The IFTF Blog
Ben & Jerry’s, B-Corps, Domino’s, and the Search for Sincere Food
Recently, I came across an ad for Domino’s “We’re Not Artisans” Artisan Pizza. The thin-crusted, rectangular pizza comes in a box with the words “We’re Not Artisans” printed on it in big letters, and a blank line reserved for the signature of the employee who makes the pizza inside. Seeing this, I couldn’t help but think of our forecast for Europe, ‘Quality through sincerity,’ from our 2011 Global Food Outlook research. Here’s the gist of it:
Over the next decade, Europeans will have access to layers of real information about their food, generated by integrated monitoring and data sensing systems operating from both the top down and the bottom up. These flows of information will influence people’s notions of what constitutes high-quality, authentic, and ethical foods. These notions will shift based on the additional data available about food choices, as consumers base their purchasing decisions less on a food’s substance or national origin and more on the process it undergoes from farm to fork. Companies’ attempts to wrap narratives around these processes will be subject to verification by consumers, heightening the importance of sincerity as an element of people’s decisions about food.
While this Domino’s example is from the U.S., I think it touches on many of the issues we highlight in the forecast. The employee signature and the admission that “we’re not artisans” supports our forecast that people will demand transparency and sincerity.
But there are certain ironies in this initiative by Domino’s that resonate with the tensions inherent in our Europe forecast. As a publicly traded company, Dominos is legally obligated (under certain interpretations of corporate law) to do whatever makes the most money for their shareholders. When providing customers with greater transparency and greater connection to their food ultimately makes more money for their shareholders, a publicly traded company will do just that, but if consumer values suddenly shift and it becomes more profitable for workers and supply chains to be neither seen nor heard, then that’s what we’ll get.
Much has been made of this tension and one attempt to address it is the “benefit corporation” movement. From Benefitcorp.net:
Benefit Corporations are a new class of corporation that 1) creates a material positive impact on society and the environment; 2) expands fiduciary duty to require consideration of non-financial interests when making decisions; and 3) reports on its overall social and environmental performance using recognized third party standards.
Essentially, benefit corporations, (often called b-corps, for short) are a new way to charter a corporation (in certain states) that legal obligates its owners to consider the business’ impact on society, (as opposed to the existing charter, which requires profit maximization for shareholders under certain interpretations of the law).
It should be no surprise then, that when Ben & Jerry’s Ice Cream, (a wholly owned-subsidiary of Unilever, a publically traded company), recently announced it had become a B-Corp, many eye-brows were raised. The sale of Ben & Jerry’s to Unilever has often been used as an example of why benefits corporation status is necessary. According to many analysts, the founders were forced to sell to Unilever because the progressive (but publically-traded) ice cream company was legally obligated to maximize shareholder value by selling to the highest bidder. Ben & Jerry’s becoming a b-corp recently has been heralded by some as a great correction of a major mistake in the company’s history. However, things are a little more complicated then that. It turns out, Ben & Jerry’s has become a “Certified B Corp,” which is different from becoming chartered as a benefit corporation.
An overview of the differences can be found here. But it seems like the most substantial differences are how legally binding they are or aren’t and how much verification happens. Chartering is a legal process and its legally binding. I believe that if a chartered benefit corporation doesn’t meet its social obligations, it could be sued or even have it’s charter revoked. However, there isn’t much in the way of a verification mechanism, as far as I know. B corp certification, on the other hand, is a certification that companies get when they subject themselves to inspection by the non-profit B-Labs. The certification isn’t legally binding in any way. So my interpretation is that, while legally everything is the same, companies that get B Corp certification can have that certification revoked, which (if they’re a big company) could cause significant damage to the brand image. Therefore, a certified b-corp, while not legally required to, will try to retain its social mission to avoid losing profits through a PR debacle.
My point is that sincerity is elusive. In the current landscape, there are demands for transparency and for food that is produced ethically, but verification is complex and requires a significant amount of engagement, on the consumer’s part, to find the truth in the many claims made by companies and certification systems. As we explain in our 2011 GFO forecasts, in a decade technology will likely allow consumers to evaluate claims on their own. However, making this process quick and easy will probably remain a challenge for years to come.