The ‘egg conspiracy’: government-back lobby wanted to ruin a startup that makes eggless Mayo
A startling report by The Guardian reveals how the American Egg Board (AEB) - a government-backed board which gets a levy of 20 cents per case of eggs sold by its constituent members - lobbied against a food startup that's been gathering steam lately. Feeling threatened, AEB used its influence to put pressure on the FDA, USDA and Unilever to basically ruin Hampton Creek's business. Hampton Creek is a Silicon Valley startup which has so far gathered $120 million in funding. Its flagship products include eggs made out of plants and egg-less mayo, called Just Mayo which Joanne Ivy, president of the American Egg Board, refers to as “a crisis and major threat to the future of the egg product business.”
A startling report by The Guardian reveals how the American Egg Board (AEB) – a government-backed board which gets a levy of 20 cents per case of eggs sold by its constituent members – lobbied against a food startup that’s been gathering steam lately. Feeling threatened, AEB used its influence to put pressure on the FDA, USDA and Unilever to basically ruin Hampton Creek’s business. Hampton Creek is a Silicon Valley startup which has so far gathered $120 million in funding. Its flagship products include eggs made out of plants and egg-less mayo, called Just Mayo which Joanne Ivy, president of the American Egg Board, refers to as “a crisis and major threat to the future of the egg product business.”
The conspiracy was revealed after more than 600 pages of emails between AEB members and other industry key players were collected under the Freedom of Information Act (Foia). In short, the AEB exerted its influence to get Hampton Creek sued by Unilever (lawsuit since ceased), which makes Hellman’s mayonnaise, on the grounds Just Mayo shouldn’t be called mayo given it doesn’t contain eggs. Although the lawsuit was dropped, the FDA – pressured by AEB – ordered Hampton Creek to change its name.The AEB also hired a PR firm to contact bloggers and “encourage their readers to make a conscious decision to choose real and sustainable foods, like eggs, on their path to a healthier lifestyle.” In some of the emails, there was even talk of ordering a ‘hit’ on the Hampton Creek founder.
Key findings reported by The Guardian:
Outgoing AEB head Joanne Ivy advised Unilever on how to proceed against Hampton Creek after the food giant filed a false advertising lawsuit against its rival last year.
The Department of Agriculture’s national supervisor of shell eggs joined the AEB in its attack on Hampton Creek, suggesting Ivy contact the Food and Drug Administration (FDA) directly about Just Mayo with her concerns. The FDA later ruled Just Mayo must change its name.
The AEB attempted to have Just Mayo blocked from Whole Foods, asking Anthony Zolezzi, a partner at private equity firm Pegasus Capital Advisors and self-described “eco-entrepreneur”, to use his influence with Whole Foods to drop the product. (Whole Foods still sells Just Mayo.)
More than one member of the AEB made joking threats of violence against Hampton Creek’s founder, Josh Tetrick. “Can we pool our money and put a hit on him?” asked Mike Sencer, executive vice-president of AEB member organization Hidden Villa Ranch. Mitch Kanter, executive vice-president of the AEB, jokingly offered “to contact some of my old buddies in Brooklyn to pay Mr. Tetrick a visit”.
The AEB’s research arm, the Egg Nutrition Center (ENC), tested the strength of Hampton Creek’s patent for its egg replacer, Beyond Eggs, using a consultant, Gilbert Leveille. Leveille concluded that the patent was “not very strong and could be easily challenged with an alternate product”, he said in an email to Kanter. “Were I in your position I would focus on nutritional quality and on the emerging science, much of which ENC has sponsored,” Leveille wrote.
Josh Tetrick, the founder of Hampton Creek, says he was “shocked” when he was first handed the emails, but not entirely surprised. He says he won’t let himself be bullied and will fight back for the right to the Just Mayo label.
“I’m not entirely surprised that some industries that are lost in the past a little bit are fighting so hard,” he said. “Even though it was joking, some of those notes about putting a hit out – that’s some reckless stuff.”
“We don’t have any plans on changing the name,” he said. “Names matter, and they influence people. We want to connect to the everyday person who’s shopping at the Dollar Tree or shopping at Walmart.”
I’m not sure if anything the AEB has done is illegal per se, but it’s definitely immoral to say the least. Having their tentacles stuck through all sorts of powerful places, some boards and companies think they’re untouchable. But when a competitor is seen as a risk, it has to be liquidated. This time, for the AEB at least, this could severely backfire. But apart from some people losing their heads, will something dramatic change? I don’t know, but we can all at least do our own part. Eggs are important (I eat eggs every couple of days), so there’s no chance in boycotting them (or you could try). You can, however, send a letter to your local producer or distributor and express your disdain.