Unilever sues Hampton Creek Foods for false advertising: Just Mayo is masquerading as a mayonnaise and stealing market share from Hellmann’s

In the lawsuit*, filed in New Jersey on October 31, Unilever says the federal standard of identity for mayonnaise (21.CFR.169.140​​) stipulates that it must contain “one or more… egg yolk-containing ingredients” .​  ​Under the section entitled ‘nomenclature, it says:“The name of the food is ‘Mayonnaise’.”​

It adds: “Under federal regulations, common dictionary definitions and as consumers understand it, mayonnaise or ‘mayo’ is a product that contains eggs​.”

But Just Mayo - made from canola oil, yellow pea protein and other ingredients -  is “not mayonnaise at all​”, says the lawsuit, which accuses Hampton Creek of false advertising under the Lanham Act, violation of the New Jersey Fraud Act, and breaching unfair competition laws in multiple states.

Just Mayo already is stealing market share from Hellmann’s​

Moreover, Just Mayo, which features an egg-shaped image on its label, and is referred to as ‘mayo’ and ‘mayonnaise’ in some marketing materials, does not taste or perform like ‘real’ mayonnaise, claims Unilever.

The false and deceptive product name, packaging and advertising “damages the entire ​[mayonnaise] product category”, ​and has “already caused consumer deception and serious irreparable harm to Unilever”, ​alleges the lawsuit, which is seeking an injunction to block the sale of the product, along with damages.

“On information and belief, Just Mayo already is stealing market share from Hellmann’s.”​

Josh Tetrick: I have a ton of respect for [Unilever CEO] Paul Polman as a leader​

So what does Hampton Creek Foods​​ make of the lawsuit?

Speaking to FoodNavigator-USA on Saturday, CEO Josh Tetrick said he had taken legal advice when developing the Just Mayo name and noted that the standard of identity explicitly refers to ‘mayonnaise’, not ‘mayo’, which, he noted, is also used by other vegan spreads such as Boulder Brands' Earth Balance egg-free ‘Mindful Mayo​​’.

Given that he greatly admired Unilever CEO Paul Polman and had received positive feedback about his business from senior executives at Unilever as recently as this week, the lawsuit was dispiriting, said Tetrick, who said he was not clear if Polman had personally sanctioned it.

He added: “I have a ton of respect for Paul as a leader. He’s also been very public about how ​sustainable food ​will ‘require completely new business models’, so I find this a bit odd.​

“Unilever itself has tried to make egg-free mayo, without much success, and maybe I’m being naiive, but I feel sure that if Paul were aware of this lawsuit that he would pause for a moment and ask, is this who we really are?”​

It’s not that eggs are bad, it’s the industrial scale production of them is the problem ​

As for consumer deception, while Just Mayo does not shout about its egg-free credentials on the front of pack, few consumers familiar with the brand or with Hampton Creek were probably unaware that it was egg-free, given that the whole rationale behind the product stemmed from Tetrick’s well-publicized dislike of industrialized egg production, he said.

“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 9.3bn 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.”​

But why didn’t he just call his product ‘vegan spread’ or something else?

He said: “We like the way Just Mayo rolls off the tongue and we believe we are on the straight and narrow, legally. But this isn’t about legal technicalities. The bottom line is we do not solve big problems in the food industry unless we get out of these antiquated boxes we have stuck ourselves in.”​

Unilever: In fact, the product is 'Just NOT Mayo'​

But a Unilever spokesperson told FoodNavigator-USA: “For more than 100 years, Hellmann’s has been committed to quality, authenticity and real mayonnaise. We brought this lawsuit because use of the Just Mayo name blatantly misleads consumers.​

"In fact, the product is Just NOT Mayo as it does not contain one of mayonnaise’s key ingredients – eggs – in violation of the federal regulations that are in place to protect consumers... Unilever fully supports providing consumers with choices, but we do not support false and misleading labels.”​

Corporate bullying?​

From a PR perspective meanwhile, the case has already prompted a backlash against Unilever, which is being painted as a “corporate bully”​ in a petition​​ on change.org endorsed by the Travel Channel's Andrew Zimmern urging it to “focus more on creating a better world rather than preventing others from trying to do so”.​

Unilever, adds the petition, is “relying on an archaic standard of identity regulation that was created before World War II” ​while Hampton Creek is using plants to “reduce greenhouse gas emissions​” and “end the cruel treatment of animals​”.

One commentator supporting the petition said: “Unilever, don’t be silly. This lawsuit just makes you look foolish.”​

Ivan Wasserman, partner in the Washington DC office at law firm Manatt, Phelps and Phillips, told FoodNavigator-USA: "Even if they are right, big companies have to think of the potential PR ramifications before suing smaller ones. In David and Goliath battles, generally very few root for Goliath."​

Legal questions​

David Biderman, a partner in Perkins Coie’s Consumer Class Action Defense practice, told us that aside from whether Hampton Creek is violating the standard of identity (is mayo distinct from mayonnaise?) Unilever "​is going to need to show the Just Mayo product is misleading to a reasonable consumer"​.

And he added:"And because the terms 'mayo' and 'mayonnaise' are used interchangeably, Unilever is going to say this is indisputable. Hampton Creek will argue that its name is so closely associated with being an egg free company that consumers are not confused. I would expect a battle of the consumer survey experts in bringing this to the judge."​

‘Using plants to make food better’​

San Francisco-based Hampton Creek Foods, which has attracted a significant amount of venture capital, talent and publicity in the past 18 months, has been systematically screening thousands of plants with a ‘laser-like focus on functionality’ to identify those with properties from coagulation, emulsification and aeration to coloring and sweetening.

However, it is best-known for Just Mayo, which has secured shelf-space at a number of leading retailers including Walmart, Dollar Tree, Costco, Safeway, Kroger and Whole Foods. 

Its second retail product, ‘Just Cookie Dough ’- a sorghum-based refrigerated cookie dough - has just launched in Whole Foods and Costco, while ‘Just Scrambled’ (like Egg Beaters - minus the egg) will follow next year. It is also in talks with a clutch of tier one food manufacturers about using its plant-based products as ingredients in a wide range of foods.

But its ambitions go far beyond egg substitutes, communications director Morgan Oliveira told FoodNavigator-USA in a recent interview​​.

“It's about using plants to make food better, in a totally unique way from any other company out there today. We're screening 400,000+ plants from around the world to​ [help us make] food tastier, more sustainable, more convenient, more affordable, and healthier. ​Today it may be mayo and cookie dough, but we're also looking at food dyes, trans fats, and even sugar.” ​

*​The case is Conopco Inc (doing business as Unilever) vs Hampton Creek, Inc, 14-cv-06856.

Click HERE​​ to find out what legal experts have to say about the case.