We are submitting a complaint against Danone North America (Danone N.A.), owner of Horizon Organic regarding a violation of the B Corp Declaration of Interdependence. We request that the B Lab conduct a full investigation on this matter.

As you know, all B Corporations must commit to incorporating the following declarations into their business practices:
That we must be the change we seek in the world.
That all business ought to be conducted as if people and place mattered.
That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.

Complaint Details
In August 2021, Danone N.A.’s wholly-owned subsidiary, Horizon Organic, ended its contracts with 89 Northeast organic dairy farms. These family farms had maintained their part of their supply contract for Danone N.A., yet Danone N.A. ended these contracts simply because the farms no longer fit their “manufacturing footprint.” This massive exit by Danone N.A. from the northeast region has severely hurt these farm families and the region’s rural economy and is a direct violation of the B Corp Declaration of Interdependence. Danone N.A.’s conduct must be investigated and we recommend removing their B Corp status. This corporate behavior diminishes consumer confidence in the value of the B Corp label. If you do not take effective action, consumers will lose trust in your value-based label. Recently nine organic organizations submitted a petition with over 15,000 signatures to Danone N.A. calling Danone N.A. to reverse their decision. The public is watching this egregious corporate action and highlighting the incongruity with B Corp claims.

Horizon Organic has supported the growth and viability of small, organic family farms in the Northeast region for over two decades. These family farms have helped build the reputation and value of the Horizon Organic brand and have contributed substantially to the bottom line of both Horizon and Danone N.A. The 89 farm families’ dairy farms are thriving independent businesses that make substantial contributions to their rural economies and communities. Horizon Organic’s support of family farms, like the 89 in the Northeast, is part of the business model that put Danone N.A. in a position to qualify as a B Corporation. B Corp meticulously outlines three areas of social responsibility in its mission statement that B Corporations must embody. These include corporate responsibility to their workers, the communities they serve, and the greater environment. Danone N.A., by abruptly ending contracts with 89 family farmers, has directly violated each of these responsibilities and we implore B Lab to investigate and take appropriate action.

Profits over People
Danone N.A.'s decision to abruptly sever contracts with an entire U.S. region affecting 89 family farms was one based solely on maximizing profits, regardless of the devastating consequences for their suppliers’ families and rural communities. This action ignores the decades of corporate profits gained from the work of these independent dairy farms and the social reputational benefits they helped the company earn from consumers. This abrupt action directly violates a commitment to conducting their business as if people and place mattered. It also violates Danone N.A.’s corporate declaration to aspire to do no harm and benefit all through their products, practices, and profits.

Danone N.A.’s 2020 corporate revenue of $27 billion gives them the flexibility to have planned for a regional exit that treated the 89 dairy farm families as if they and their communities mattered. They have instead chosen to cause direct harm to these farmers and their rural communities in favor of Danone N.A.’s corporate profits. Choosing not to invest in their family farmers is in violation of their B Corp commitment of “balancing profit with purpose” and “using business as a force for good.”

Profits over Community
Having thriving organic farms keeps rural communities vibrant and supports healthier communities. Farmers rely on stable relationships with their buyers to be able to make decisions for their farm business, make financial projections for farm investment and modernizations, and pay off farm debt. Danone N.A. misrepresented their commitment to their stakeholder organic farm suppliers; their decision to abruptly end contracts with all 89 farms from a whole region demonstrates that they are not committed to an interdependency with their stakeholders and do not take responsibility for the future generations of their organic dairy farm families.

This action has affected and will continue to impact the communities that Danone N.A. had supported through decades of committed business partnerships. When organic dairy farms spend their profits locally, it benefits the entire community. For every dollar a dairy farm spends locally, about $2.50 in wages and other business transactions are contributed to the local, rural economy. Independent family dairy farms also create jobs off the farm in related sectors like sales and service, animal health, nutrition, ag input suppliers, lenders, transportation, accountants, and agronomists. Research has demonstrated that one New York state cow is able to spread an extra $15,000 in economic revenue. Removing 89 family farms from rural communities in the Northeast in one fell swoop will have a drastic impact on the economic viability of these rural communities and the urban communities they serve.

Profits over the Environment
Organic dairy farms are important to the Northeast environment and to climate change mitigation. These farms conserve open spaces, establish wildlife habitats, filter clean water, and conduct effective long-term carbon sequestration, and return nutrients to the soil. Organic farmers exceed dairy farm environmental regulations, managing their pasture, manure, soil, water, and cows to be a part of a healthy agroecological system. Danone N.A.’s exit from the northeast is leaving these 89 organic dairy farms without a market, families are likely to be forced to either sell the farm or sell into the conventional dairy market--losing many of the environmental standards maintained under organic certification.

B Lab Must Follow Through on the Credibility of their Label
We understand that Alexa Harrison, senior public relations manager at B Lab U.S. & Canada, emailed Organic Insider on 10/26/2021 with the following message:
B Lab (the entity that oversees the B Corp certification) has reviewed this situation internally and found that Danone North America is not in violation of the B Corp standards. B Lab’s standards were created to provide a framework for continual improvement and evaluation of positive impact and negative risk of a company’s social and environmental performance, transparency, and accountability throughout all aspects of their business. Our certification standards do not restrict a B Corp’s supply chain selections e.g. requiring a certain type of product from a certain type of supplier. Danone North America has been and continues to be a strong advocate for the B Corp movement, and while these decisions could impact a company’s score, it does not affect certification status.

We strongly encourage you to re-evaluate this decision with the evidence before you. As consumers, Harrison’s response provides little confidence in the value of B Corp and its ability to ensure that its corporations stay committed to the B Corp Declaration of Interdependence.

B Corp claims that corporations operate in a framework of continual improvement of (social and environmental performance, transparency, accountability, etc.), which is why B Corp must make decisions on their members’ impacts on the supply chain, and violations of its declaration of interdependence. When a B Corporation is clearly not improving but takes an action that harms those it has committed to treating with respect, B Lab must investigate and address those violations. B Corp enforcement must be meaningful and set an example to other B Corporations of the seriousness of the social commitments the label embodies.

We call on B Lab to investigate and act on this decision by Danone N.A./Horizon Organic and send the message that B Corporation's status is credible and held accountable when a company acts in direct opposition to its B Corp commitments. We encourage you to put Danone N.A.'s B Corporation status on probation until they reinstate the contracts of these 89 farms and invest in these communities that contributed to the success and social claims of Danone N.A. If they will not do that, we ask that you revoke their B Corporation status.

SUPPORTING DOCUMENTATION

New York State, Food for Thought, Version 2. https://www.nysenate.gov/sites/default/files/articles/attachments/Food%20For%20Thought%20V2.6%20%28final%29.pdf.
J.K. O’Hara, R.L. Parsons, “The economic value of organic dairy farms in Vermont and Minnesota,” Journal of Dairy Science, Volume 96, Issue 9, 2013, pg. 6117-6126. https://doi.org/10.3168/jds.2013-6662.
https://www.google.com/url?q=https://www.fsa.usda.gov/Internet/FSA_File/final_report_draft_011211.pdf&sa=D&source=docs&ust=1635274094285000&usg=AOvVaw328QLjKHVJmsJWGjh3vkT9
US Department of Agriculture Dairy Industry Advisory Committee Final Report, January 2010, “Recommendations for Public Policy to Improve Dairy Farm Profitability and Reduce Milk Price Volatility,” https://www.google.com/url?q=https://www.fsa.usda.gov/Internet/FSA_File/final_report_draft_011211.pdf&sa=D&source=docs&ust=1635274094285000&usg=AOvVaw328QLjKHVJmsJWGjh3vkT9
Nestly, Marion, Food Politics, “Bad move: Danone drops organic dairy contracts in Northeast”
https://www.foodpolitics.com/2021/08/24686/ (opinion piece)
Press Herald, “Organic dairy farmers face uncertain future after food conglomerate cuts contracts,” https://www.pressherald.com/2021/08/29/organic-dairy-farmers-face-uncertain-future-after-food-conglomerate-cuts-contracts/ (Maine Farmers)
https://www.burlingtonfreepress.com/story/money/2021/10/26/horizon-organic-representative-peter-welch-asks-company-restore-contracts-vt-dairy-farms/8550117002/ (Vermont-Rep. Peter Welch)
https://www.timesunion.com/state/article/Schumer-Danone-should-deliver-answers-on-cutting-16514634.php (New York- Sen. Chuck Schumer)
https://www.maine.gov/governor/mills/news/governor-mills-urges-usda-support-maine-organic-dairy-farms-wake-danone-decision-not-renew (Maine- Governor Janet Mills)
https://organicinsider.com/newsletter/b-corp-danone-certification-status-cut-contracts-89-organic-dairy-farmers-new-york-new-england-your-weekly-organic-insider/ (Statement from B-Corp)