A Melting World: Ben & Jerry’s in the Age of Climate Change

Ben & Jerry’s is actively speaking out to mitigate the impacts of climate change on its supply chain and our world. But are these impacts truly all detrimental to the company?

Save Our Swirled

Half BakedCherry GarciaPhish Food.  Are you hungry yet?  For the last 38 years, Ben & Jerry’s has been known for its premium ice creams.  It’s also been a recognized early-mover in corporate social responsibility[1] with a mission statement incorporating sustainability.

3partmissnbox2015-piechart[2]

Climate change has been one key focus area for the company in recent years.  In fact, the company released a Save Our Swirled flavor and an advocacy campaign to inspire their fans to push for climate change action.

Is CSR the Only Reason Ben & Jerry’s Cares About Climate Change?

No.  As the ingredients in its ice cream are derived from agricultural sources, climate change threatens to disrupt the company’s supply chain.

Ben & Jerry’s has placed several flavors on its “Endangered Pints List”[3] because they rely upon ingredients such as cocoa and nuts that grow in areas threatened by climate change.  For instance, the amount of land suitable for cocoa cultivation in Ghana and Cote d’Ivoire (together representing 53% of world cocoa production) is expected to decrease meaningfully by 2050 due to rising temperatures and drought conditions:

suitability[4]

Other ingredients are indirectly affected, such as dairy.  In the US, rising temperatures are expected to drive increased heat stress among cows, lowering milk production by 6% by 2080 if all other factors in milk production stay equal.[5] While this effect is relatively moderate, it is likely to affect the competitiveness of family farms, which lack sufficient capital to pursue breeding programs or other initiatives that could reduce the production losses.[6]  As Ben & Jerry’s currently relies upon family farms for its milk[7], the company may eventually need to alter its supplier mix or pay more for their milk to continue sourcing from family farms.

How is Ben & Jerry’s responding?

External actions: As discussed above, the company has launched a global awareness-raising campaign against climate change.  Their website also has a call to action for fans, asking them to sign a petition to pressure legislators to act on the issue and lobby for change alongside Ben & Jerry’s.[8]

Internal actions: Ben & Jerry’s recognizes that they can’t just demand others to act to prevent climate change; they also need to control their own impact on the environment.  The company has taken several measures to limit their negative externalities on the planet.  For instance, in 2015 they strengthened their Caring Dairy program, which establishes some of the highest standards for the dairy industry.[9]  One such standard is that supplier farms must participate in an environmental monitoring program.[10]

So climate change is a clear-cut problem for Ben & Jerry’s, right?

Actually, it’s not that simple.  While Ben & Jerry’s is certainly taking a noble stance in the fight against climate change, they’ve failed to acknowledge one salient issue: when it’s hotter, people eat more ice cream. 

Depending on the time of year, each incremental °C can translate to 5-10% of additional ice cream sales[11].   Climate change could actually present untapped profit opportunities for Ben & Jerry’s.

Is the company making the right move in pushing so hard against climate change, then? 

From a purely revenue and cost analysis, the answer depends on the expected cost to the company of supply chain disruptions vs. the margin uplift from a climate-driven ~10-20% increase in sales by 2050 (given that global temperatures are expected to increase by approximately 2°C if no additional mitigation efforts occur).[12]

Yet even if those effects could be accurately quantified, there would still be further unknowns from just an economic standpoint.  Specifically, demand for Ben & Jerry’s products may increase over time because of the positive PR from their sustainability mission.  66% of global consumers say they are willing to pay more for products that come from companies that are committed to positive social and environmental impact, up from 50% in 2013[13].   If these trends continue, Ben & Jerry’s may improve their profitability more by staying true to their mission against climate change than by benefiting from its warming effects, but it’s impossible to quantify all the relevant parts of the puzzle.

But here’s the thing: regardless of whether climate change could be profitable, it isn’t going to matter to this values-driven company.  Ben & Jerry’s has considered sustainability a core value throughout its history, and it isn’t about to stop now.  Enjoy your Chunky Monkey in good conscience!

(784 words)

 

 

 

[1] (Murray, 2015)

[2] (2014 Social & Environmental Assessment Report, n.d.)

[3] (Flavors We Could Lose to Climate Change, 2016)

[4] (Läderach, Martinez-Valle, Schroth, & Castro, 2013)

[5] (Bauman, Mauger, Nennich, & Salathe, 2014)

[6] (Bloudoff-Indelicato, 2012)

[7] (Stillman, 2016)

[8] (Ben & Jerry’s, n.d.)

[9] (Ben & Jerry’s, 2016)

[10] (Ben & Jerry’s, 2016)

[11] (Créhalet, Bertrand, & Fortin, 2013)

[12] (Henderson, Reinert, Dekhtyar, & Migdal, 2016)

[13] (Nielsen, 2015)

 

Bibliography

2014 Social & Environmental Assessment Report. (n.d.). Retrieved from Ben & Jerry’s: http://www.benjerry.com/about-us/sear-reports/2014-sear-report

Bauman, Y., Mauger, G., Nennich, T., & Salathe, E. (2014). Impacts of Climate Change on Milk Production in the United States. The Professional Geographer.

Ben & Jerry’s. (2016). 2015 SEAR Report. Retrieved from Ben & Jerry’s: http://www.benjerry.com/about-us/sear-reports/2015-sear-report

Ben & Jerry’s. (2016). Caring Dairy US Standards – 2016. Retrieved from Ben & Jerry’s: http://www.benjerry.com/files/live/sites/systemsite/files/our-values/how-we-do-business/caring-dairy-V2-standards-for-web-apr-13-2016.pdf

Ben & Jerry’s. (n.d.). Climate Justice. Retrieved from Ben & Jerry’s: http://www.benjerry.com/values/issues-we-care-about/climate-justice

Bloudoff-Indelicato, M. (2012, August 6). Rising Heat and Humidity Could Cut Dairy Production. Retrieved from Accuweather: http://m.accuweather.com/en/outdoor-articles/farming/rising-heat-and-humidity-could/69120

Créhalet, E., Bertrand, J.-L., & Fortin, M. (2013). Demystifying Climate Effects. Kepler Cheuvreux.

Flavors We Could Lose to Climate Change. (2016, September 6). Retrieved from Ben & Jerry’s: http://www.benjerry.com/whats-new/endangered-pints

Henderson, R. M., Reinert, S. A., Dekhtyar, P., & Migdal, A. (2016). Climate Change in 2016: Implications for Business. Cambridge: Harvard Business School.

Läderach, P., Martinez-Valle, A., Schroth, G., & Castro, N. (2013). Predicting the future climatic suitability for cocoa farming of the world’s leading producer countries, Ghana and Côte d’Ivoire. Climatic Change.

Murray, J. H. (2015, June). Ben & Jerry’s Struggles with Corporate Social Responsibility in an International Context. Journal of Legal Studies Education. Retrieved from http://dx.doi.org.ezp-prod1.hul.harvard.edu/10.1111/jlse.12029

Nielsen. (2015, 11 5). Green Generation: Millenials Say Sustainability is a Shopping Priority. Retrieved from Nielsen: http://www.nielsen.com/us/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html

Stillman, M. (2016, August). Visit to Ben & Jerry’s Factory. Vermont, USA.

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23 thoughts on “A Melting World: Ben & Jerry’s in the Age of Climate Change

  1. I really enjoyed this article. Hotter weather does equal more ice cream, so it is interesting to think about the different incentives of a company like Ben and Jerry’s. Also, it surprised me that they still source most of their milk from family farms, since they are now owned by Unilever. While it is clear that Ben and Jerry’s does care about the environment, they still put consumer demand first. Earlier this year they released non-dairy ice cream made out of almond milk (http://www.benjerry.com/flavors/non-dairy). While this allows them to not rely on milk as an input, almonds are not environmentally friendly either. California produces 99% of the almonds in the United States, and has experienced a serious drought in the last few years. One almond requires 1.1 gallons of water to produce, making it not a very environmentally friendly input either (http://www.motherjones.com/environment/2014/02/wheres-californias-water-going). Perhaps Ben and Jerry’s will try making ice cream out of hemp milk next?

  2. I found this post interesting in a sense that BJ’s inherently benefits from global warming because people will eat more ice cream.
    While BJ’s seems to be taking action in the advocacy area for climate change, perhaps they could take action themselves. For example, would it make sense for the company to be involved in cocoa restoration projects in Africa?

  3. Very interesting insight regarding rising demand and temperatures- making your original questions about whether their efforts are just green-washing or truly actions that are well intended. I wonder whether the ice cream industry can even be sustainable / avoid effects of climate when livestock contribute to 18-51% of all greenhouse gas emissions (depending on which study is used- see article below). This in effect renders the whole industry incredibly harmful. To Roanna’s point above- what alternatives exist?

    http://www.new-harvest.org/the_world_s_leading_driver_of_climate_change_animal_agriculture

  4. Super informative article! I must admit when I saw the title of this blog post I initially thought you would be covering the topic from pure CSR perspective. I’m actually quite surprised that “66% of global consumers say they are willing to pay more for products that come from companies that are committed to positive social and environmental impact.” Given the positive sentiment around sustainability initiatives, I believe Ben & Jerry’s can do more on the external actions front to shape consumer behavior. If Ben & Jerry’s truly wants to walk the walk, it needs to move beyond awareness campaigns where 100% of the onus is on the consumer, and instead build real incentives into its business model.

  5. If you think about it, it’s very interesting to associate ice cream with the initiative against global warming. The warmer it gets, the more ice cream Ben & Jerry would sell. However, if putting myself into shoes of Ben & Jerry, I would definitely see the connotation of its Climate Movement – getting to the root issue before it impacts negatively on raw material sourcing (cocoa). I think we can also expect more to be done on the produce end – can the packaging of ice team be eco-friendlier? Can Ben & Jerry reduce the volume of Greenhouse Gas emitted from the cooling system during its transportation? Now that Ben & Jerry is part of Unilever, one of the biggest Consumer Goods companies worldwide, can it better capitalize the company & brand assets to be an active ambassador from private sector to push for government regulations?

  6. What struck me most in this post is the idea that climate change can also affect the output/yield of livestock (e.g., through dairy or even meat supply). Given that animal products are a key component in most diets, especially in the Western Diet, the effects of climate change may be even worse than currently anticipated. For example, if dairy cows cannot get sufficient food supply due to droughts, and are impacted by higher temperatures, then their milk supply decreases, which in turn affects so many different consumer-product companies. The implications of livestock affected by climate change are vast, and I am not certain to what extent this is currently included in conversations around climate change. I wonder to what extent companies will begin to include this into the conversations around climate change and sustainability.

  7. Great post! I didn’t realize that even ice cream companies could be impacted by global warming! It is fascinating that B&J could also benefit from global warming. However, as you pointed in your article, customers tend to spend more with companies who are socially conscious. Therefore, on an overall basis, isn’t it more beneficial for the firm to take a socially responsible approach? I also think that B&J is trying to create a brand that takes a stand, similar to what Dove did, in order to differentiate themselves from competitors. However, as other ice cream companies start to do the same I wonder if B&J will continue to spend as much on this effort.

  8. It’s hard to read this without a bowl of ice cream in my hands! Ben & Jerry’s is also one of the few companies that utilizes an internal carbon tax (http://www.benjerry.com/values/issues-we-care-about/climate-justice/internal-carbon-tax), the proceeds of which will presumably go towards one of their environmental initiatives.

    What I’m really interested in is the relationship between Ben & Jerry’s and Unilever, as KZ pointed out. Ben & Jerry’s does maintain an independent board, which I think enables them to make an authentic push for these initiatives, without selling out to a big corporation. And they play a more vocal role in the parent company’s actions than other brands might (http://www.nytimes.com/2015/08/23/business/how-ben-jerrys-social-mission-survived-being-gobbled-up.html?_r=0). However, as we found out in the Dove case, any conflict of interest or hypocrisy between Unilever brands can create bad press – it would be interesting to see how Ben & Jerry’s protecting themselves from this!

  9. Awesome post! I certainly scream for ice cream and Ben & Jerry’s offers a fabulous model for what a business with a deep commitment to social impact can accomplish. I for one, am skeptical that anything about their supply chain is driving their efforts in this area, rather I think they see this as an important global issue, they want to be on the right side of history, and it aligns with their customer promise. Given that the brand has been owned by Unilever for more than a decade and a half now, I wonder to what degree the focus on sustainability has filtered out to the rest of the conglomerate. Is the parent company more broadly committed to addressing climate change, or is it using Ben and Jerry’s responsible reputation to achieve a halo effect for the rest of the company?

  10. This was a very interesting post that explored both sides of whether or not B&J’s should support climate change initiatives. From their website it appears that B&J’s also contributes $1.1 million annually to various nonprofits and community groups through employee led corporate philanthropy (https://www.unileverusa.com/brands/our-brands/ben-and-jerrys.html).

    I thought you made an excellent point that “66% of global consumers say they are willing to pay more for products that come from companies that are committed to positive social and environmental impact.” However, I think it would be interesting to see whether consumers actually act this way in practice. For one, consumers may not know about B&J’s (or other companies) philanthropic missions. Even if consumers are aware of these missions they may not remember them at the point of sale when they are differentiating between two competing products. However, it seems possible that corporate philanthropy also serves to boost employee morale and retention rates, particularly at a company like B&J’s that has an employee led giving program.

  11. Thanks for writing – I spent a summer scooping ice cream for a competitor of Ben & Jerry’s, so this is a topic that was really fun to read about! It was really interesting to see how proactively Ben & Jerry’s is thinking about ingredients likely to be impacted by climate change with their ‘Endangered Pints’ list. Beyond their lobbying and ‘Caring Dairy’ program, I’d love to hear more about Ben & Jerry’s production process and materials – how do they think about the sustainability of the materials they use to manufacture and serve ice cream? Are there more active steps they should be taking?

  12. It is extremely interesting to see the case that company could both benefits and harmed by climate change. It is even more interesting to see which side that company took. For Ben & Jerry, I personally believe they will gain more on revenue from the global warming. It is a lot easier to control ingredient or the components but natural boost in revenue is rather hard to come by. The boost in revenue from the awareness of the initiatives against global warming will be much lower than the increase in temperature simply because everyone will feel the rise in temperature but not everyone will hear about Ben & Jerry’s effort. This very fact made me feel very impressed with the choice the company made. Clearly they truly care and you just gave me more reason to enjoy Ben & Jerry’s ice cream!

  13. This was a really good read- interesting, engaging, well written and about a very friendly topic!

    While your argument is interesting, I’m still not entirely convinced that Ben & Jerry’s CSR is not just a marketing tool to engage the environment-conscious millennial right now. I want to research the website at risk of craving a big bowl of ice cream right now! It would be interesting to know if the petitions and lobbying efforts on their website have led to actual change, maybe not just in dairy farms in the US, but even further from home- for example, if the Ghana and Cote d’Ivoire governments have been pushed to restore/replenish/maintain the cocoa-growing land in their countries. It would be even more interesting and encouraging to see Unilever use its power and unite other companies who own cocoa-dependent brands, and lobby for major change in sustaining cocoa plantations despite climate change. Do you have any data on results? Let’s hope that the future of chocolate and ice cream is safe!

  14. Great post! I love that you highlighted a company which has historically been very socially responsible. It is always nice to reinforce businesses that focus not just on profits, but also the impacts its product has on the world / end consumer. While I was not surprised by the positive PR impact that climate change action would have for Ben and Jerry’s, I am surprised that as you state, “66% of global consumers say they are willing to pay more for products that come from companies that are committed to positive social and environmental impact, up from 50% in 2013.” I would love to see this quantified, however. Is it just that consumers want to support a great cause, but would actually change their behavior in response to higher prices? I know we don’t have it, but I would be curious to see the elasticity of demand for Ben and Jerry’s customers. This would have very important implications for the team at Ben and Jerry’s!

  15. This is a great post! One pushback I have on this is that a lot of their initiatives are focused on their supply chain and are not very inward looking. Ellen touched upon this in her comment when she wanted to know more about the sustainability of the products they use in the production process, but I would like to push this a step forward and ask if they have taken any measures on their manufacturing plant? I presume the manufacturing process relies on large energy usage. Have they made any moves to make their plants eco-friendly such as relying on solar panels? It is great to make their suppliers green, but it would be the pot calling the kettle black if they did not do their part to not contribute to the problem with their production plants!

  16. It was very interesting to read about a Ben & Jerry’s and their dedicated approach to tackling climate change, especially since they are not one of the contributors to the climate change problem. It was admirable how the company has remained focused on the issues throughout the years, despite its original lack popularity. Their “endangered pints list” was one of the most clever methods of educating consumers that I have read about.

    From a revenue perspective, I think its a bold assumption to assume that ice creams sales will go up with climate change. In 2004, the U.S. Defense Department released guidance on their estimations of some of the effects of climate change; global instability and conflict being some of the major outcomes (http://www.defense.gov/News/News-Releases/News-Release-View/Article/60522). I’m not convinced that the increase in ice cream sales will outweigh the effects of global instability.

  17. As a self-identified ice-cream enthusiast, I found this post super interesting – I’m confident that I’m never considering sustainability initiatives while indulging in my Ben & Jerry’s! I find it truly inspiring that the company is taking great strides to increase awareness about climate change. For example, the article below highlights their “I’m Too Hot” campaign, in which they teamed up with the EPA to encourage others to gather and discuss climate protection. This initiative led me to wonder what the impact would be if more companies took these kinds of outward, interactive actions to actively engage with consumers and the general population about the inherent risks of climate change…

    I am left curious about what actions the company is taking to combat the risks you have highlighted posed by the inevitable threat to sustainable supplies of cocoa and nuts. Although I like that Ben & Jerry’s has acknowledged the risks relating to their ‘Endangered Pints’, as the end consumer, I am more worried about what they are doing to slow or even potentially reverse the existence of this list in the future – life without Phish Food would almost not be worth living!

    https://www.climaterealityproject.org/press/climate-reality-project-partners-ben-jerrys-serve-climate-truth

  18. Great post – thanks Andrea! The effect of climate change in the cultivation of cocoa in Ghana and Ivory Coast is one that interests me a great deal. It’s great to know that Ben & Jerrys has established standards for their supplier farms. Does this apply to Ghana and Ivory Coast? I am curious as to what the exact standards are and how they are ensuring that these are implemented and measured? How closely do they work with these farmers? I imagine it would be a lot more difficult to ensure that certain best practices are being used to mitigate these emerging countries’ exposure to climate change.

  19. Thanks for posting about Ben & Jerry’s, Andrea. As a frequent consumer of the product, I am quite interested in how their mission of sustainability is evolving as global climate change occurs. Namely, I found the correlation between increased temperature and increased ice cream consumption to be very intriguing. Although hotter temperatures may promote ice cream consumption, I never considered how this relationship may be at odds with Ben & Jerry’s mission. I wonder if the company could transition into less dairy-intensive bases for their frozen treats i.e. sorbet, or coconut milk?

  20. This is a nice article that puts both sides of the climate perspective out there. On one hand, BJ depends on agriculture to sustain some of its flavors, but on the other hand, the effects of climate change actually drive sales. In situations like this, I always wonder: are the CSR activities these companies are into truly a reflection of their beliefs? Or are they buffers to safeguard against potential claims from third parties of their adverse effect on the environment?

  21. Thank you for a very insightful article. This case reminds me of the Ikea case we read in class, in particular the concept of setting environmental standards for its suppliers. I notice that Ben and Jerry’s has been trying to expand into emerging markets. I wonder what policies Ben and Jerry’s have in place to make sure that local and regional suppliers comply with the standards the company has in place. Do you think it would be a great idea if Ben and Jerry’s adopt a similar vertical integration approach to Ikea’s? For example, Ben and Jerry’s could consider operating in the dairy farming business itself.

  22. Nice job with the article! I would like to provide some insight to how Ben and Jerry’s could improve their support for sustainability. In my opinion, Ben and Jerry’s has jumped on the media band wagon to stop using GMO’s in some of their products. The company claims that since they are not scientists, they can’t say if GMO’s are good or bad. never the less Ben and Jerry’s proudly promotes it’s ice cream as non-GMO. My push back is that GMO’s help crops fight against the harsh nature of climate change; for example crops can resist extreme heat and drought. GMO’s –> increased yield –> Ben and Jerry’s supply chain is not disrupted –> ice cream is produced –> consumers are happy!

    http://www.benjerry.com/values/issues-we-care-about/support-gmo-labeling/our-non-gmo-standards

  23. Great post! This is one of the less obvious situations in where a company’s objectives as a business might not be entirely aligned with the overall sentitiment around climate change. Oil companies are the usual suspects of this. What should these companies do? I believe it is great that B&J is campaining for more sustainable practice and creating awareness on the issue, as it shows where their priorities lie. But the situation can become much more blurry for other types of companies, such as oil producers. I believe that unfortunately these companies won’t change their modus operandi until there is a fundamental shift in the market that adds competitive pressure to change. B&J’s does not seem to be exposed to these type of situations.

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