Ben and Jerry and Brazil (BEN)

          CASE NUMBER:         93  
          CASE MNEMONIC:      BEN
          CASE NAME:          Ben and Jerry and Brazil

A.        IDENTIFICATION

1.        The Issue

Rainforest Crunch, an ice-cream produced by the Vermont-based
ice cream factory Ben and Jerry's, became famous not only because
of its buttery, rich flavors, but also because part of the sales
profits were to be reinvested in the preservation of the
rainforest in Brazil.  The nuts used in the Rainforest Crunch are
harvested from the forest by traditional nut gatherers, who have
done this for years without harming the forest environment.  A
cooperative of peoples of the forest was built in the Brazilian
Amazon with the purpose of improving the means of production,
thereby increasing output. This case analyses the impact of the
Rainforest Crunch Ice cream on the community back in Brazil.

2.        Description

Ben and Jerry's Inc. has been know by its innovative
management strategies, which are usually considered socially and
environmentally conscious.  Ben and Jerry's owners, Ben Cohen and
Jerry Greenfield, founded the company in 1978 after taking a
correspondence course on how to make ice-cream.  Ben and Jerry's
prides itself in using only the best ingredients in their ice-
cream, even with after scale concerns took over production
processes.  Profits have been known to go to community projects
developed by the Ben and Jerry's Foundation. 

But Ben and Jerry's (B&J) ice-cream is known by its richness
in flavors, calories and by its price.  It is considered premium
ice-cream and is sold by the pint, in colorful and contemporary
cartons. The sale price in a super-market in the United States is
approximately $2.50 for a pint.

The Rainforest Crunch enterprise was only one of B&J's many
projects where the profits were reinvested in society.  A joint
venture with Cultural Survival, a non-profit organization for the
protection of indigenous peoples' rights, Ben and Jerry's
launched Rainforest Crunch project in 1989.  The project is an
experiment "based on the premise that, by cutting out middlemen,
buyers can afford to pay artisans and small farmers
a fair price for their products" says Jason Clay.

"In return, some producers use this additional money to improve
social and environmental conditions in their community."  Nut
gathering is considered to be an environmentally sound activity
because it does not require cutting trees, as in rubber tapping. 
The idea was to create a "win-win" situation.  On the one hand,
the rainforest was being preserved. On the other hand, the people
of the forests were making money and helping themselves make their
way into the world. 

Cultural Survival helped the community in Xapuri, state of
Acre, in the west Amazon region of Brazil, build a cooperative
where the rubber tappers, during the rain season, could bring the
nuts they had harvested.  The cooperative sorted, cracked and
stored the nuts brought by the forest people, which then was sold
to the United States markets.  Ben and Jerry's came in as one of
the main buyers of the product.  Not only did they buy the nuts,
but also a percentage of the profits were to be reinvested into
the cooperative. 

Rainforest Crunch flavor became a instant hit. Consumers were
not only buying traditionally rich Vermont ice cream, but
also protecting the Brazilian rainforest from being cut down. 
On the ice-cream carton it says that Rainforest Crunch "helps
show that rain forests are more profitable when their
nuts, fruits and medicinal plants are cultivated for traditional
harvest than when their trees are cut for short term gain." 
Calories apart, the consumers were led to believe that by eating
the ice-cream they were helping save the forests.

As the consumption of the Rainforest Crunch ice-cream
increased, so did the production of Brazil-nuts in the Amazon.
The harvest project was indeed environmentally sound, it was
not problem-free.  First, who are the forest peoples?  They are
certainly not "Indians", but rather settlers, living
in the Amazon region for a few generations, and do exercise
economic extraction without harming the environment.  Survival
International points out that Cultural Survival "has never
bought nuts from Indigenous Amazonian tribes."  While Ben and
Jerry's never claimed direct protection of indigenous tribes,
consumers probably understood the term "forest peoples" as indian
tribes of the Amazon. 

Second, some argue that capitalism is at the core of the
problems that destroy the forest.  In this case, even though
harvesting is environmentally safe, bringing such a fragile
communities in contact with international markets could put them
at the mercy of market fluctuations and cause significant damage. 

Third, rainforest peoples made use of the forest for
subsistence or small scale enterprise, and that the scale of
international markets they were entering would disrupt the
traditional relationships within the community and the
forests. 

Fourth, Cultural Survival started at some point buying nuts from
exporters in other regions once problems with bacterial infection
in storage rose.  The premise was that the cooperative people had
to adapt themselves to the world market standards and understand
that if they do not meet the qualifications, the market will look
for another supplier.

Last, forest peoples have acknowledged that
no money is going to help them if they do not have legal control
over the land.  There are numerous problems concerning land
tenure in the Amazon region.

The problem addressed in this paper is not directly an
environmental one.  It is rather an instance when environmental
protection brings about social problems for people who live in
the area affected.  The Rainforest Crunch project indeed tries to
slow down the destruction of the Amazon forest by introducing an
environmentally sound manner of extracting capital. 
However, the introduction of capitalist modes of production into
communities where production was rather for subsistence induces
profound changes in society.

Although tropical rain forests constitute only about 2 percent
of the surface area of the Earth now, the habitat they provide
is estimated to contain half of the species on the planet.  In
spite of this, rain forests are being destroyed at a worldwide
rate of 40-50 million acres a year.  Rain forests are seen as a
source of abundant resources such as natural rubber, timber,
and minerals In the process of being clear-cut for wood, large
rainforest areas are becoming pasture for cattle and other
practices.

As a result of the push to convert rain forests into fields
for agriculture and animal husbandry in an effort to catapult
countries, such as Brazil, into a competitive position in the
industrialized world, the habitat is not all that is in danger of
being lost.  Indigenous tribes are deprived of their traditional
hunting and foraging grounds and exposed to unfamiliar
infectious diseases by the need to meet the demands of growing
markets in lumber and other products.  Some estimate there are
over 1,000 different tribal groups in jeopardy.  Thus indigenous
cultures are driven out and the rich bio-diversity of the forests
is eliminated.


Cultural Survival arranges to sell these nuts to corporations
such as Rainforest Products, Inc., which uses the nuts in a
breakfast cereal, and Community Products, which uses the nuts in
its now famous Rainforest Crunch candy.  Community Products,
founded by Ben Cohen of Ben & Jerry's Homemade Ice Cream, Inc.,
claims to devote 60 percent of its pre-tax profits to saving the
rain forests.

In the field, Conservation international also cooperates with
local conservation and development programs.  Botanists,
conservation planners and ecologists supported by Conservation
International monitor harvest practices to ensure sustainability
and identify areas of forests which are at risk.  This helps to
ensure the integrity of the program at the local level.

One of the things that Clay, of Cultural Survival hopes to
prove is that, in the long run, the land will actually be more
profitable as a source of renewable products, according to Clay,
up to five times more profitable.  Though some estimates rate
forest reserve harvesting as the least profitable option.

Profit also fuels the generation of new markets in consumer
countries, and the profits can be large.  Clay's goal for
Cultural Survival within the first five years was $50 million
in nut sales.   These are significant revenues, but there are
questions of how much is actually getting to the people it
intends to help. 

Companies such as Community Products and Rainforest Products pay
Cultural Survival a 5 percent "environmental" premium over the
market rate for the nuts.  Even with premiums, indigenous
peoples who engage in these practices are at the mercy of markets
and their development-minded patrons. At one plant in
Brazil, each pound of nuts cost approximately $1.50 to process. 
With the market price at around $1.00 for shelled nuts economic
development is not likely, despite good intentions.

The indigenous peoples that engage in this practice are also
at risk of possible culture loss.  If they are already unfamiliar
with harvesting practices, or even the intricacies of the
economic system in which they are encouraged to participate,
they will be required to change their behavior from
subsistence living to profit orientation which may require
tremendous loss of traditional culture.  Such a shift in behavior
might also require physical relocation, to achieve access to
resources for profit, leading to further resource exploitation.

In the field, Conservation international also cooperates with
local conservation and development programs.  Botanists,
conservation planners and ecologists supported by Conservation
International monitor harvest practices to ensure sustainability
and identify areas of forests which are at risk.  This helps to
ensure the integrity of the program at the local level.

Pharmaceutical companies also participate in the extraction of
rainforest resources for research into new chemical agents to be
used in medicine.  This provides an important source of new drugs
for an industry which is finding new and more complex agents more
difficult to make.  Since fewer than 3 percent of world's known
flower species have been screened for medicinal properties, it
is likely that rain forests could be home to a host of species
with such properties.  

In all, 41 percent of medicines are derived from plants,
and 25 percent of all prescriptions written in the U.S. are for
drugs which come from plant extracts, making the preservation of
rain forests a potential boom for the pharmaceutical industry. 
These programs involve cooperation with local conservation groups
to isolate and identify species for testing.  In one case, ethno-
botany (the combination of anthropology and botany) taps into
knowledge bases of traditional healers to more quickly identify
species with medicinal potential.

3.        Related Cases

     MALAY case
     INDONES case
     AFRICA case

     Keyword Clusters         

     (1): Trade Product            = NUT
     (2): Bio-geography            = TROPical
     (3): Environmental Problem    = DEFORestation

4.   Draft Author: Aya Tanaka, Ruth Ferszt, and Andrew Hamm

B.        LEGAL Clusters


5.        Discourse and Status:  DISagreement and COMPlete

There is an agreement between Cultural Survival and Ben and
Jerry's to develop this cooperative in the Amazon.  Ben and
Jerry give a percentage of Rainforest Crunch ice-cream sales
to be reinvested in the cooperative with the assistance of
Cultural Survival. 

Although agreements have been completed between the above
mentioned parties, other agreements are being considered with new
indigenous groups, new products (such as fruit, oils, resins,
flowers, and pigments) and new companies such as The Body Shop.

6.        Forum and Scope:  BRAZIL and BILATeral

7.        Decision Breadth:  1 (Brazil)

8.        Legal Standing:  LAW

C.        GEOGRAPHIC Clusters

9.        Geographic Locations

     a.   Geographic Domain : South America [SAMER]
     b.   Geographic Site   : AMAZON
     c.   Geographic Impact : USA

10.       Sub-National Factors:  NO

The region in question is in the Western Amazon, a very remote
are of the country. The Amazonian states are known for violent
land disputes between big and small land owners, many times
affecting also indigenous peoples' tribes.  The army is also
involved in dispute settlements and sometimes even in border
disputes with neighboring countries (Brazil has borders with 10
of the 12 countries in South America). 

11.       Type of Habitat:  TROPical

The Amazon forest has received a lot of attention from the
international media in the past 15 years, due to logging, slash
and burn practices and desertification.  At the same time, the
international community was also worried about preservation of
indigenous cultures and of species, and the state of the earth's
oxygen supply, since the Amazon forest has been said to produce a
substantial part of the oxygen of the world.  Brazil underwent
severe economic hardship and political changes during the
1980s.  Many projects aimed at developing the Amazon actually
caused much environmental damage. A country of more than
3 million square miles, Brazil has many different climates
ranging from the subtropical regions of the south to the
equatorial climate of the Amazon region.

The climate of the Amazon Region is called more appropriately
"equatorial" rather than tropical.  The tropic of Capricorn
crosses the state of Sao Paulo in the southeast part of the
country.  Equatorial climates are characterized by the abundance
of vegetal and animal species, and by the extremely high levels
of humidity.

D.        TRADE Clusters

12.       Type of Measure:  Regulatory Standard [REGSTD]

13.       Direct vs. Indirect Impacts:  INDirect

14.       Relation of Measure to Environmental Impact

     a.  Directly Related     : YES  NUT
     b.  Indirectly Related   : YES  WOOD
     c.  Not Related          : NO
     d.  Process Related      : YES  DEFORestation

Trade in this case is protecting the forests since nut
gathering is an economic activity which can be done in the Amazon
without damaging the environment.  The impact is thus direct,
because instead of engaging in logging, the nut gatherers are
preserving the forest through only harvesting.

15.       Trade Product Identification:  NUT

16.       Economic Data

17.       Impact of Measure on Trade Competitiveness:  BAN

About 100 people are employed in the cooperative and a
fluctuating number of nut gatherers and people who work at home
cracking nuts. 

18.       Industry Sector:  FOOD

Profit is the driving force behind many activities engaged in
both to destroy and preserve the rain forests.  Forests are
being depleted for increased profit in timber and cattle
grazing, which is more profitable than leaving the land alone. 
One of the things that Clay hopes to prove is that, in the
long run, the land will actually be more profitable as
a source of renewable products, according to Clay, up to five
times more profitable.  Though some estimates rate forest reserve
harvesting as the least profitable option.

19.       Exporter and Importer:  USA and EUROPE

E.        ENVIRONMENT Clusters

20.       Environmental Problem Type:  Species Loss Land [SPLL]

The forests are being felled at the rate of about 4,500 acres
every hour, approximately 20 million hectares per year,
consigning as many as 27,000 species to extinction every year.

21.       Name, Type, and Diversity of Species 
     Name:          Trees
     Type:          Plant/Dicots
     Diversity:     56,215 higher plants per
                    10,000 km/sq (Brazil)

22.       Impact and Effect:  LOW and PRODuct

23.       Urgency and Lifetime:  MEDIUM and 100s of years

24.       Substitutes:  LIKE products

     Conservation International's "The Tagua Initiative" supports
local rainforest communities in an effort to protect bio-
diversity.  Conservation International markets the harvests of
Ecuadorian tagua nuts, which are used in jewelry, chess pieces,
buttons for clothing, and manufactured products using
the nuts.  Conservation International takes a royalty from the
sales and uses these proceeds to support conservation and
community development programs.  The price paid to tagua
collectors has risen 92 percent since the program began.

Pharmaceutical companies also participate in the extraction of
rainforest resources for research into new chemical agents to be
used in medicine.  This provides an important source of new drugs
for an industry which is finding new and more complex agents more
difficult to make.  And, since fewer than 3 percent of world's
known flower species have been screened for medicinal properties,
it is likely that rainforests could be home to a host of species
with such properties.  About 41 percent of medicines come
from plants, and 25 percent of all prescriptions written in the
U.S. are for drugs which come from plant extracts, making the
preservation of rainforests a potential boom for pharmaceutical
industry.  These programs involve cooperation with local
conservation groups to isolate and identify species for testing. 
In one case, ethno-botany (the combination of anthropology and
botany) taps into knowledge bases of traditional healers to more
quickly identify species with medicinal potential (see MERCK case).

The pharmaceutical company Merck & Co. entered into an
agreement with conservationists at Costa Rica's National
Institute for Biodiversity (INBio) that involves both
obtaining plant materials for research and support for
forest conservation.  Merck provided INBio with research
equipment and one million dollars to support Costa Rican
staff who are trained in species identification and
collection.  In return, Merck is given specimens of
plants and insects, which are then screened for
potentially useful compounds.  This way, INBio gets money
to support the conservation of rainforests, and Merck
benefits from the highly developed processes of natural
selection at work in the rainforest.

Shaman Pharmaceuticals takes a different approach to obtaining
specimens in the forest.  The focus of this company is to use
the knowledge of traditional healers (shamans) to isolating
plants which might be used in the production of pharmaceuticals. 
Shamans use the accumulated knowledge of thousands of years of
practice handed down from their ancestors and have very extensive
knowledge of local plant and animal species.   Using this method,
it is hoped that research costs can be cut because plants with
previously known medicinal value will be targeted.  Shaman has
signed agreements with three major pharmaceutical producers,
Merck & Company, Eli Lilly, and Inverni della Beffa, an Italian
interest, with commitments to Shaman of more than $4.5 million.

VI.       OTHER Factors

25.       Culture:  YES

     Through its ice cream, Ben & Jerry's is already a cultural
institution in the United States today.  Rainforest Products also
has its share of the American cultural tradition: run by the
manager of the Grateful Dead, it is funded by the band's
guitarist, Bobby Weir.  The creation of Community Products,
Rainforest Products, and other similar companies will continue to
capitalize on the trend of environmental awareness through
consumerism, which sometimes seems the only way to reach the
American public.

26.       Trans-Border:  NO

27.       Rights:  NO

28.       Relevant Literature

Adler, Jerry and Carolyn Friday.  "Calories of the Rain Forest."
     Newsweek, December 3, 1990, 61-62.
Alexander, Charles P.  "A Stock Scoop for Ice Cream: Ben and
      Jerry's Superpremium from Vermont Goes for the Big
     Time."  Time, November 4, 1985, 59.
Bittman, Mark.  "Ben & Jerry's Caring Capitalism."  Restaurant
     Business, November 20, 1990, 132.
Carr, Thomas A., Heather L. Pedersen, and Sunder Ramaswamy.
     "Rain Forest Entrepreneurs: Cashing in on Conservation." 
     Environment, September, 1993, 13-15+.
Cars, Howard.  "Ben & Jerry: Premium Ice Cream Sprinkled with
     Liberal Ideology."  Washington Post, November 29, 1989,
     A, 3:1.
Christensen, Jon.  "Getting the Scoop on the Rain Forest."
     St Louis Post-Dispatch, July 11, 1989, D:2.
Christy, Marian.  "Ben & Jerry: Here's the Scoop."  Boston Globe,
     June 26, 1991, 77:5.
Clay, Jason W.  "Trading, but No Profit."  Wall Street Journal,
     January 7, 1992, A:11.
"Combine Harvesters."  The Ecologist, July/August 1993, 150.
Corry, Stephen.  "The Rainforest Harvest: Who Reaps the Benefit?"
     The Ecologist, July/August 1993, 148-153.
Craig, David Cobb.  "Cold Comfort."  Life, September, 1987, 58-9.
Davis, William A.  "The Rain Forest's Cultural Survival."  Boston
     Globe, February 5, 1992, 35.
"Exchange: Rainforest Crunch."  The Nation, November 30, 1992,
     650+.
Feldman, Orna.  "Rain Forest Chic."  The New Republic, June 25,
     1990, 20.
Goldman, Ari L.  "Cookies, Civic Pride and Zen."  New York Times,
     December 23,1991, B, 6.
Gould, James Jay.  "Capitalistas in the Mist."  Buzzworm,
     July/August, 1991, 20.
Greenfield, Jerry.  "Ben & Jerry's 'It Had to be Food.'"  Career
     World, October, 1993, 28.
Hawken, Paul.  "A Declaration of Sustainability."  Utne Reader,
     September/October 1993, 54-66.
Holloway, Marguerite.  "Sustaining the Amazon."  Scientific
     American, July 1993, 90-6+.
Honebrink, Andrea.  "Can Shopping Save the World?"  Utne Reader,
     January/February 1993, 28-30.
Howard, James S.  "Economics 101 for the Rain Forest."  D&B
     Reports, September/October, 1992, 16-18.
Jukofsky, Diane.  "Can Marketing Save the Rainforest?"  E: the
     Environmental Magazine, July/August 1993, 32-9.
Katz, David M.  "How Ben & Jerry's Mingles Conscience with Profit
     Motive."  National Underwriter, June 3, 1991, 9-11.
Laabs, Jennifer.  "Ben & Jerry's Caring Capitalism."  Personnel
     Journal, November, 1992, 50-7.
Larrabee, Kathryn.  "Ben Cohen Runs a Business with a Mission."
     Business Insurance, April 22, 1991, T27.
Larson, Erik.  "Forever Young."  Inc., July 1988, 50-3+
Larson, Erik.  "I Scream, You Scream..."  Utne Reader,
     January/February, 1989, 64-66+. 
Levering, Robert and Milton Moskowitz.  "The Ten Best Companies
     to Work for in America."  Business and Society Review, 
     Spring, 1993, 21-35.
McMath, Robert.  "New Products: Marketers Exploit the Rain Forest
     in a Non-destructive Way."  Brandweek, October 19, 1992,
     34.
Morell, Virginia.  "Bringing Home a Piece of the Jungle."
     International Wildlife, September/October 1990, 12-15.
Queenan, Joe.  "Purveying Yuppie Porn."  Forbes, November 13,
     1989, 60 and 64.
Seligman, Daniel.  "Ben & Jerry Save the World."  Fortune, June
     3, 1991, 247-8.
Stableford, Joan.  "Ben & Jerry's Sweetens Its Success by Helping
     Others."  Westchester County Business Journal, March 4,
     1991, 13.
Stewart, Thomas A.  "Using Market Forces to Save Nature."
     Fortune, January 14, 1991, 42-3.
"The Business of Business?"  Utne Reader, September/October 1993,
     67-74.
Tye, Larry.  "Environmentalists Map Ways for Consumers to Help
     Save the Forests."  Boston Globe, April 10, 1989, 11:1.
Williams, Alex.  "Morally Correct Munchies."  New York, November
     5, 1990, 30.