when our enterprise does not share all of the same ideas as our parent company. But there's never been any pressure to compromise."

Solheim, a Norwegian who joined Unilever in 1991 and became Ben & Jerry's CEO in 2010, says Unilever respects the brand's GMO labeling push. "Obviously, there have been some bumps in the road, but our relationship is very productive," he says.

One out of three consumers intentionally avoids genetically modified ingredients, up from 15 percent in 2007, according to the Hartman Group, a trend tracker. The U.S. Food and Drug Administration has rejected calls to mandate GMO labeling but allows foodmakers to volunteer on packaging whether foods don’t contain GMOs. More than five dozen countries require such labels.

Avoiding GMOs isn't easy. More than 80 percent of the soybeans and corn grown in the U.S. in 2013 came from genetically engineered crops, according to the Department of Agriculture. About 75 percent of the foods Americans eat contain GMOs in some form.

Big foodmakers argue that GMOs are safe and reduce the price of food crops by as much as 30 percent.

Most supporters of labeling don't question the safety of GMOs -- the most influential regulatory agencies and organizations that study the safety of the U.S. food supply have found the ingredients to be safe.

They say simply that consumers have a right to know what's in their food.

Unilever says it opposes state-by-state labeling laws because it could require unique packaging for each state, complicating production and increasing costs, according to Unilever spokeswoman Anita Larsen. Those costs could get passed on to consumers. The GMA and other labeling opponents estimate that such laws could drive up a family’s annual food bill by as much as $500.

Voters rejected labeling in ballot initiatives in California in 2012 and in Washington in 2013. Unilever spent $467,100 to help defeat the California proposal, according to data on the Secretary of State's website. It did not contribute to the Washington antilabeling campaign, according to the state’s Public Disclosure Commission. 

Unilever's choice to stop funding antilabeling efforts was a business decision, Larsen says. But Ronnie Cummins, director of the OCA, says Unilever sat out the Washington initiative and has pulled back from its stance on the issue to avoid a backlash against Ben & Jerry's.

Unilever sees no problem between its opposition to the laws and Ben & Jerry's support for them, Larsen says. B&J's position on labeling long predates its acquisition, she says. Unilever does not oppose GMO labeling in countries that require it.

"It's fascinating to see how Unilever deals with these two big competing interests," says Paul Argenti, a professor of corporate communications at Dartmouth University's Tuck School of Business. "You have social responsibility and the demands of non-GMO advocates vs. a business that is in operations across a variety of products, some of which cannot be as responsible as the others."

More from Businessweek

Aug 1, 2014 2:25PM
If it reduced crop prices by 30 %; why did we get screwed paying more for less? 
Aug 1, 2014 1:17PM
I think Unilever is better off allowing Ben & Jerry's to make their own decisions. While it may seem strange to have conflicting opinions within the same company, if they try to change Ben & Jerry's it will damage the brand much more than it will help the image of Unilever.
Aug 1, 2014 2:57PM
The main problem I have with GMO's is that the genes don't tend to stay where they are put.   It is very difficult for heirloom corn growers to find corn that is not crossed with Monsanto's GMO corn.   GMO is, at best, not totally proven safe.   I hear some say that we have been manipulating plants for thousands of years and that is true, but, there is a difference between cross breeding and artificial genetic manipulation.  It is like the difference between making bronze and making plutonium. 
Aug 1, 2014 1:31PM
From my ice cold spoon and dead hands.Maybe we should outlaw long eared hounds, Huckleberry. 
Aug 1, 2014 1:29PM
Maybe one day I'll be proven wrong, but I don't see GMO as a big furry problem.  My grandfather was a geneticist and crossbred all kinds of crops and livestock to increase yields, how is this any different.

I think it's the same people who think vaccines cause autism.  Science is a good thing.
Aug 1, 2014 3:34PM

Remove the GMO's but keep the crappy powdered chinese sourced milk in your ice cream. Way to go B&J. I'll pass.

Aug 1, 2014 2:07PM
i see the big money is  not going onto the weekend with another big  loss  love to watch millionaires and billionaires  manipulate the  markets
Aug 1, 2014 3:25PM
Seems the states are going to have to look out for the people since the Federal govt refuses to.
Aug 1, 2014 4:23PM

Just Label the darn foods already failure to do is a deceptive practice by Food Corporations.

Will I boycott a manufacturers foods due to GMOS and Lack of labeling---Absolutely and I already do!

Aug 1, 2014 5:13PM
Thank you Cherry Garcia and Chunky Monkey!  Everything which you consume in your body should be no noted on the labels for  the foods you purchase.  If agricultural products have been genetically modified, (whether you believe it is harmful to one's health or not), it should be so stipulated.  Some people are concerned about what they ingest in their bodies and it is only just that they know what is in the products they consume.  Since we have all the nutritional information on most products, what is the harm of adding if there is GMO corn syrup in the B&J ice cream?
Aug 1, 2014 5:55PM
GMOs are proven to be far less nutritious and to permanently change the biology of your digestive system. We won't know until maybe 30 years from now if it causes cancer, premature aging, heart disease, or whatever else - we don't know, it's a pure risk. And be aware -- Ben and Jerry's is just support LABELING GMOs. They are not trying to eliminate them. Just label them so the public can make up their own minds. It's the dishonest corporations like Coca Cola and Monsanto who don't want you to know and not let you make your own decision. 
Aug 1, 2014 5:30PM
Unilever if you DONT start playing nice, and that goes for all US companies i will nail you to the wall. just from a friendly neighbor down the street. its biblical, the gross profiteering that goes on especially here in the united states of america, why don't you think i can work anywhere. BABYLON....
Aug 1, 2014 4:24PM
we need to go back to the good old days... 1890 when insects were every where and ate all the crops... then these will be the good old days.....  we need less chemicals and more crops dying in the field.  Natural is better - we don't need to pollute the land with chemicals.  My great great grand father didn't need them to feed the town of 127 that he lived in and by god - we don't need them today.  Getting more food out of an acre is just plain voodoo.  Now - go do that Voodoo that you do so well.........
Aug 1, 2014 3:58PM
What doesn't kill me only makes me strong.
Aug 1, 2014 2:05PM
Like most hippies Ben and Jerry eagerly take their parent (companies) money but then want to whatever they want, which usually includes preaching to the rest of us.
Aug 1, 2014 1:20PM
We need to outlaw ice-cream hyped food establishments anyway, they only add to Americas' fat problems that cause all kinds of long term health issues. Only makes more Obamacare clients.  
Aug 1, 2014 2:42PM
The noise about genetically modified foods is hypocrisy in my opinion. There isn't a single form of food on our table that hasn't been 'genetically modified'. Ever eaten a real "wild' apple? How about beef from a 'natural' cow? Humankind has been using genetic modification to customize their food, pets, and surroundings (and yes artificial pollination, cross-breeding for stock characteristics and similar techniques ARE genetic modification tools). So lets make it simple, EVERY package of food has to say on it's label that it contains genetically altered materials.
Aug 1, 2014 3:17PM
The vast majority of people against GMOs have no idea what a GMO is and definitely can't tell you what about them is bad. But that won't stop them from blabbing on their crazy conspiracy theories about Monsanto. Read a book people.
Aug 1, 2014 2:53PM
Aug 1, 2014 2:37PM

Yea....take the country back from the anti-American socialist pigs, aka Republicans.

All cons are socialistic in nature, they just lie about it:

Privatize wealth, but socialize the cost of business is their mantra.

The Republicans lied to us about Benghazi and the IRS in order to fundraise off stupid people.

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