Brain freeze

Ice-cream is a seasonal business. Unless you’re the CEO of Unilever, in which case it’s year-round. Fernando Fernandez, the new boss of the maker of Marmite and Magnum, has inherited a turnaround plan that so far has involved 6,000 job cuts, three chief executives in as many years, and the looming spin-off of its ice-cream unit.

So what? There’s trouble in the frozen section. The independent board of Ben & Jerry’s, the Vermont-based ice-cream brand that Unilever acquired in 2000, has accused the company in US court filings of trying to “silence” the social mission enshrined in its merger agreement and firing its CEO because of his progressive politics.

• Unilever has fired back, saying the board advocated “one-sided, highly controversial, and polarising topics” that put both companies and their employees at risk.
• It’s investigating the finances of Ben & Jerry’s charitable foundation and grants to progressive and pro-Palestinian groups, say people familiar with the matter.
• At the same time, Unilever has faced fierce debate – internal and external – over the primary listing of its demerged ice-cream unit. This includes Ben & Jerry’s and Walls.

Rocky road. Fernandez, the new CEO, was promoted from the position of chief financial officer in March after his predecessor, Hein Schumacher, left after just 18 months. A former senior employee of Unilever described Schumacher’s departure as a “headscratcher”. Another said they were “gobsmacked”.

Despite Schumacher’s “positive performance”, for which the board approved a short-term incentive bonus last year at 122 per cent of target, he was jettisoned with little forewarning in favour of the more hard-charging Fernandez. Sources say the chair, Ian Meakins, “initiated” the decision.

Banana split. Conflict in the Middle East has created ethical and operational challenges for many businesses, but few more so than Unilever. In 2021, the board of Ben and Jerry’s, under the leadership of Anuradha Mittal, announced the company would be ending sales of its ice-cream in the occupied West Bank. When Unilever tried to reverse the decision the board sued and then, months later, settled.

This time the board accuses Unilever of attempting to silence its social mission by

• threatening to dismantle the board and sue the board members individually;
• blocking social media posts supporting Palestinian rights and Black History Month; and
• firing Dave Stever, the CEO of Ben & Jerry’s, without consultation.

Unilever says Stever chose to step down and that it sought “to consult in good faith with the board”. It says the board declined to do so and instead made “the regrettable decision to put confidential career conversations regarding Dave’s future into the public domain”.

Fingers pointed. A person who worked with the independent board previously said Anuradha Mittal, who is also founder of the left-leaning Oakland Institute, is a “troublemaker” and the driving force behind Ben & Jerry’s litigious tilt. The person raised questions about previous donations to the Oakland Institute by the Ben and Jerry’s foundation, although no wrongdoing has been found. Speaking to The Observer, Mittal rejected claims that she had twisted Ben & Jerry’s social mission, saying “refugee rights are refugee rights, never mind where you’re from”.

What next? If nothing changes before Unilever’s ice-cream unit lists later this year, new investors will have a lot to swallow. Chief among their concerns will be the unique and surreal constellation of a board that

• can block product launches and executive appointments by the parent company;
• has no sunset clause and few rules about director tenure; and
• no longer includes Ben & Jerry’s founders.

Ben Cohen and Jerry Greenfield, who sold the brand they founded in 1976 for $326 million, say the two companies have gone “separate ways” and have called on Unilever to “set them free” through a sale. Unilever says Ben & Jerry’s isn’t for sale as a standalone brand.

One scoop please. Ben & Jerry’s has a rich sense of its own history. Visitors to its factory in Vermont can visit the Flavour Graveyard, where some of its wackier concoctions that didn’t sell have been laid to rest. Names include ‘Wavy Gravy’, ‘Turtle Soup’ and ‘Dastardly Mash’.

What’s more… The time has come for Unilever to rethink how best to preserve such idiosyncrasies. The alternative is Ben & Jerry’s could go the same way as ‘Economic Crunch’.