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What is the purpose of companies?
For the last half-century, businesspeople have had an easy answer, handed to them gift-wrapped back in 1970 by Milton Friedman. The purpose of a company, the economist wrote, was to make money for its shareholders. If it did that, like a shark focused on hunting, it would be working efficiently, totally focused on the one thing it was made to do.
But like so many of the certainties of capitalism—”healthy economies are those that grow”; “striving for success is the goal of every worker”—this definition is being called increasingly into question. Now the heads of companies, from BlackRock in finance to Danone in food, are calling on business to help solve some of the modern world’s biggest problems: climate change, inequality, and intractable poverty.
There’s a problem, though. It’s easy to make peripheral changes to a business model, and hard to make big ones. What about when principle curbs profit, gets a company criticized in valued markets, or sours shareholders it wants to keep sweet?
This week saw a particularly stark example of purpose meeting what might be termed practicality—and losing. The company in question: Ben & Jerry’s, the “mission-driven” ice cream company that was bought by Unilever in 2000, but that retains an independent board. A federal judge ruled against Ben & Jerry’s, refusing to grant an injunction against the sale of the franchise’s ice cream business in Israel.
It was a test case: Could a small subsidiary really stand up to the might of its parent? The answer appears to be: No. The halo that Unilever has been polishing through its acquisition of “ethical” brands has been tarnished as a result. When push comes to shove, it appears, principles lose out to profit. All those other smaller, mission-driven companies building their businesses will be watching and wondering: In the future, will they be able to sell, without selling out?
THE BACKSTORY
In July 2021, Ben & Jerry’s announced it would stop selling ice cream in the Occupied Palestinian Territories. The decision, they were careful to note, was not a protest against Israel per se—in other areas of the country, the dessert would still be available. The founders of Ben & Jerry’s are Jewish, they noted, and do not believe their protest to be antisemitic.
Unilever, Ben & Jerry’s parent, came in for criticism from Israel, where it sells many other products, and from some shareholders. A year after Ben & Jerry’s took its position, Unilever announced that, to get around the problem, it was selling Ben & Jerry’s in Israel to the local distributor, which would market it in exactly the same way as before, save for a change to Arabic and Hebrew names.
This past July, Ben & Jerry’s filed a suit to stop as much of the sale as possible. (Much was already complete.) The pay of the ice cream maker’s independent board was frozen in retaliation, its lawyers said. Out-of-court mediation collapsed. This week, a New York judge rejected Ben & Jerry’s suit, saying it hadn’t proved either that it had suffered “irreparable harm” or that its customers would be “confused.”
FLAVOR BOMBS
Ben & Jerry’s frequently expresses its politics in the form of limited-edition ice creams. Here’s a look at some its flavorful forays into social and environmental causes over the years:
🐒“Rainforest Crunch” (1988): Meant to support indigenous nut cooperatives and protect the Amazon rainforest; famously fails to deliver on its political premise.
🇺🇸 “Yes Pecan!” (2009): Proceeds from “Yes Pecan!”—a pun on Barack Obama’s campaign tagline—go to the Common Cause Education Fund, which encourages US citizens to participate in politics.
🌎 “Save our Swirled” (2015): The “Save Our Swirled” flavor supports climate change action at the Paris Agreement talks that year.
🙅♀️ “Pecan Resist” (2018): “Pecan Resist” protests the impact of US president Donald Trump’s policies on women, immigrants, people of color, and the environment.
✊🏿 “Change the Whirled” (2021): Football player and racial equality activist Colin Kaepernick helps create the vegan flavor “Change the Whirled.”
☕ “Change is Brewing” (2021): The “Change Is Brewing” flavor features coffee, brownies, and art by Black-owned businesses in support of US representative Cori Bush’s legislation for police reform.
🍫 “Chocolatey Love A-fair” (coming in 2023): A new flavor created in partnership with chocolate company Tony’s Chocolonely, to promote the “mission to end modern slavery in cocoa farming.”
BUSINESS AS UNUSUAL
Unilever is not the only multinational company to do business in the Israeli settlements. In 2020, the United Nations Human Rights Office created a list of 112 firms operating in the Occupied Palestinian Territory, including US-based companies Airbnb, Expedia, General Mills, Motorola, and TripAdvisor.
Airbnb had actually announced, back in 2018, that it would stop listing properties located in the settlements. The following year, facing an onslaught of lawsuits in the wake of the decision, it reversed course. The company said it will not profit from the listings, donating proceeds to humanitarian aid organizations.
Amnesty International has criticized Airbnb, Expedia, and TripAdvisor for legitimizing human rights violations by supporting tourism in the settlements.
General Mills, meanwhile, sold its majority stake in the Pillsbury dough factory based in the West Bank this past June. The decision followed a boycott of Pillsbury products, which was supported by some members of the Pillsbury family.
ONE 🪖 THING
Another prong of Ben & Jerry’s politics, over the years, has been its staunch criticism of NATO’s expansion in Eastern Europe—a position the ice cream company maintained even earlier this year, after Russia invaded Ukraine. Ben Cohen, one of the eponymous co-founders, once took out a full-page New York Times ad, accusing US defense contractors of lobbying hard for a NATO expansion that was really a “$60 billion boondoggle.” For NATO to push up so aggressively against Russia, Cohen said in an interview, was akin to Ben & Jerry’s trying to drive Haagen-Dazs out of business—even if Haagen-Dazs stopped selling ice cream and started selling hot dogs instead.
QUARTZ STORIES TO SPARK CONVERSATION
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- Does California have enough electricity to ban gas cars?
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- Chicken wings, defying inflation, have fallen in price by half in a year
5 GREAT STORIES FROM ELSEWHERE
⚖️ The juggernaut. Jones Day, a law firm founded in Ohio in 1893, is massively influential already in its litigation work, defending companies that sell guns, opioids, and oil. But more recently, it has built a practice to help Republicans win elections, and it has advised the Trump administration in its federal judge picks. The effects of Jones Day’s work on this front are fast becoming visible in the Supreme Court’s rightward turn, and in the rungs of Republican power. “The next Republican presidential administration,” the New York Times Magazine writes, “will most likely be stocked with Jones Day lawyers.”
💎 Charming NATO. For years, NATO officers posted in Naples encountered Maria Adela Rivera, a socialite who ran her own jewelry and luxury business. Rivera was Peruvian, but she had Russian connections: Her adoptive mother lived in Moscow, and her husband was part-Russian. Only after Bellingcat revealed, in 2018, that her passport was one of a sequence used by Russian agents did it emerge that Rivera had been spying for the GRU the whole time.
🍼 Sticking to formula. In February, tens of millions of baby formula cans were recalled from the market. A particular kind of bacteria in some of these cans had been making children sick, and an inspection of the Indiana factory run by their manufacturer, Abbott Laboratories, found bacteria samples on site. A BusinessWeek investigation tells the complicated story of this fiasco, involving a disgruntled whistleblower, a factory with a track record of problems, and a questionable work culture.
💲 Private iniquity. In 2019, when St. Joseph’s Home for the Aged, a tidy, cozy nursing home in Virginia, put itself up for sale, it was flourishing. No one bought it, though, until 2021, when a New Jersey private equity firm named Portopiccolo Group added it to its portfolio of care facilities. Within two weeks, staff cuts had been planned, the name was changed, the aviary and aquarium disappeared, and residents started eating alone in their rooms. And a home that had kept covid deaths down to zero saw 17 infections and six deaths in just four months under Portopiccolo—an example, as the New Yorker explains, of the way private equity firms think about their investments in the care sector.
😵 The murder that wasn’t. For 20 years, Manuel Ramirez sat in a Mexican jail, imprisoned for the murder of a man he insisted he didn’t kill. Then he was released, his sentence commuted but his record as a criminal still intact. But was his supposed victim even really dead? Nothing is quite as it seems in the Economist’s account of the travails of Ramirez.
Have a sweet, sweet weekend with a cherry on top,
—Cassie Werber and Sarah Todd, senior reporters for Quartz and Quartz at Work
Additional contributions by Alex Citrin-Safadi and Samanth Subramanian