Posts Tagged ‘Hamtpon Creek’

Hampton Creek targeted by USDA-controlled egg industry program

Potential legal violations uncovered in secret PR effort to damage egg-free competitor

Hundreds of pages of disclosed communications from the American Egg Board reveal a coordinated two-year plan to undermine and attack Hampton Creek, the San Francisco-based food company, seen as a “threat” and “major crisis” to the egg industry.

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One of the most important ways that industrial animal agriculture promotes its products is through Congressionally-mandated “checkoff” programs. Each industry member pays into a collective fund that is controlled and managed by the U.S. Department of Agriculture. The American Egg Board is the egg industry’s checkoff program. Very specific rules govern how it operates, all supposedly overseen by the USDA. The Egg Board’s stated mission (which stems from federal law) is “to allow egg producers to fund to carry out proactive programs to increase demand for eggs and egg products through research, education and promotion.”

And yet, USDA’s recent response to a Freedom of Information Act request reveals a number of highly questionable activities that likely violate federal law. The documents (summarized here) are mostly email exchanges between Egg Board executives and others in the egg industry, or with PR consultants, and reveal a disturbing pattern of attacks on Hampton Creek over a two-year period from 2013-2014. (There’s no indication that the campaign has stopped.)

As I documented last fall, Hampton Creek’s early success has touched a nerve in the industrial food industry. These documents show that the lawsuit by Unilever over the start-up’s Just Mayo product was child’s play compared to the Egg Board’s activities. Below is a summary of the most egregious communications.

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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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