By Annie Gasparro
Unilever PLC on Thursday said it is withdrawing a high-profile
lawsuit it filed against a California food startup over the
marketing of mayonnaise.
Unilever, which makes Hellmann's and Best Foods brands of
mayonnaise, had accused California-based startup Hampton Creek Inc.
of false advertising for calling its egg-free spread " mayo," in a
complaint filed in U.S. District Court in New Jersey.
The consumer products giant alleged that the marketing for Just
Mayo was misleading to shoppers. The spread doesn't fit the U.S.
Food and Drug Administration's definition for mayonnaise because it
doesn't contain eggs. Unilever demanded that Hampton Creek change
its label, and sought compensation for unspecified damages,
claiming Just Mayo was stealing market share from Hellmann's.
Hampton Creek was founded three years ago to produce substitutes
for common egg-based foods that instead are based on plants, which
the company says is healthier and more environmentally friendly.
The startup has raised $30 million from investors including
Microsoft co-founder Bill Gates.
Established food companies have been grappling with growing
competition from natural- and organic-food producers that are
luring skeptical consumers away from traditional packaged
foods.
The Unilever suit, filed Oct. 31, quickly gained national
attention in part because of a petition on Change.org asking
Unilever to "stop bullying sustainable food companies." That
petition had 112,392 supporters as of Thursday afternoon.
As the petition gained traction last month, Unilever stuck to
its guns, saying the lawsuit is to protect consumers from false
advertising, not to knock small, or socially responsible, food
makers.
Mike Faherty, vice president for Unilever's North American food
business, said Thursday that Unilever decided to drop the lawsuit
"so that Hampton Creek can address its label directly with industry
groups and appropriate regulatory authorities."
He praised Hampton Creek's corporate purpose and morals, saying
that because of that, Unilever thinks Hampton Creek "will take the
appropriate steps in labeling its product going forward."
Hampton Creek didn't immediately respond to a request for
comment. It said last month that it wouldn't make adjustments. The
FDA declined to comment.
Write to Annie Gasparro at annie.gasparro@wsj.com
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