Industry associations often make poor incubators, and will promote an industry to the point where it curtails development. The American Egg Board (AEB), for example, managed to kill a Silicon Valley food startup, Hampton Creek, which specialized in the production of vegan egg substitutes and a mayonnaise substitute by attracting bloggers, the mass media and popular chefs. The marketing board claimed the company posed a ‘significant’ threat to the $5.5 bn-a-year egg market.
AEB Head Joanne Ivy declared that Hampton Creek represented a “crisis and a major threat to the future”, alerting the whole US egg industry. Afterwards a slew of measures were taken to tackle the ‘problem’.
According to the Guardian, the lobbyist’s aim was to confront the startup by promoting AEB-sponsored content through Google ads, paying kickbacks of $2,500 each to food bloggers to promote their agenda, targeting publications, and bribing animal rights and autism activists.
The ‘beyond eggs’ campaign, so-called after Hampton Creek’s original name, appears to represent a disturbing trend in state-funded corporate bullying.
Hampton Creek founder Josh Tetrick urged the USDA to look into the food lobby, and follow thousands of those who consider the agricultural department itself as having “deceptive endorsements”.
“This is a product that has been around for a very long time,” Tetrick said. “They are not used to competition and they don’t know how to deal with it.”
The AEB is believed to have hired the world’s largest public relations company, Edelman, to launch the attack as internal communications reportedly included a section called “Beyond Eggs Consumer Research”.
The AEB and USDA heads have both denied these allegations. An agriculture department official said that it “does not condone any efforts to limit competing products in commerce”.
Some 600 pages of messages detailing AEB plans to ruin the food startup were unveiled by Freedom of Information Act (FOIA) expert Ryan Shapiro, and FOIA specialist attorney Jeffrey Light.
The emails proclaimed that egg producers sent their concerns over the rise of Hampton Creek to Ivy, who decided to use media coverage hailing AEB activities.
“While egg replacers have been around for many years, we recognize that the interest in this category has increased recently,” she said. “[I]n response, we bolstered our efforts to increase the demand for eggs and egg products through research, education and promotional activities,” she wrote in a September 2013 email.
On Thursday Tetrick called for authorities to launch an investigation into the case, claiming that the USDA should put the AEB’s actions under scrutiny.
“They have gone way beyond what they are allowed to do,” Tetrick said of the egg lobbying group.
