Seventh Generation Says Corporate Buyout Is A Chance To Take Its Mission Global

Oct 26, 2016

On its face, the purchase of Vermont-based Seventh Generation by the giant multinational Unilever seems like a straightforward a corporate buyout. But leadership and employees alike says it’s a chance for the company to expand its sustainable mission — and go global.

When the natural homecare company Seventh Generation was founded back in 1988, the idea that a business would strive to do good for society and the environment was something of a radical fringe concept. 

But nowadays, mission-driven companies are some of the fastest-growing, and giant corporations are getting in on the game. Case in point, Unilever's recent announcement that it purchased Seventh Generation. 

It’s not the first Vermont-based company that corporation has acquired: It bought the quirky ice cream brand Ben and Jerry's back in 2000. The learnings from that acquisition served as something as a template when Unilever and Seventh Generation worked out their purchase agreement.

Seventh Generation brand manager John Moorhead remembers the day everybody learned about the merger. He knew something was up when he saw an invitation to an all-staff meeting pop up on his calendar on short notice.

"So I think going into the room we were all probably a little nervous, because there were more people with suits than we are used to seeing here," said Moorhead. 

Moorhead says it was very quiet in the room when the suits made the announcement. But both the Unilever reps and Seventh Generation leadership assured employees that the company would retain its core culture and mission.

In a lab just several floors below the Seventh Generation CEO's office, a chemist works on new formulations for laundry detergent that dissolve more effectively in water. Seventh Generation and Unilever leadership have assured employees that company headquarters will remain in Vermont.
Credit Kathleen Masterson / VPR

A commitment to Vermont

In many ways, the companies couldn't be more different. The Seventh Generation office has a tight-knit family feel. The lab techs keep a photo of an orangutan posted on the wall as a reminder of why they use sustainably-harvested palm oil.

Unilever is a British-Dutch multinational corporation that owns more than 400 brands. The list includes Dove soaps, Axe body spray, Hellman's and Lipton tea. 

Unilever didn't respond to requests for an interview. But Seventh Generation CEO John Replogle says he's excited.

“Seventh Generation is really accessing and leveraging the global platforms of Unilever so we can scale, so we can have more impact, so we can reach more consumers,” said Replogle. “We're moving from serving millions to hopefully one day serving billions of consumers around the world.”

Replogle worked for Unilever for two and a half years, managing the skin care products division.

Now, back at the homegrown Vermont business, he’ll help oversee the purchase of this 170-person company by a 170,000-person company.

Yet Replogle says the negotiated contract was clear: “We're going to remain a Vermont company; we're going to remain a semi-independent entity of Unilever. And importantly, we're establishing a social mission board.”

Seventh Generation co-founder Jeffrey Hollender will be one of the voices on that board. Hollender was ousted from his company in 2010 due to differences with the leadership board.

"I had always been a proponent of not selling the company because I believed that the values and missions would be compromised if we sold," Hollender says.

When doing good makes good business sense

But Hollender says back then, it was a very different business environment, and says even Unilever has become an entirely different company in the past seven years, under the leadership of its current CEO Paul Polman. 

"He created, for the first time, the type of company that I think Seventh Generation would be lucky to be part of, and who would be a great steward for Seventh Generation's mission and vision, as I believe he has been for Ben and Jerry's," Hollender says.

The giant Unilever purchased the oddball, mission-driven ice cream company back in 2000. And that acquisition was not easy for either party. 

But the relationship between Ben and Jerry's and Unilever evolved into thriving partnership, says Chris Miller, the social mission activism manager at Ben and Jerry's, who worked for the company through the rocky transition.

He says part of what Unilever grew to recognize over the years is the "understanding that these companies and brands can work best when they have autonomy and independence focused around the mission."

The current Ben and Jerry's offices in South Burlington still house this old piano from the original scoop shop that opened in 1978 in a refurbished gas station downtown.
Credit Kathleen Masterson / VPR

Miller says in the case of Ben and Jerry's, Unilever has allowed the company to continue to source its ingredients in ways it deems socially responsible and stay committed to its advocacy work.

"Whether that's our recent support for the Black Lives Matter movement or supporting mandatory GMO labeling, it's giving us the autonomy to do things and go out on issues that may or may not be issues that Unilever would be interested in a consumer-facing campaign on," Miller says.

And Unilever's focus on social and environmental sustainability makes good business sense, says Dartmouth University business professor Paul Argenti.

"Ultimately companies that are in it for long haul, that are looking out for society's interests, are the ones that are going to survive. No question," says Argenti, who researches and writes about corporate social responsibility.

Not only that, he says, but incorporating social and environmental goals into the company's very fabric— such as a pledge to source ingredients sustainability — is attractive to both customers and employees, especially millennials.

For a company, "your reputation is the most important asset that you have," says Argenti. "If you're avoiding getting into problems in future by solving problems today, you're going to be a company that is stronger in the future."

But some back at Seventh Generation still have questions about how their merger going to work.

The company's mission and advocacy manager Ashley Orgain says that after reading parts of the negotiated merger contract, she feels confident that her social mission work will be able to continue.

Still, she says there is some romance lost with no longer working at a small, privately-held company.

"I don't know yet how it's going to feel, but I know I'm not working for a small Vermont-based business," Orgain says. "I'm now working for a large multinational corporation, and that's going to come with some compromises, no doubt."

For Unilever, on the other hand, the acquisition will expand the European company's foothold in "green" homecare products, and give it a competitive edge in the United States market, where its main rival is Procter and Gamble.