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Ben & Jerry’s has an independent board, despite being owned by consumer-goods giant Unilever.
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Another week, another controversy over a company speaking out on a contentious issue. This time it’s ice-cream brand Ben & Jerry under fire after calling for returning land in the U.S. to indigenous communities.
Critics of the message—tweeted out by Ben & Jerry’s on July 4—called for a boycott of the brand and drew parallels with the backlash against Bud Light. However, investors in Ben & Jerry’s parent company
Unilever
(ticker: UL) shouldn’t be too worried- the relative size of the ice-cream business and its long history of corporate activism should protect its owner from any reputational fallout.
Firstly, it’s worth noting how small Ben & Jerry’s is compared with
Unilever
overall. Ben & Jerry’s was reported by Reuters to be worth more than $1 billion last year. Unilever’s market value is around $131 billion.
Bud Light was the top brand for parent company
Anheuser-Busch InBev
(BUD) prior to the backlash that came after its partnership with transgender social-media personality Dylan Mulvaney. Analysts have questioned whether the stock drop was overdone. Unilever, which has a portfolio tilted toward emerging markets, should be able to shrug off a potential U.S. backlash relating to a small part of its portfolio.
Secondly, the Ben & Jerry’s tweet is unlikely to alienate the ice-cream brand’s core audience. Bud Light’s advertising angered some customers in rural and conservative parts of the U.S., which are particularly important for the brand. By contrast, Ben & Jerry’s customers are already used to its long history of advocating for progressive social causes.
That doesn’t mean Unilever is always comfortable with the messages put out by Ben & Jerry’s, which has an independent board, part of the deal made when the business was acquired in 2000. Unilever and Ben & Jerry’s even faced each other in court last year over the sale of the ice-cream brand’s Israeli business, before the litigation was subsequently resolved. But Unilever management is unlikely to panic about a Bud Light-style backlash over a single tweet and investors shouldn’t either.
American depositary receipts of Unilever were down 1.1% on Thursday. Unilever and Ben & Jerry’s didn’t immediately respond to requests for comments from Barron’s on Thursday.
Write to Adam Clark at adam.clark@barrons.com
