Unilever’s Bullying Backfires, Boosts Hampton Creek
Business schools love a good case study, especially when a big corporation blows it. Now they can add Unilever’s colossal public relations mistake to their list. Wall Street Journal tech columnist Christopher Mims summed it up with this tweet: “Giant Corporation Generates Huge Quantities of Free Advertising and Brand Equity For Tiny Rival by Suing It”.
As I predicted earlier this week in my post about the maker of Hellmann’s suing start-up Hampton Creek over egg-free mayonnaise, the press and social media firestorm in just the past few days has already given Unilever a black eye, while the Just Mayo brand enjoys free positive PR. Almost all of the stories (of more than 200) I saw online were in Hampton Creek’s favor, framing the lawsuit as a classic David versus Goliath fight, at times mocking Unilever.
The Washington Post was perplexed, running the headline, “Big Food’s weird war over the meaning of mayonnaise” and calling the case “a strangely defensive stance for Unilever, a Big Food titan that made more than $64 billion last year selling foodstuffs in nearly 200 countries (including I Can’t Believe It’s Not Butter!, a spread that is not butter”).
Here are a few more examples of media hits:
· The subtitle of the Fortune coverage was “Owner of Hellmann’s lashes out at a startup that is taking market share from the giant”
· Forbes reported that “A big guy is suing the little guy, and someone is going to end up with egg on their face”
· Time.com’s subhead read “In a David vs. Goliath battle over sandwich spread labeling, things could get messy”
· The Politico headline read “Food Startup Battles ‘Big Mayo’ Amid Policy Push” and called Hampton Creek a “tiny Silicon Valley startup” (actually San Francisco)
· The Los Angeles Times started its story with “Big Tobacco, Big Oil, now Big Mayo?”
· The UK’s Daily Mail’s coverage began “It is a classic David and Goliath Fight”
Even business-friendly television outlets favored Hampton Creek over Unilever, including Morning Joe and CNBC’s Closing Bell, where the lawsuit was mocked by a host noting how the Mayo Clinic does not have egg in it either, so maybe Unilever will go after them next. While CEO Josh Tetick was explaining his company’s mission, the program ran background footage of cute children spreading Just Mayo on sandwiches.
Several stories also went out of their way to beat up on Unilever for poor economic performance. For example, the international business paper, Financial Times explained how Unilever’s food division “experienced a fall in sales in the first six months of the year.” The Wall Street Journal painted a contrast of the success of Hampton Creek with the decline of Unilever:
In less than a year, Just Mayo has landed shelf space in major retailers such as Whole Foods Market and Wal-Mart Stores, responding to consumer demand for foods perceived as healthier with simpler ingredients and better for animal welfare and the environment. The company expects Just Mayo to be sold in 39,000 locations by start of next year.
This paragraph was immediately followed by:
Unilever’s food business, which accounts for about 27% of its revenue, has struggled in recent years as it has focused on higher-margin personal-care products that appeal in emerging markets. In the last two years, the company has sold underperforming food brands including Skippy peanut butter and Ragu pasta source. In its most recent quarter, food was the only one of Unilever’s four divisions to have slower sales growth.
Every story I saw also spoke glowingly of Hampton Creek’s financial backing and fast rise to success. Adding insult to injury for Unilever, almost every media outlet used pictures such as those above of the Just Mayo product or an image of the photogenic CEO Josh Tetrick alongside his Just Mayo brand, as did even the Wall Street Journal.
And this local San Francisco area TV news report shows lots of energetic activity at the startup’s facility. A story atBBC.com uses the subheads of “Horse and buggy definition” to describe FDA’s recipe for mayonnaise that Unilever relies on, and describes Hampton Creek’s response to the lawsuit: “Antiquated thinking won’t feed the world or strengthen the planet.” The article also shows this image from Hampton Creek’s website.
In more free advertising, Business Insider used this image for its story.
Further aiding Hampton Creek’s cause, many articles ended with a reference to the Change.org petition started by celebrity chef Andrew Zimmern, and several included the petition’s title, “Stop Bullying Sustainable Food Companies”. (The number of signatures now tops 24,000.)
A small company like Hampton Creek can’t pay for the positive press this lawsuit has generated. And according to their Twitter feed, they received 51,000 messages of support and most importantly, sales were higher than they’ve ever been. (Hampton Creek tweeted this picture of what looks like a Costco shelf showing Just Mayo almost sold out, right next to a full pallet of Best Foods mayonnaise.)
On my own blog post and on Twitter, several people responded by saying they had never heard of Just Mayo, but would now try it, some out of sheer spite. For example one said, “Because of a frivolous lawsuit I now have Just Mayo on my radar. Look forward to trying it.” And another, “Thanks Unilever. I had never heard of this Mayo, now I can’t wait to try it.”
Unilever compounded how much Hampton Creek owned the media by going radio silent. According to several news outlets and two reporters I spoke to, Unilever was non-responsive. See for example, the New York Times(“Unilever did not immediately respond Monday to requests for comment”), Forbes (“Officials at Unilever who were contacted by email did not respond to requests for comment”), and Fortune (“Unilever has not responded to requests for comment”).
On Monday, the Washington Post said “messages were not returned”, but then on Tuesday the paper added this emailed statement from a nameless and faceless Unilever spokesperson: “Our concern here is not about innovation, it is about misleading labelling. We simply wish to protect both consumers from being misled and also our brand.”
A pretty tepid response for the world’s second largest consumer packaged corporation. And it was too late.
The Washington Post also noted that “The suit comes at a touchy time for Unilever, which just launched an ad campaign promoting itself as devoted to sustainability.” Indeed, this week Unilever launched its “Project Sunlight”, which appears to be about child hunger, but I can’t tell what Unilever is doing about it except creating a nicewebsite and ad campaign touting its previous donations. Talk about bad timing. A Google news search for “Unilever” results in only eight articles about Project Sunlight, compared to 265 mostly unflattering articles about the Big Mayo lawsuit.
And on Unilever’s Facebook page, Project Sunlight’s warm and fuzzy posts about child hunger are getting drowned out by angry comments reacting to the lawsuit. One suggests a better use of resources:
Unilever is stifling innovation and competition by suing a small smart-up which has developed a more affordable, sustainable Mayo than Hellmann’s. If Unilever were truly committed to causes like ending child hunger, perhaps they would have redirected the costs of this lawsuit that way rather than in pursuit of this frivolous claim.
Numerous commenters say they will no longer buy Unilever products. Here is one example:
If this lawsuit story is indeed accurate, I will purge my entire household of any Unilever product, make it a priority to never buy anything made by Unilever again, and tell every single person I know why. Petty is a fitting word to describe such a lawsuit.
In another sign the right hand doesn’t know what the left hand is doing, Hampton Creek CEO Josh Tetrick shared an email with Fortune that he received from Unilever’s Global VP of marketing just days after the suit was filed. It read: “Love what you are doing…Very much in line with our Unilever Project Sunlight #brightfuture philosophy.”
Unilever’s future is not looking so bright right now.
How did this happen? How did a huge company that decided to go on the offensive and file a lawsuit get caught unprepared by the resulting media firestorm, while a startup being accused of alleged wrongdoing was happy to talk to the press, ran with it, and came out looking like a hero?
The first rule of public relations is get out in front of the story to control the message. Unilever didn’t even bother to try. Perhaps the legal department filed the lawsuit and figured it would stay quiet, or just never even thought to run it by communications. The company’s lawyers filed the case in New Jersey federal court on October 31. That’s when the press release should have gone out, to tell their story first. Instead, Unilever let their target, who they claim is in the wrong, garner all of the media sympathy. And when asked for comment, Unilever still couldn’t be found, and when they finally did respond, it was weak. That’s failing public relations in three different ways: not being proactive, the dreaded refusal to comment, and then offering an ineffective response.
Perhaps it’s a sign of a corporation so huge that the right people don’t even talk to each other anymore. That nobody at Unilever anticipated this media reaction is also a troubling sign of being out of touch. Unilever executives should take a hard look inward. Time will tell if the company is able to recover from this massive PR blunder. Meanwhile, Hampton Creek can enjoy the bump, courtesy of Unilever. Self-inflicted wounds hurt the most.