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Unilever Drops Mayo Lawsuit Giving Hampton Creek Another PR Boost

You almost have to feel sorry for Big Mayo. After getting slammed with negative press last month for its ill-conceived lawsuit against Hampton Creek, Unilever raised the white flag by dropping the case. But instead of burying the news late on a Friday, the company put out its release at 6pm on Thursday, at the end of what was a huge news day for Hampton Creek. The San Francisco start-up announced an additional $90 million in investment capital, a strong indicator that the lawsuit actually attracted more investors instead of scaring them off.

A Google news search this morning for Hampton Creek reveals about 200 news stories, a mix of coverage for its fundraising success and the lawsuit being dropped. In other words, Unilever gave reporters an additional angle to shine a positive light on Hampton Creek and keep the media coverage going from yesterday into today. (My favorite headline is from CNN Money: “Unilever lays an egg: Drops Just Mayo lawsuit”.)

But what most media outlets ignored was how unprecedented it is for the party filing a lawsuit like this to simply drop it, without getting anything in return, and before any court hearings. It’s clear that Unilever realized its mistake and just wanted the whole thing to go away, and just in time for the holidays. It’s a fitting end to a colossal PR blunder. As the Los Angeles Times put it: “The mayo war was over before it even began.”

Hampton Creek raises $90 million as investors bank on a plant-based future

Update at 3:30 pm PT: Unilever just announced it’s dropping the lawsuit. Great idea.

Here’s a winning formula any start-up would want to emulate: Step 1) Engineer a high-quality, more sustainable product to compete in a multi-billion dollar category such as mayonnaise; Step 2) When your competition gets mad enough to file a lawsuit against you, use it your advantage in the media; Step 3) Raise $90 million from investors.

That’s pretty much how Hampton Creek has played it. As I wrote about last month, Unilever sued Hampton Creek over the San Francisco start-up’s Just Mayo product for not containing eggs, which is the entire point of the product. Unilever (maker of Hellmann’s) was upset because Just Mayo was “stealing market share”. But the lawsuit backfired when the multinational giant was excoriated in the media for bullying the little guy. Meanwhile, Hampton Creek received heaps of positive press and increased sales. According to one estimate, just a week of media attention generated about $21 million of free advertising for Hampton Creek.

All that certainly didn’t hurt the company’s efforts to attract additional capital investments, as Hampton Creek has just raised an additional $90 million, bringing the total to $120 million. According to the San Francisco Business Times, the lawsuit “may have helped solidify the company in the eyes of investors”.

The vote of confidence, particularly from high-tech investors, signals a bright future for innovative companies willing to challenge the status quo. New mission-driven companies like Hampton Creek offer a beacon of light to investors seeking an opportunity to put their money toward positive solutions such as creating delicious replacements for unsustainable animal foods. And if they ruffle some feathers of Big Food along the way, that’s a good sign.

Hampton Creek CEO Josh Tetrick (pictured above) told the San Francisco Business Times:

I think what [the lawsuit] did is that it showed all of these people, and our funders, that we’re really not [messing] around. When we say we have a point of view about being mainstream and making healthier food more affordable — even when one of the biggest players in the world comes down on us in a lawsuit — we hold our ground.

Keep holding that ground, it’s working wonders, while making Unilever look even worse.

Big Food Confronts High-Tech Challengers

Innovative food startups trying to curb soaring meat production can expect legal and political obstacles

Growing more and more animals for food is unsustainable. The World Health Organization predicts that global annual meat production will increase from 218 million tons in 1998 to 376 million tons by 2030. That uptick will bring with it numerous negative consequences, including deforestation, animal manure contamination of air and water and excessive use of water supplies and harmful energy sources, not to mention contributions to climate change.

Recognizing this problem, food startups backed by significant venture capital are hoping to create food products without using animals. The goal: provide a viable alternative to the existing animal foods production model that is wreaking havoc on the environment, public health and animal welfare. As a new wave of products aiming to mimic meat, eggs and dairy comes to mainstream supermarkets, Big Food’s pushback will only mount — and what started in the lab will soon make its way to the political arena.  Read rest at Al Jazeera America …

Walmart’s Hunger Games

New report from Eat Drink Politics shows how the nation’s largest retailer is a poverty incubator, contributing to the hunger crisis in America while Walmart and the Walton family get richer

La’Randa Jackson, shown here, supports her mother and her younger brothers by working at the Walmart store in Cincinnati, Ohio. “I skip a lot of meals,” she says. “The most important thing is food for the babies, then my younger brothers. Then, if there’s enough, my mom and I eat.”

La’Randa works for the nation’s largest private employer, and she is not alone in her struggle to afford enough food.

On $10.10 an hour and an unpredictable part-time schedule, Cantare Davunt – a Walmart customer service manager from Apple Valley, Minnesota – winds up digging into her cabinets for older, non-perishable foods like Ramen so she can have a hot meal. Diana Tigon, a cashier at the Walmart store in Arlington, Texas, often finds she is strapped for cash and during rough weeks goes full days without eating meals.

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Hey Unilever, is it mayonnaise or mayonnaise dressing?

canola oil Hellmanns

<strong>Canola</strong> Cholesterol Free Mayonnaise Dressing

 

The image on the left is a picture taken by Josh Tetrick, CEO of Hampton Creek, at a Safeway in San Francisco on Sunday, November 16. It shows the Best Foods Canola Cholesterol Free variety labeled “mayonnaise.” However on the Best Foods website is the image on the right, which has the same product labeled “mayonnaise dressing”. According to federal law, to be called “mayonnaise” the product must contain at least 65 percent oil by weight, which this product does not. For more details on mayogate see my post from yesterday.

Mayogate: Unilever Doctoring Customer Reviews

Big Mayo scrubbing Hellmann’s website to cover up deception after filing lawsuit against Hampton Creek

Hellmann's Page

Screen shots of Hellmann’s promotion showing altered customer reviews. (Click for larger resolution.)

Last week I wrote about the negative PR backlash against global giant Unilever for its desperate lawsuit against Hampton Creek over Just Mayo, a new product made without eggs that is quickly stealing market share from twin brands Hellmann’s and Best Foods, the market leaders. Most corporations shy away from filing these sorts of competitor lawsuits and Unilever is about to find out why.

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Unilever’s Bullying Backfires, Boosts Hampton Creek

Negative media coverage of Big Mayo lawsuit goes viral in case study of PR blunder

All of these images were used in recent media stories of Big Mayo lawsuit

Business schools love a good case study, especially when a big corporation blows it. Now they can add Unilever’s colossal public relations mistake to their list. Wall Street Journal tech columnist Christopher Mims summed it up with this tweet: “Giant Corporation Generates Huge Quantities of Free Advertising and Brand Equity For Tiny Rival by Suing It”.

As I predicted earlier this week in my post about the maker of Hellmann’s suing start-up Hampton Creek over egg-free mayonnaise, the press and social media firestorm in just the past few days has already given Unilever a black eye, while the Just Mayo brand enjoys free positive PR. Almost all of the stories (of more than 200) I saw online were in Hampton Creek’s favor, framing the lawsuit as a classic David versus Goliath fight, at times mocking Unilever.

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Big Mayo Files Frivolous Lawsuit Against Eggless Competitor

Food Giant Unilever suing Hampton Creek for daring to offer a cruelty-free and sustainable alternative, whining that: “Just Mayo already is stealing market share from Hellmann’s”

Just Mayo

Business school pop quiz: What’s a $60 billion global behemoth to do when a San Francisco start-up cuts into their profits? If answers like “innovate your products” or “hire a better marketing team” come to mind, you must not work at Unilever. That company’s response to competition is to take them to court. Unilever owns many top food brands such as Best Foods (and is also the largest deodorant maker in the world). The company is suing Hampton Creek for unfair business practices and false advertising, claiming their plant-based product called Just Mayo is deceptive to consumers because it doesn’t contain eggs. Actually that’s the whole point: to not use eggs.

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Big Food Uses Dirty Tricks in Ballot Fights over GMO Labeling and Soda Taxes

Voter initiatives in California, Oregon and Colorado illustrate what’s at stake in the food wars

On Nov. 4, voters in three Western states will decide four food-related ballot measures that seem to have little in common: The two state-level measures (in Oregon and Colorado) would require genetically engineered (aka GMO) foods to be labeled as such, and two local initiatives in California (in San Francisco and Berkeley) would place a small tax on sugary soft drinks. But they do have something in common. A large portion of the opposition for all four measures is being funded by two megacorporations: Coca-Cola and PepsiCo. Moreover, the opposition is using many of the same tactics. Read rest at Al Jazeera America …

Protein Politics: Vegetarian Meat Company Field Roast Gets Booted From Canada

As a lawyer who has called out plenty of transgressions by unethical food companies, it’s frustrating when the law gets it wrong. That’s exactly what happened to the alternative meat company Field Roast, based in Seattle, but also selling products to our neighbors to the north. That is, until the Canadian government informed Field Roast that the company’s products were mislabeled. Not only that, the products also had to be tested — wait for it — on live animals.

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Contact Michele Simon: michele@eatdrinkpolitics.com

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