Ben & Jerry’s made international headlines when the ice cream company sold to Unilever in 2000. Local and national pundits questioned whether the brand’s well-known social activism — not to mention its one-of-a-kind flavors — would endure.
Vermont communities often feel deeply tied to the companies, like Ben & Jerry’s, that grew up in their midst. In recent years, several other Green Mountain-grown businesses have been sold out of state. That can come with perks, like more cash and opportunities to reach new markets. It also can move the management beyond state lines.
In the nearly two decades since the Ben & Jerry’s sale, several other well-known Vermont businesses have been sold to out-of-state companies. The Okemo, Stowe, Mount Snow and Stratton ski resorts have all been sold to large ski conglomerates since 2017. Vermont Creamery, mywebgrocer.com, Ibex Outdoor Clothing, Rock of Ages, Granite Industries of Vermont, BioTek and St. Albans Dairy Cooperative are a few others that have changed hands in that period as well.
In 2018, Champlain Oil Co. was sold to a Massachusetts company, and the Times Argus and Rutland Herald newspapers were sold to Sample News Group in Pennsylvania.
A few years earlier, in 2014, Vermont Castings sold to Iowa-based HNI; the Burlington-based dealer.com software company sold to Cox Automotive for nearly $1 billion; and IBM sold its chip business to GlobalFoundries. In 2016, Bond Auto sold to O’Reilly Auto Parts; the Burlington-based Seventh Generation sold to Unilever; and Keurig Green Mountain was acquired by a group of investors led by JAB Holding Company.
In the case of Ben & Jerry’s, the ice cream giant managed to retain not only its own manufacturing — almost all of it still in Vermont — but its social mission.
The company has used its high profile to highlight figures like Sen. Bernie Sanders and causes like the Resist movement, which opposes President Trump. This summer, Ben & Jerry’s released an ice cream called Justice ReMix’d that it says highlights structural racism and the broken criminal justice system. The company foundation donates about $1.8 million each year to progressive causes, and greets visitors to its Waterbury factory with an array of information about its own initiatives, and about the state of social justice in general.
Other businesses are following different paths.
Changing economic forces
Company sales have always been a natural part of the business cycle. Some observers liken the environment to a forest, with old growth making way for new.
A few national forces drive company sales nowadays. Many baby boomers are retiring and selling their companies. Meanwhile, it’s so inexpensive to borrow money that it makes sense to grow through acquisition, rather than organically, said John Burton of the Vermont Futures Project.
Consolidation in the ski industry, a fact of life for decades, is also growing for a number of reasons. And in other industries, improved communication and economies of scale are making it easier to operate as part of a large, international conglomerate.
“Overall there is a trend toward larger businesses,” said Burton. “It used to be harder to have branch offices all over the place, but now with good inexpensive telecommunications, it’s not as hard for big companies to manage their branch offices.”
In many cases, a sale enables the company to keep going, said Rocki-Lee DeWitt, a management professor at the University of Vermont.
“In my opinion, this is so common because if they don’t get sold, they don’t get access to the resources they need to deal with the competition,” she said.
What this means for Vermont is that while some of its oldest names might still have a presence in the state, they’re now largely steered by people in other places.
Vermont Castings still has plants in Randolph and Bethel, but the phone number on its website rings in Minnesota. Keurig Green Mountain/Dr. Pepper, which is gradually dwindling in size in Waterbury, steers callers to a contact in Plano, Texas. Hubbardton Forge is owned by investors in Massachusetts.
Vermont-owned companies try to use their local roots as a marketing advantage. Owners of small businesses like Bolton Valley Resort are banking on the expectation that there will always be customers who want to communicate directly with local people.
“We see ourselves as stewards for Bolton Valley,” said CEO Lindsay DesLauriers, whose family owns the resort. In the face of the promotional might wielded by the skiing conglomerates, Bolton is working with other small, independent ski areas to promote local skiing.
“It’s joining with other like-minded, fiercely independent, necessarily oftentimes scrappy” ski areas, said DesLauriers. “What we feel is close to the true heart of skiing.”
The emotional reaction to the sale of Vermont companies has diminished since the days that Ben & Jerry’s was sold to Unilever, a corporate giant like those the ice cream company’s founders regularly railed against. These days, a social conscience isn’t just the domain of Vermont companies; it’s an international theme. Nobody expressed concern that the $1 billion BioTek sale earlier this year would affect Vermont’s culture.
But still, some businesses are seen as closely aligned with the state’s identity, according to DeWitt.
“People would be more upset if the Orton family sold the Vermont Country Store,” DeWitt said.
New money
The leaders of Seventh Generation, the Vermont-grown natural products company, weren’t even looking for a new owner when they were approached by Unilever, a multinational based in London and Rotterdam with 155,000 employees, said CEO Joey Bergstein.
But Seventh Generation –- which has 140 workers in Burlington — met with Unilever and learned a little about its mission to rebrand itself as a sustainable products company.
“We realized we could better deliver our company mission with Unilever than by remaining independent,” said Bergstein. “We are expanding the business to 30 countries this year, and we never would have been able to do that properly otherwise.”
The out-of-state owners of several Vermont ski areas — including Killington and Pico — have poured millions of dollars into capital expenses. GlobalFoundries invested $55 million into the former IBM plant in 2015; HNI, the company that bought Vermont Castings, spent $10 million on the Bethel and Randolph plants.
And “it’s more than capital,” said Bergstein. “It’s resources, people, organizations on the ground and in countries around the world that we’ve been able to tap into. The expansion is all through the Unilever organization; we’re not doing it on our own.”
Those networks are critical for small companies that want to expand, DeWitt said. And sometimes only a large parent company can affordably supply them.
“Whether it’s supply chain relationships, marketing relationships, it’s one thing to be created to serve the Vermont market, and it’s an entirely different thing to say ‘We’re going to have a presence in Boston, New York, Philly, D.C.,’” she said.
Sometimes sales mean the smaller company’s in-state presence diminishes slowly or suddenly, but even then, there can be financial benefits. After a sale, some newly wealthy founders stay around to start new businesses or invest in other startups. Vermont has seen that with companies like Magic Hat, Ben & Jerry’s, IDX and dealer.com.
Losing the local touch
In a state as small as Vermont, a sale is felt not just by customers and owners, but by residents at large who see a formerly scrappy startup as part of the area’s identity.
When a company is locally owned, you’re more likely to bump into its leaders in the grocery store or at kids’ sporting events, said Tom Torti, the president of the Lake Champlain Chamber of Commerce. Those encounters have a benefit that goes beyond the social; they’re a chance for companies to gain locals’ trust and a way to show they’re being run by people who have shared values.
“You don’t get that when you’re owned by Unilever or Vail or Cox Automotive,” said Torti. “Their connection to the heart and soul of the community, to the problems of the community, can be a little bit removed.”
That’s one factor that leads some owners to try first to sell to their employees. Vermont ranks third in the nation for the number of people working in companies with some form of worker ownership, including Employee Stock Ownership Plans, or ESOPs, and worker cooperatives. Bram Kleppner, CEO of Danforth Pewter in Middlebury, said owners Fred and Judi Danforth were approached a few years ago by prospective buyers who wanted to move production out of the country.
“The Danforths just could not have been less interested in even having that conversation,” Kleppner said. Eventually, Kleppner hopes it can go to an employee-owned trust — or to someone who wants to keep it in place.
“We are certainly open to the possibility that there will be someone who sort of shares all our values, and for whatever reason wants to own a cool little manufacturing company in Middlebury,” he said. “We’d be open to selling to that person.”
Bergstein said Unilever’s ownership hasn’t affected the values at Seventh Generation. He noted everybody at Seventh Generation — although not at Unilever — got a day off work for the climate strikes in September.
He added that when employees learned of the acquisition, many asked if Seventh Generation would stay in Burlington.
“It was never a question in our minds,” Bergstein said. “Before we announced the acquisition, we made a call to the governor to reassure the governor that our intention was to stay in Vermont. Whether we would move the business or not wasn’t a consideration; it was just obvious.”