Archive for December, 2014

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.

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Contact Michele Simon: michele@eatdrinkpolitics.com

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