Why Ben & Jerry’s Will Keep Its Progressive Politics After Unilever Divorce

The consumer goods giant said Tuesday it would hive off and likely publicly list its ice-cream business, the world’s largest with annual sales of $8.6 billion and other leading brands including Magnum, Breyer’s and Klondike. Unilever is open to a sale if it gets an offer it deems acceptable.

The move will relieve Unilever of what has been a weak performing division in recent years. Last year the ice-cream category grappled with high costs and—in many big markets—declining sales. It will also rid Unilever of a brand that has taken its parent company on a number of unwelcome detours into the culture wars in recent years.

For Ben & Jerry’s, the divorce from Unilever comes when Americans are already buying less ice cream over rising concerns about sugar and obesity, and more competition from other desserts. The tough economic environment and the growing popularity of weight-loss drugs, which have hit demand for some high-calorie foods, are also concerns.

Those factors, the large size of Unilever’s overall ice-cream business and the cost and complication of needing to operate a sprawling chilled-logistics network will likely limit appetite among would-be bidders for the business, analysts say.

Any buyer, or a new stand-alone entity spun off to Unilever’s shareholders, would also need to abide by the unusual acquisition agreement the company struck back in 2000. That allowed the ice-cream brand to have an independent board that retained decision-making about its social mission.

Under the deal, Ben & Jerry’s owner can’t fire its independent board. That agreement stands even in the event of a sale, according to Jeff Furman, who as the brand’s treasurer in 2000 had to approve the deal in 2000, and served on Ben & Jerry’s independent board for nearly 40 years until 2018.

Ben & Jerry’s said it remained committed to its three-part mission—focused on product quality, profitability and improving society—“regardless of any new ownership structure."

For many years the relationship between Unilever and Ben & Jerry’s was largely positive, even when the parent company didn’t agree with the brand’s stances. The pair tussled over changes to Ben & Jerry’s ingredient quality and an attempt to close a factory in Vermont but managed to settle their differences—quality specifications were agreed on and the factory wasn’t closed. In 2014 the brand was a vocal supporter of mandating labels for genetically modified ingredients, an effort its parent company opposed.

Relations were cordial as recently as 2019, when then Unilever Chief Executive Alan Jope visited the ice-cream brand’s base in Vermont, meeting with founders Ben Cohen and Jerry Greenfield. At conferences, Jope highlighted Ben & Jerry’s as an example of what he wanted many of Unilever’s products to be—a brand that had purpose as its core.

Beneath the surface, though, tensions were bubbling. Ben & Jerry’s had become increasingly vocal following Donald Trump’s election as president.

In October 2018, ahead of the U.S. midterm elections, Ben & Jerry’s launched Pecan Resist, a rebranding of its New York Super Fudge Chunk chocolate ice cream. The flavor was intended to support those “fighting against President Trump’s regressive agenda," the brand tweeted at the time, stirring the ire of his supporters.

The following year Ben & Jerry’s launched “Bernie is back," a cinnamon ice cream it said supported Democratic presidential hopeful Bernie Sanders.

The brand’s foray into U.S. politics made for uncomfortable watching back at Unilever’s London headquarters, with Jope reluctant for brands to dive into issues he saw as being divisive.

That was particularly the case in July 2021, when Ben & Jerry’s halted sales of its products in Jewish settlements in the Israeli-occupied West Bank and contested East Jerusalem, saying selling there was inconsistent with its values.

The backlash was swift and savage. Israel’s prime minister denounced the move, many consumers reacted furiously on social media and some pension funds sold their Unilever holdings. Jewish activist investor Nelson Peltz—who would later win a board seat at Unilever after his firm Trian Partners built a stake in the company—flew to London to press Jope to override Ben & Jerry’s decision.

Unilever found a way through by striking a deal to sell Ben & Jerry’s business in Israel, which allowed sales of the ice-cream brand to continue.

In response, Ben & Jerry’s—in a move virtually unheard of in the corporate world—sued its parent company, alleging Unilever had violated the acquisition agreement that gave the brand full control over its social mission. The two sides eventually settled but tensions have continued.

Most recently, Ben & Jerry’s independent chairwoman complained about Peltz’s presence on Unilever’s board while he also held a position at the Simon Wiesenthal Center. The Jewish organization had urged people not to buy Ben & Jerry’s ice cream after the brand’s chairwoman denounced Israel’s actions in Gaza. Peltz resigned from his position at the Wiesenthal Center.

Friction with Ben & Jerry’s wasn’t the driving strategic factor in Unilever’s decision to spin off ice cream, according to a person familiar with the matter.

Under new CEO Hein Schumacher, who took the reins in July 2023, Unilever has been working to drive higher sales growth and fatter margins by focusing on fewer categories and brands.

Unilever had already separated its business into five divisions. The smallest—at 13% of total sales—is ice cream, whose capital-intensive cold supply chain is markedly different from the company’s other businesses, which include soaps, laundry detergents, household cleaners, mayonnaise and skin cream.

Tensions between an outspoken brand and a major multinational company were perhaps inevitable.

Back in 2000 when Ben & Jerry’s fans got wind of the company’s decision to sell itself, they organized rallies outside its stores in protest, launched a website savebenandjerrys.com, and mailed ice-cream pint-tub lids back to the company’s Vermont headquarters with the message “Don’t Sell Us Out" written inside.

Both inside and outside the ice cream brand there were fears that an acquirer would try to dilute Ben & Jerry’s commitment to fighting for progressive causes. One analyst described it as “capitalism versus tie-dye."

A return to being part of an independent ice-cream business could put Ben & Jerry’s in a position similar to that it occupied after 1984 when it first went public where it made decisions more freely.

Even at that time, though, the company sometimes struggled to mesh its social mission with shareholder interests. For example, in the mid-90s its CEO—a former McKinsey consultant—resigned following tussles with the founders over decisions such as expanding to France, which they opposed due to its nuclear-testing policies.

Furman said any potential buyer will be well aware of the independent board’s powers, and its continued focus on social issues that some can find controversial. He thinks a split from Unilever could be for the best.

“There’s just as good a chance it turns out great," he said “It’s like getting divorce sometimes the relationship is not savable and two people go their different ways and things are better for both."

Write to Saabira Chaudhuri at Saabira.Chaudhuri@wsj.com