Yogurt company founders meet with Loblaw after YouTube video goes viral
Linda Nguyen , The Canadian Press
Published Friday, December 14, 2012 11:13AM EST
Last Updated Friday, December 14, 2012 6:49PM EST
TORONTO -- The owners of an Ontario frozen yogurt company embroiled in a $20-million lawsuit with Loblaw Companies Ltd., met with the head of the grocery giant Friday, just days after an impassioned video about their business dealings went viral.
Amanda House, who claims Loblaw backed out of an offer to sell her products, said no settlement offers came out of the hour-long meeting with Loblaw executive chairman Galen Weston Jr. But she was hopeful that communication will remain open between her company YoPRO Treats Inc. and the supermarket chain.
"It was a step in the right direction," said 35-year-old House, who attended the meeting at Loblaw (TSX:L) headquarters in Brampton, Ont. with company co-founder and fiance Chris Delaney and their lawyer.
"It was just basically open communication and explaining to Galen what had happened. It was good to be able to express our side of it."
The meeting was arranged after Loblaw became aware of a video the Burlington, Ont., kinesiologist and personal trainer uploaded earlier this week to YouTube. In the nearly four-minute video, House makes an impassioned plea directly to Weston for help.
She alleges that Loblaw, on two occasions, promised to sell the couple's low-fat, high-protein frozen yogurt product at their stores in Ontario and Quebec but then unexpectedly reneged on their offers.
House says their products were not placed in freezers at hundreds of stores as promised, but a small order was made for a handful of stores with little marketing and signage.
The couple says at the end of Friday's meeting, Weston said he would try to get back to them next week.
"He listened, and he's going to investigate it further," said House. "That's all he can do at this time."
In March 2010, the couple launched a lawsuit against Loblaw for $10 million, alleging that the grocer breached its contract when it took the YoPRO bars off its shelves.
Then in August, the lawsuit was amended to seek out a total of $20 million in damages, after the couple claimed that the supermarket launched its own product modelled after theirs.
House claims the YoPRO owners and their families have lost $1 million in their dealings with Loblaw and have been left in financial ruin.
None of the allegations have been proven in court.
In a statement Friday, Loblaw acknowledged that "mistakes were made" but that ultimately YoPRO was discontinued after a year at hundreds of stores in Ontario and Quebec due to a lack of sales.
"Unfortunately for both parties, the product simply didn't sell well," said the company.
It also refuted claims that their PC brand Greek yogurt bar products are similar to YoPRO.
Loblaw says it has been manufacturing a similar yogurt since the 1990s and the recipe it now uses for its bars was inspired by a House and Home magazine article from 2010.
"Loblaw Companies remains committed to operating at the highest ethical standards and believes it has acted appropriately in this circumstance," said Loblaw.
"Having said all of that we remain hopeful that this matter can be resolved without going to court."
Company spokeswoman Julija Hunter says Loblaw contacted the YoPRO founders on Dec. 11 with a settlement offer but did not hear back.
"We have been at the table, ready to mediate," she said.
House says the legal saga has not only hurt the couple's finances, but it has impacted her fiance's health.
She was on her way to a scheduled meeting with Loblaw when Delaney, who is blind, collapsed and had to be taken to the hospital.
She never would've thought that the video she shot would've gained so much publicity.
After all, it was the first time she had ever posted anything on YouTube.
"It was a very big decision (to do the video)," she said. "I couldn't have imagined it would've ended up like that, with people sharing it as much as they have. I couldn't have imagined that it would've gotten that big."
But social media consultant Mark Evans says it was a no-brainer that House's video got so much traction.
"The story is so good and so compelling," said Evans, who runs the Toronto-based firm, ME Consulting. "It's a classic David vs. Goliath kind of situation."
He says Loblaw had little choice but to respond publicly, and quickly.
"Loblaw got backed into a corner, where they felt they didn't have a choice but they had to do something because the court of public opinion was rapidly going against them," said Evans.
"The last thing people like in a very competitive marketplace is to see a big company behave badly when it comes to a small business."