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.
Started in 2011, Hampton Creek has received a lot of media attention (and financial backing) for its scientific approach to making plant-based alternatives to eggs, aiming at the heart of a cruel and unsustainable industry. The company’s first consumer product, Just Mayo has enjoyed a fast rise to success, not only in natural retail channels like Whole Foods, but also mainstream markets such as Walmart, Costco, Target, and even Dollar Tree. Unlike previous vegan spreads that mimic mayonnaise, Just Mayo is not aimed at just being a niche product; and that’s exactly has Unilever, maker of Hellmann’s and Best Foods, shaking in their boots.
Instead of keeping up with changing times, Unilever is determined to remain stuck in the past. In its legal complaint, the company argues that Just Mayo cannot possibly be mayonnaise because both the dictionary and the Food and Drug Administration say that mayonnaise contains egg. Over and over, like a hurt child, Unilever lawyers argue: “Just Mayo is not mayonnaise. It does not contain any egg.” Yes, we know. That’s Hampton Creek’s entire business model, they aren’t hiding it. It’s right there on the ingredient label. No eggs.
Hampton Creek is completely up front about what it’s doing: making a plant-based mayonnaise. Moreover, the product has been covered in major media outlets like Time, Forbes, and Fortune so how can it possibly be deceiving anybody?
This case is just a desperate attempt to get the courts to intervene in marketplace competition. (Funny how Corporate America loves the term “free market” except when they are under threat.) Unilever’s own legal complaint says it best: “Hampton Creek is seizing market share from Unilever’s Best Foods and Hellmann’s brands of mayonnaise products.” That’s called capitalism.
Unilever is asking the court not only to make Hampton Creek stop using the Just Mayo name (and remove all current product from store shelves), but also to pay Unilever the amount obtained from profits, plus triple damages. It’s quite likely this arrogant move will backfire, as the case could bring more sympathy, not to mention sales, to Hampton Creek. Maybe it’s time for a legal defense fund too. As I recently predicted, we are likely to see more of these sorts of legal challenges as innovation collides with dinosaur food companies unwilling to get out of the way, bolstered by a regulatory system maintaining the status quo.
Smart move or wrong move for Unilever?
This post is an excerpt of “Big Mayo Files Frivolous Lawsuit Against Eggless Competitor” on eatdrinkpolitics.com.