UN Unilever NV

By Annie Gasparro 

The maker of Just Mayo, a vegan alternative to traditional mayonnaise, will keep the name but change its label after settling a dispute with federal regulators that highlighted the confusion being stirred up by fast-changing consumer food preferences.

The agreement between Hampton Creek Inc. and the Food and Drug Administration wraps up a labeling saga that began over a year ago, when industry giant Unilever PLC, which makes Hellmann's mayonnaise, filed a lawsuit against Hampton Creek for false advertising.

Unilever argued Just Mayo shouldn't use the abbreviation for mayonnaise since its product doesn't contain eggs, which FDA rules state must be an ingredient for a spread to be called mayonnaise.

Unilever, under pressure from an online petition backing Just Mayo, dropped the lawsuit last December. But the FDA in August followed up with a letter to Hampton Creek warning that use of "mayo" in the product's name, along with the image of an egg in Just Mayo's logo, could mislead consumers "to believe that the products are the standardized food, mayonnaise."

Hampton Creek, a California startup founded in 2011 with prominent investors including Bill Gates, has argued that its product is healthier and better for the environment. While Just Mayo is egg-free, Hampton Creek Chief Executive Josh Tetrick also emphasized that it doesn't use the term "mayonnaise," only "mayo."

"We have to be able to convey what our product is to consumers and connect it back to the food they know, and we can't do that without the 'Mayo' name," Mr. Tetrick said in an interview Thursday.

On Just Mayo's new label, unveiled Thursday, its logo--an egg beyond the silhouette of a pea shoot symbolizing its plant-based ingredients--remains but appears smaller. The words "egg-free" are larger. It also adds "Spread & Dressing."

The FDA believes Hampton Creek "committed to making labeling changes to ensure its products are labeled in a manner that is truthful and not misleading," an FDA representative said in a statement. "Therefore, the FDA considers the issues cited in the warning letter to be resolved."

Smaller food makers like Hampton Creek are adding pressure to the large, established players in the food industry, such as Unilever and General Mills Inc. U.S. consumers are increasingly looking for local, simpler and more transparent brands and are inherently distrustful of behemoth companies.

While the agreement with the FDA represents a qualified win for Hampton Creek, which also makes eggless cookie dough and other products, the company still could face other hurdles, as the egg industry pushes back, too.

Write to Annie Gasparro at annie.gasparro@wsj.com

(END) Dow Jones Newswires

December 17, 2015 18:31 ET (23:31 GMT)

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