Unilever has withdrawn its federal false-advertising lawsuit against Hampton Creek, which charged that the challenger brand deceived consumers with its Just Mayo label. The reasoning was that it doesn't contain eggs as required by U.S. Food and Drug Administration mayonnaise regulations.
The lawsuit, filed Oct. 31 in U.S. District Court in New Jersey, had sparked often critical and satirical coverage, plus a change.org petition that drew more than 112,000 signatures asking Unilever, which markets Hellman's and Best Foods mayonnaise, to "stop bullying sustainable food companies."
Hampton Creek says its pea-based alternative requires less energy and produces fewer carbon emissions than eggs. Just Mayo has an egg on its label with a plant growing through it in an effort to show that it's a plant-based alternative, and the label states it's "egg free."
In its social-media response to the lawsuit, Hampton Creek cited an email received from Unilever Senior VP-Marketing Marc Mathieu days after the lawsuit was filed, but before it was publicized in November, that said: "Love what you are doing," adding: "Very much in line with our Unilever Project Sunlight," which is the company's sustainability program.
In a statement, Mike Faherty, VP-Foods for Unilever North America, said the company had decided to withdraw the lawsuit "so that Hampton Creek can address its label directly with industry groups and appropriate regulatory authorities. We applaud Hampton Creek's commitment to innovation and its inspired corporate purpose. We share a vision with Hampton Creek of a more sustainable world. It is for these reasons that we believe Hampton Creek will take the appropriate steps in labeling."
In an interview last month, Hampton Creek CEO Josh Tetrick predicted Unilever would dismiss its lawsuit in the wake of the publicity.
"We're happy to move on as a company, and I think it's a positive thing for Unilever too," Mr. Tetrick said today. "They're moving in the right direction, and I think most people at Unilever probably realized this lawsuit was antithetical to their corporate ethos. …That's something to be commended, not something to gloat about for us."
Unilever's lawsuit was the latest of three false-advertising suits by the biggest global packaged-goods players against much smaller rivals in the U.S. this year. While small, Hampton Creek is far from a bootstrap outfit. The company announced yesterday it now has raised $90 million in venture capital, the latest in a round whose investors include Salesforce CEO Marc Benioff. Prior investments have come from Yahoo co-founder Jerry Yang and Bill Gates via Khosla Ventures.