03rd Nov 2006
Did you know?
NOTE: I didn’t write any of this, I just found it in a newsletter online and thought it was intriguing enough to share.
The Body Shop
Founded: 1970
Products: Cosmetics and toiletries
Purchaser: L’Oreal
L’Oreal turnover: £9.8 billion
Date of purchase: March 2000
Price paid: £652 million
‘Before’ Ethiscore: 11
‘After’ ethiscore: 3.5
The Body Shop, and its founders the Roddicks, have developed a reputation as ‘campaigning traders’. Going beyond the development of ethical products, they used the company’s high street position to campaign vocally ‘against animal testing’ as well as on other issues like Shell in Nigeria and multinationals generally. This has made their acquisition, by one of the most vilified multinational groupings in the world (L’Oreal/ Nestle), particularly hard for some former supporters. To some degree the unique voice of The Body Shop had
already been stifled following its stock-market floatation in 1999.3 In addition, pre-takeover reports had identified Body Shop as struggling financially, and in need of a partner to prosper. According to the Economist, ‘L’Oreal says The Body Shop will be able to operate as an independent unit, which sounds sensible. But will L’Oreal really be able to resist slipping its ethically-challenged wrinkle cream onto the shelves next to the bracing and naturally-inspired body scrubs offered by The Body Shop?’
Green & Blacks
Founded: 1991
Products: Chocolate
Purchaser: Cadbury Schweppes
Cadbury turnover: £4.7 billion
Date of purchase: May 2005
Price paid: £20 million
‘Before’ Ethiscore: 16
‘After’ ethiscore: 8.5
This takeover has already been the subject of an extended debate in the letters page of Ethical Consumer. Cadbury Schweppes, although no stranger to controversy over workers’ rights in its chocolate supply chains and other issues, has not attracted the same levels of criticism as other chocolate multinationals. According to William Kendell, Green & Blacks’ chief executive, ‘we would never have sold…the company…if we had not been convinced of their complete
commitment to our values. We know that they will help us bring the benefits of organic farming and ethical trading to more people than we have been able to do’.
Neil Makin from Cadbury Schweppes is also on record as saying: ‘ We wouldn’t want to buy these companies if we were going to destroy their brand. With our Bournville Quaker forefathers we have something of a social and ethical heritage already.’
Ben and Jerry’s
Founded: 1978
Products: Ice Cream
Purchaser: Unilever
Unilever turnover: £28 billion
Date of purchase: April 2000
Price paid: $100 million
‘Before’ Ethiscore: n/ a
‘After’ ethiscore: 3.5
This takeover was the most high-profile takeover of a socially responsible business in its day. What lessons does it hold for the bout of more recent acquisitions? Firstly, sales are good. In 2003 it had already become the top selling ‘premium’ ice cream in the USA with sales of $212m — a 70% increase over 1997.3 However, the ethical culture of the organisation is widely recognised not to have fared so well. Its latest social audit found that only 45% of employees thought that the company was taking its social mission
seriously.13 20% of Ben & Jerry’s employees were fired in the first 3 years after acquisition and Unilever no longer donates 7.5% of Ben & Jerry’s pre-tax profits to charity. Although it is fair to say that disclosing this kind of data in its own social audit shows that some serious commitment remains.
In one way, the Ben and Jerry’s takeover was unusual. It was a ‘hostile’ takeover of a publicly quoted company and, as such, left one founder, Ben Cohen, less than ecstatic. He is on record as saying, ‘I think that most of what had been the soul of Ben and Jerry’s is not gonna be around anymore’. He also offers this advice to other social entrepreneurs considering selling to a large organisation: ‘Don’t do it! Stay independent.’
Tom’s of Maine
Founded: 1970
Products: Toothpaste
Purchaser: Colgate Palmolive
Colgate turnover: £5.5 billion
Date of purchase: March 2006
Price paid: $100 million
‘Before’ Ethiscore: 16
‘After’ ethiscore: 10.5
Tom’s of Maine was America’s top selling ‘natural’ toothpaste brand and it had ECRA’s highest rating for environmental reporting, animal testing policy and for paraben-free products. Colgate Palmolive currently has ECRA’s worst rating in these categories as well as criticisms for involvement in Oppressive Regimes and Political Activity. According to founder Tom Chappel, maintaining ethical standards such as bio-degradability of ingredients and staying in Maine were ‘deal breakers going into the process’.
Other similar takeovers
Small ethical companies being taken over by larger players don’t always make it into the press. There has been a clear trend for some time in the USA and it is now beginning to be felt here.
Samantha and Odwalla (premium juice) by Coca Cola
Natural Boca Burger (veggie burger) by Kraft/ Philip Morris
Cascadian Farm (organic) by General Mills
Stonyfield Farm (organic yoghurt) by Danone
Seeds of Change (pasta) by Mars UK/ Europe
Rachels Organic (dairy) by Dean Foods (USA)
Kallo Foods (wholefoods) by Koninklijke Wessanen
PJ Smoothies (drinks) by Pepsi
NOTE: I didn’t write any of this, I just found it in a newsletter online and thought it was intriguing enough to share.
The Body Shop
Founded: 1970
Products: Cosmetics and toiletries
Purchaser: L’Oreal
L’Oreal turnover: £9.8 billion
Date of purchase: March 2000
Price paid: £652 million
‘Before’ Ethiscore: 11
‘After’ ethiscore: 3.5
The Body Shop, and its founders the Roddicks, have developed a reputation as ‘campaigning traders’. Going beyond the development of ethical products, they used the company’s high street position to campaign vocally ‘against animal testing’ as well as on other issues like Shell in Nigeria and multinationals generally. This has made their acquisition, by one of the most vilified multinational groupings in the world (L’Oreal/ Nestle), particularly hard for some former supporters. To some degree the unique voice of The Body Shop had
already been stifled following its stock-market floatation in 1999.3 In addition, pre-takeover reports had identified Body Shop as struggling financially, and in need of a partner to prosper. According to the Economist, ‘L’Oreal says The Body Shop will be able to operate as an independent unit, which sounds sensible. But will L’Oreal really be able to resist slipping its ethically-challenged wrinkle cream onto the shelves next to the bracing and naturally-inspired body scrubs offered by The Body Shop?’
Green & Blacks
Founded: 1991
Products: Chocolate
Purchaser: Cadbury Schweppes
Cadbury turnover: £4.7 billion
Date of purchase: May 2005
Price paid: £20 million
‘Before’ Ethiscore: 16
‘After’ ethiscore: 8.5
This takeover has already been the subject of an extended debate in the letters page of Ethical Consumer. Cadbury Schweppes, although no stranger to controversy over workers’ rights in its chocolate supply chains and other issues, has not attracted the same levels of criticism as other chocolate multinationals. According to William Kendell, Green & Blacks’ chief executive, ‘we would never have sold…the company…if we had not been convinced of their complete
commitment to our values. We know that they will help us bring the benefits of organic farming and ethical trading to more people than we have been able to do’.
Neil Makin from Cadbury Schweppes is also on record as saying: ‘ We wouldn’t want to buy these companies if we were going to destroy their brand. With our Bournville Quaker forefathers we have something of a social and ethical heritage already.’
Ben and Jerry’s
Founded: 1978
Products: Ice Cream
Purchaser: Unilever
Unilever turnover: £28 billion
Date of purchase: April 2000
Price paid: $100 million
‘Before’ Ethiscore: n/ a
‘After’ ethiscore: 3.5
This takeover was the most high-profile takeover of a socially responsible business in its day. What lessons does it hold for the bout of more recent acquisitions? Firstly, sales are good. In 2003 it had already become the top selling ‘premium’ ice cream in the USA with sales of $212m — a 70% increase over 1997.3 However, the ethical culture of the organisation is widely recognised not to have fared so well. Its latest social audit found that only 45% of employees thought that the company was taking its social mission
seriously.13 20% of Ben & Jerry’s employees were fired in the first 3 years after acquisition and Unilever no longer donates 7.5% of Ben & Jerry’s pre-tax profits to charity. Although it is fair to say that disclosing this kind of data in its own social audit shows that some serious commitment remains.
In one way, the Ben and Jerry’s takeover was unusual. It was a ‘hostile’ takeover of a publicly quoted company and, as such, left one founder, Ben Cohen, less than ecstatic. He is on record as saying, ‘I think that most of what had been the soul of Ben and Jerry’s is not gonna be around anymore’. He also offers this advice to other social entrepreneurs considering selling to a large organisation: ‘Don’t do it! Stay independent.’
Tom’s of Maine
Founded: 1970
Products: Toothpaste
Purchaser: Colgate Palmolive
Colgate turnover: £5.5 billion
Date of purchase: March 2006
Price paid: $100 million
‘Before’ Ethiscore: 16
‘After’ ethiscore: 10.5
Tom’s of Maine was America’s top selling ‘natural’ toothpaste brand and it had ECRA’s highest rating for environmental reporting, animal testing policy and for paraben-free products. Colgate Palmolive currently has ECRA’s worst rating in these categories as well as criticisms for involvement in Oppressive Regimes and Political Activity. According to founder Tom Chappel, maintaining ethical standards such as bio-degradability of ingredients and staying in Maine were ‘deal breakers going into the process’.
Other similar takeovers
Small ethical companies being taken over by larger players don’t always make it into the press. There has been a clear trend for some time in the USA and it is now beginning to be felt here.
Samantha and Odwalla (premium juice) by Coca Cola
Natural Boca Burger (veggie burger) by Kraft/ Philip Morris
Cascadian Farm (organic) by General Mills
Stonyfield Farm (organic yoghurt) by Danone
Seeds of Change (pasta) by Mars UK/ Europe
Rachels Organic (dairy) by Dean Foods (USA)
Kallo Foods (wholefoods) by Koninklijke Wessanen
PJ Smoothies (drinks) by Pepsi
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