Unilever Sues Vegan Mayo Company: Horses, Typewriters, and Eggs

Billion-dollar mayonnaise giant Unilever sued tiny startup Hampton Creek. Why? Because their vegan Just Mayo product is egg-free.
Last Updated: November 15, 2014

This week has offered the strongest evidence yet that the days of dairy products and eggs being a dominant force in packaged foods are numbered. Unilever’s Hellmann’s and Best Foods brands have dominated America’s mayonnaise market for generations. But this week Unilever filed a lawsuit against tiny startup Hampton Creek, whose vegan Just Mayo product is getting stocked by many of America’s top grocery chains, including Walmart and Costco. While vegans around the world are venting their outrage on social media sites, the truth is that this lawsuit may turn into the best thing that ever happened to layer hens, Hampton Creek, and the vegan movement. Unilever is doing the stupidest thing imaginable, and let me tell you why.

Let’s take a step back from the lawsuit to gain some perspective on what’s really going on. This story hinges on technological change happening within the food industry. A hundred years ago, horses dominated local transportation. But then automobiles came along and presented advantages so compelling that the entire horse transportation industry collapsed in barely a decade. Today about the only remnants of this are horse carriages in cities (but even these won’t be around much longer thanks to animal welfare concerns.) Back in the day, the biggest and smartest horse carriage companies in the world saw the writing on the wall and transitioned their businesses into building automobile bodies (Early cars were in fact called “horseless carriages” and “coaches”.)

The exact same thing happened in the 1980s with typewriters getting replaced by word processors. Prior to about 1980 computers were so expensive that they were a specialty item that couldn’t compete with typewriters. And IBM was hands down the dominant typewriter company in the business. But IBM saw where things were headed and got in front of the trend, pivoting perfectly to the IBM PC and dominating the computer industry for a decade (until they realized that much of the computer industry was becoming so commodified as to make squeezing out profits a game better played by companies that specialize in low-margin electronics.)

Horses and typewriters were great at their jobs—until cars and word processors came along they had the market for personal transportation and office printing locked up. And in much the same way, we’re at the same tipping point for both eggs and dairy products.

Just a decade ago, eggs and dairy products had unique properties that nothing from the plant world could match. Eggs offer terrific binding and glazing properties for baked goods, and they can be whipped up into various emulsions suitable for mayonnaise, flan, angel cake, and meringues. Dairy products likewise offer delicious creamy textures, and rich fatty flavors.

In 1990 and even in 2000, there was really nothing in the vegan world that could give eggs and dairy products legitimate competition. But fundamentally, this was a technology problem, and it turns out that if you throw sufficient R&D money into replicating the properties of eggs and dairy, you’ll make amazing headway.

While there’s still work to be done, it’s clear that the fine people at Earth Balance have already largely cracked the code for making perfect dairy substitutes. After starting with margarines that taste just as good as butter, they’ve branched out into a line of other fantastic dairy-free products. Their Vegan Cheddar Mac and Cheese and their Sour Cream and Onion Kettle Chips have to be tasted to be believed.

Hampton Creek has turned its R&D toward making vegan egg products. And by all accounts they’ve succeeded brilliantly. They now have a growing line of products, and their flagship “Just Mayo” product is widely considered to be amazing. In fact, Time magazine says: “The mayo is indistinguishable from regular mayo.”

All of this puts Unilever in a horrible position. Vegan mayo likely costs a lot less to make than egg-based mayo. And there are doubtless fewer liabilities in terms of food safety issues. Nor does a vegan mayo company risk having its egg suppliers exposed for horrific animal cruelties—as has happened to countless companies that base their products on battery eggs or milk products.

So Unilever has every reason to innovate. But instead, they’re calling in the lawyers. They’re claiming Just Mayo’s existence has “caused consumer deception and serious, irreparable harm to Unilever.”

At issue is a 1957 FDA decision specifying that products designated as “mayonnaise” must contain eggs. But nowhere on Just Mayo’s label or in its advertising does it call itself mayonnaise. On the contrary, it says right on the front of the label that the product is “Egg Free.”

As with many David vs. Goliath battles, this one’s getting picked up by the media. Try to find a way of looking at this story where Unilever can be seen as the good guys—I certainly can’t. If you can make mayonnaise every bit as tasty without eggs, and in the process rid the product of animal cruelty, chicken slaughter (don’t forget that every commercial layer hen is slaughtered when her yields decline), and a ton of saturated fat and cholesterol, why wouldn’t you?

For every brand, but especially brands of food that you trust enough to eat, reputation is everything. And Unilever is putting their century-old brands at risk—and in the process giving Just Mayo immeasurable amounts of positive publicity. Just this past week, this story has already been covered by the Washington Post, The New York Times, the Wall Street Journal, Fortune, and dozens of other media outlets. And it’s clear that public sentiment is squarely on the side of Hampton Creek, which claims more than 39,000 messages of support since Unilever’s lawsuit was filed. You can’t buy that kind of publicity.

Any halfway educated marketer knows that it’s a fundamental blunder to even mention a smaller competitor. You’ll never see McDonald’s mention Burger King or Coca-Cola mention Pepsi. But now that eggs are about to go the way of the typewriter and the carriage horse, it’s clear that Unilever perceives its mayonnaise products are facing an existential threat—and that their best hope isn’t to innovate, it’s to get the lawyers involved.

In the long game, expect Hampton Creek to get bought out rather than shut down. It’s got exactly what the mainstream food industry needs; the key to making eggs obsolete when it comes to taste, cost, and healthfulness. Millions of people and billions of chickens agree.