Government-backed egg lobby tried to crack food startup, emails show

A US government-appointed agricultural body tried to crush a Silicon Valley food startup after concluding the company represented a “major threat” and “crisis” for the $5.5bn-a-year egg industry, according to documents obtained by the Guardian.

In potential conflict with rules that govern how it can spend its funds, the American Egg Board (AEB) lobbied for a concerted attack on Hampton Creek, a food company that has created a low-cost plant-based egg replacement and the maker of Just Mayo, a mayonnaise alternative.

In a series of emails obtained under the Freedom of Information Act (Foia), AEB staff, a US department of agriculture official and egg industry executives attempted to orchestrate the attack.

The documents were obtained by Ryan Shapiro, a Foia expert at the Massachusetts Institute of Technology, and Shapiro’s Washington DC-based Foia-specialist attorney, Jeffrey Light, and passed to Hampton Creek.

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Among the efforts coordinated between the AEB, the USDA and the egg industry:

• 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.

The emails, totalling 600 pages, show the AEB has become deeply concerned about Hampton Creek. The San Francisco-based tech company has attracted $120m in funding from some of tech’s biggest names, including the Founders Fund, started by Facebook backer Peter Thiel, and Vinod Khosla’s Khosla Ventures.

The AEB represents egg farmers across the US and its board is selected by the secretary of agriculture. This year the politically connected AEB provided 14,000 eggs for the White House’s annual Easter egg roll and Ivy was photographed with President Barack Obama.

Hampton Creek has recently signed a deal with Compass, the world’s largest catering company, and is pursuing contracts with other fast-food and food supply companies that have traditionally been held by the egg industry.

“Missy, I am getting a lot of emails about this product from egg producers,” Ivy wrote in an email to Missy Maher, an executive at the Edelman public relations company, in August 2013. She said it “would be a good idea if Edelman looked at this product as a crisis and major threat to the future of the egg product business”.

Posted in: Politic