The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have reportedly ended their investigations into Hampton Creek's alleged sales-inflation buyback operation, in which employees purchased jars of the company's Just Mayo product then sold the jars back to the company. Bloomberg initially reported that the company had expensed $1.4 million for "Inventory Consumed for Samples and Internal Testing” while reporting $1.9 million in sales during the same period, but a forensic consulting team with an accounting firm commissioned by Hampton Creek apparently found that the company spent less than half of one percent of sales on the buyback program. Additional information on the Bloomberg report appears in Issue 613 of this Update. See Fortune, March 24, 2017. Issue 629
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The U.S. Department of Agriculture’s (USDA’s) Agricultural Marketing Service (AMS) has completed a report reviewing nine allegations of misconduct asserted by Josh Tetrick, head of Just Mayo producer Hampton Creek, against the American Egg Board (AEB). The report concludes that AEB staff and board members engaged in inappropriate conduct, including failing to adhere to USDA guidelines, targeting a specific company and sending inappropriate emails. The report found substantiation for five of Tetrick’s nine allegations: (i) AEB employees exchanged inappropriate emails about Tetrick, including references such as, “Can we pool our money and put a hit on him?” and “old buddies from Brooklyn pay him a visit”; (ii) an AEB executive accepted a consultant’s offer to contact Whole Foods Market Inc. in an effort to persuade the company to stop stocking Just Mayo, although the consultant never actually contacted the company; (iii) a public relations expert conducted market research on egg-replacement products,…
Hampton Creek founder Josh Tetrick reportedly directed his employees to purchase Just Mayo, an eggless mayonnaise, at grocery stores while it pursued funding from investors, according to a Bloomberg report. Five former workers provided Bloomberg with receipts, expense reports, cash advances and emails telling employees, “We need you in Safeway buying Just Mayo and our new flavored mayos . . . And we’re going to pay you for this exciting new project! Below is a list of stores that have been assigned to you.” Tetrick told Bloomberg that the purchases were part of a quality-control program to assess Just Mayo from a customer’s perspective, but the survey database of that program did not account for hundreds of purchases, the report indicates. Additional emails also suggest the “Buyouts” project’s purpose was related to sales inflation, including one message that said, “The most important next step with Safeway is huge sales out…
The U.S. Food and Drug Administration (FDA) has reportedly reached a deal with Hampton Creek, maker of eggless spread Just Mayo®, allowing the company to keep the name of its product but requiring changes to its packaging. Just Mayo® labels will now feature larger words touting its features, including "egg-free" and "spread and dressing," and a definition of "just" as "guided by reason, justice, and fairness." The product has been the target of litigation in recent years, including a lawsuit by competitor Unilever and a putative class action, because of the alleged misrepresentation of the product as mayonnaise despite its noncompliance with FDA’s standard of identity for mayo, which requires the inclusion of eggs. Hampton Creek was also allegedly the target of a smear campaign by the American Egg Board. Additional details appear in Issue 578 of this Update. Issue 588
The U.S. Department of Agriculture’s (USDA’s) Agricultural Marketing Service (AMS) has reportedly launched an investigation into the American Egg Board (AEB) following the release of emails that allegedly revealed a concerted campaign against Hampton Creek, the manufacturer of an egg-free mayonnaise-like spread called Just Mayo. According to The Guardian, the announcement comes after calls for a congressional investigation by Hampton Creek CEO Josh Tetrick and others. “Recent news reports have brought to light a series of emails, obtained under the Freedom of Information Act, that contain compelling evidence that [American Egg Board] leadership, including the Egg Board’s President and CEO, may have violated the federal laws and administrative regulations governing checkoff programs,” stated U.S. Sen. Mike Lee (R-Utah) in an October 20 letter to USDA Secretary Tom Vilsack about the emails. Additional details about the AEB emails and litigation against Hampton Creek appear in Issues 578 and 549 of this…
Weeks after the U.S. Food and Drug Administration (FDA) sent Hampton Creek Foods a letter warning that its Just Mayo is misbranded because it does not contain eggs, emails obtained through the Freedom of Information Act reportedly indicate that the American Egg Board (AEB) and a public relations firm made a concerted effort to remove Just Mayo from the market. The emails reportedly detail the actions the group undertook, including a complaint to FDA, an attempt to convince Whole Foods to stop selling Just Mayo, aid to Unilever in its litigation against Hampton Creek, and payments to food bloggers who post about how “real and sustainable foods, like eggs,” fit into their lifestyles. Details about Unilever’s lawsuit against Hampton Creek appear in Issue 549 of this Update. Public health attorney Michele Simon posted the emails on her blog, alleging that AEB likely broke laws during its attempt to quash Hampton…
A Florida consumer has filed a proposed class action against Hampton Creek, maker of vegan spread “Just Mayo,” in Florida state court alleging that the product is falsely labeled and advertised because it does not contain eggs. Davis v. Hampton Creek Inc., No. 2015-5993-CA (Fla. 11th Jud. Cir. Ct., filed March 13, 2015). The complaint cites definitions of “just” and “mayo” to argue that the product name fools reasonable consumers into believing that it is mayonnaise despite containing no eggs. The plaintiff further points to the label, which includes an egg-shaped outline, and to the website, which previously advertised the product as “an outrageously delicious mayonnaise that’s better for your body, for your wallet, and for the planet.” She alleges a violation of Florida’s consumer-protection statute and unjust enrichment and seeks class certification, damages, restitution, an injunction, and attorney’s fees. Unilever, producer of Hellmann’s mayonnaise, challenged Hampton Creek’s “Just Mayo”…
Hellmann’s producer Unilever has filed a notice of voluntary dismissal in a case alleging that Hampton Creek’s plant-based mayonnaise substitute, “Just Mayo,” could not call itself mayo because it contains no eggs as required by U.S. Food and Drug Administration standards for the product. Conopco Inc. v. Hampton Creek Inc., No. 14-6856 (D.N.J., notice filed December 18, 2014). Unilever filed the complaint in October 2014, arguing that Just Mayo is a misleading brand name because the substance behaves differently than real mayonnaise when used in recipes; the plant-based product can apparently separate into parts rather than binding ingredients together. “Unilever has decided to withdraw its lawsuit against Hampton Creek so that Hampton Creek can address its label directly with industry groups and appropriate regulatory authorities,” said Mike Faherty, Vice President for Foods, Unilever North America, in a statement. “We applaud Hampton Creek’s commitment to innovation and its inspired corporate purpose. We…
