Ben & Jerry's embarrassed by scoop over nuts

Nuts! And you thought you were helping forest peoples in the rain forest.

After all, the label on Ben & Jerry's Rainforest Crunch ice cream claimed for five years that "money from these nuts will help Brazilian forest peoples start a nut-shelling cooperative."


The truth is, Ben & Jerry's Homemade Inc. purchased 95 percent of the nuts for Rainforest Crunch ice cream from Brazilian agribusinesses and less than 5 percent from the little nut-shelling cooperative in western Brazil. Recently, the Xapuri cooperative got out of the nut business entirely, forcing Ben & Jerry's to remove quietly the helping-the-forest-people pitch from its crunch containers.

It's not exactly a scandal to rival Watergate -- or even Whitewater. But it's not what one would expect from a poster child for the socially conscious business movement.


"This is all about campaigns to create a marketing image for the company. General Motors sells sex to sell their cars, Ben & Jerry's sells idealism to market their ice cream. Ultimately, it's exploitative," says investigative journalist Jon Entine, formerly of "PrimeTime Live," whose efforts led to the demise of the forest-peoples label.

When the company admitted the labeling problem in a "social assessment" section of its 1994 annual report, it credited Mr. Entine. "It is a legitimate question whether representations made on Ben & Jerry's Rainforest Crunch ice cream package give an accurate impression to the customer," wrote socially responsible business guru Paul Hawken in the report.

The Brazil nut brouhaha is the latest in a series of recent setbacks for self-described "socially responsible" businesses.

For years, the Body Shop boasted that it purchased "natural" Brazil nut oil from the Kayapo Indians of the Amazon rain forests; in reality, only the smallest amounts of the Kayapo oil made their way into Body Shop products. The cosmetics retailer's stock plunged after Mr. Entine reported on the subject.

Last year, a Globe report described how Reebok, which goes to great lengths to portray itself as a promoter of human rights in the Third World, employs Indonesian workers to assemble shoes for about 25 cents an hour.

"Being socially responsible in sourcing is very complex when you're dealing with international markets," notes analyst Matt Patski, who follows Ben & Jerry's for Boston's Adams Hark- ness.

Ben & Jerry's began producing Rainforest Crunch in 1989, after co-founder Ben Cohen met with Jason Clay, who was then directing a nonprofit Cambridge, Mass., outfit called Cultural Survival Inc. At a Grateful Dead benefit concert for the rain forest, Mr. Clay made the pitch that, by helping poor rain-forest people derive economic benefit from the harvesting of rain-forest products, nut purchases could combat both poverty and the clear-cutting of rain forests for very profitable timber sales.

Mr. Cohen bit, and a new flavor, now one of the company's top 10, was born. Through Cultural Survival, the nuts would come from the Xapuri cooperative.


But, almost immediately, the company knew its nut purchases were not solely going to help forest peoples.

"We always knew we were not sourcing all of the nuts from the cooperative," admits Alan Parker, head of investor relations and special projects for Ben & Jerry's.

That didn't stop the ice cream maker from touting its rain-forest aid to eco-friendly customers. Ben & Jerry's displayed a mural of the cooperative at its corporate headquarters in Waterbury, Vt. Mr. Cohen, in speaking tours around the country, continues to tell audiences that the company "had made a difference" in helping forest peoples.

Meanwhile, Cultural Survival was having increasing problems supplying the nuts. The Xapuri co-op could not produce enough nuts with low enough coliform-bacteria counts to meet U.S. commercial standards.

In fact, the first supply of nuts the Xapuri sent through Cultural Survival to the United States came, not from forest peoples, but from the notorious Mutrans, a wealthy agribusiness family convicted of killing labor organizers in Brazil.

Ben & Jerry's -- actually, an independent company called Community Products, founded by Mr. Cohen -- quickly ended its relationship with the Mutrans. But the company had to purchase more and more nuts on the open market as demand grew in direct proportion to the popularity of Rainforest Crunch.


"The demand was much higher than the supply," says Geraldo Marques of Cultural Survival. "The cooperative couldn't keep up."

In 1994, the cooperative decided to put its nut business on ice, saying it could not make a profit under current market conditions. Several months later, Ben & Jerry's began quietly removing the claims from its Rainforest Crunch labels.

"It would be misleading at this time to imply that 100 percent of the profits from 100 percent of the nuts would be used to help Xapuri," Mr. Cohen admitted in a recent interview.

That is surely an understatement. Ben & Jerry's purchased more than 1 million pounds of nuts through Community Products, and the cooperative processed only 50,000 pounds that met U.S. standards.

The Xapuri cooperative also saw very little of the $3.02 million in profits on the 140,000 gallons of Rainforest Crunch Ben & Jerry's has sold.

"Ben & Jerry's was going to return some of the profits to the Xapuri," says University of Chicago anthropologist Terrence Turner, who studies indigenous groups in the Amazon. "But they haven't seen a penny in years."


Mr. Cohen chafes at the suggestion of wrongdoing. "I would do it just the way I did if I had to do it again," he says, contending his company at least "created demand" for rain-forest products.

In fact, even the "creating demand" theory is under fire these days from indigenous rights organizations. "Rather than helping, they are hurting the peoples of the forest," says Zeze Weiss, director of the Amanakaa Amazon Network, who argues that Ben & Jerry's highly publicized efforts have weakened campaigns in support of forest peoples' rights.

Dr. Turner, the anthropologist, agrees. "If you make profitability the criterion, in a lot of cases you're going to have Brazilian entrepreneurs making a lot of money while hurting the indigenous peoples," he says.