Academic journal article Business Case Journal

With Egg on Its Face, Unilever Considers Pulling a Lawsuit over Hampton Creek's Egg-Free Mayo

Academic journal article Business Case Journal

With Egg on Its Face, Unilever Considers Pulling a Lawsuit over Hampton Creek's Egg-Free Mayo

Article excerpt

Introduction

Mid-December in 2014, Michael Faherty, vice president of the North American operations of corporate giant Unilever, sat in front of his desktop computer reviewing recent online articles and blog posts covering his company's decision to sue its competitor, Hampton Creek. Roughly six weeks earlier, Unilever, the maker of Hellmann's brand mayonnaise, initiated a lawsuit against the upstart Hampton Creek for false and misleading advertising related to its product Just Mayo. The onslaught of media attention triggered by the suit was something neither Unilever nor Faherty anticipated. While he and Unilever had minimized their exposure to the press, Hampton Creek's CEO, Josh Tetrick had been all over the media for weeks complaining about Unilever. But today was the worst. Several blogs reported that Andrew Zimmern's change.org petition to Tell Unilever to Stop the Bullying Sustainable Food Companies! had reached more than 100,000 signatures.

"This was getting out of hand," thought Faherty. As he continued to peruse the blogs, Faherty noticed so many more comments criticized Unilever for pursuing legal action against Hampton Creek than supported it. Faherty picked up his cellphone and scrolled through his contacts until he reached the number of the Manhattan-based law firm representing Unilever. He paused with his thumb poised to initiate what was sure to be a pivotal telephone call.

Background

Unilever

Far surpassing rivals like ketchup, mustard and soy sauce, mayonnaise was the top selling condiment in the United States (Businessweek.com, 2010). Hellmann's brand mayonnaise became a staple of the American condiment industry in the early years of the 20th century (Unilever, n.d.). Unilever was a global, multi-billion dollar enterprise based in London, England with US headquarters located in Englewood Cliffs, New Jersey. Unilever acquired Hellmann's brand mayonnaise in 2000 (Unilever Food Solutions, n.d.), and added it to its already vast portfolio of food, home, and personal care lines ranging from Country Crock and Lipton to Noxzema and Vaseline. Holding upwards of thirty percent of the market, Hellmann's brand was the definitive leader in the annual $2 billion mayonnaise industry (Businessweek.com, 2010).

Hampton Creek

San Francisco, California-based Hampton Creek was founded in the summer of 2011 and aimed to produce healthy and sustainable alternatives to egg-based foods (Mac, 2013). To that end, Hampton Creek maintained that its plant-based products were healthier and more environmentally friendly than their egg-based counterparts. Hampton Creek's flagship product was Just Mayo, a vegan mayonnaise-like spread made from Canadian yellow peas. Hampton Creek began selling Just Mayo in early 2014. Unlike traditional mayonnaise recipes, including the recipe used by Hellmann's brand, Just Mayo did not contain eggs (Just the Facts, n.d.).

According to Josh Tetrick, CEO of Hampton Creek:

It's not that eggs are bad, it's the industrial scale production of them is the problem. I would encourage people to buy free range eggs. But they are significantly more expensive, and if we want to feed 9.3 billion people by 2050, switching to free-range eggs is not the answer to the problem. It's about land, water, and animal welfare. Today, in the US, if you are using chicken egg in an industrial food product its origin will have been in a hatchery; you cannot make an industrial-scale mayo without participating in that process. And I think folks are pretty aware of our views on this (Watson, 2014)

We [my co-founder Josh Balk and I] believe that the thing that's affordable should be more healthful and taste better. Together we thought: What would the world look like in which doing something better for the [earth] was 30 or 40 percent less expensive, rather than 30 or 40 percent more expensive? And Josh said, 'Well, maybe we use plants instead of animals? …

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