Report Says Vegan Mayo Giant Bought Up Its Own Products to Boost Sales

Hampton Creek says the program that sent contractors to stores like Kroger, Costco, Walmart, Target, and Whole Foods to buy Just Mayo was first and foremost a quality control effort.
August 8, 2016, 7:00pm
Photo via Flickr user Dutch Boyd

Mayonnaise isn't exactly the wildest of condiments, but the world of mayonnaise manufacturing has become something of a Wild West.

In keeping things behind the scenes of our nation's ubiquitous spread interesting, the mayonnaise hit the fan this week when Bloomberg published a report that says the vegan mayonnaise producer Hampton Creek has been employing contractors to buy up its Just Mayo product from stores to make it seem more popular.

Hampton Creek says the program that sent contractors to stores like Kroger, Costco, Walmart, Target, and Whole Foods to buy Just Mayo was first and foremost a quality control effort. The company says it was looking out for things like broken jars, askew or wrinkled labels, and ingredient separation issues that could occur from extreme temperature fluctuation while in a truck. The program cost $77,000, or about a tenth of 1 percent of its sales.

"If we spent $77,000 on it, we spent more in snacks this year than we did on the program," Hampton Creek CEO Joshua Tetrick said in an interview with CNBC. He added, however, that the company "wanted to see right in the beginning if there was any way to get any lift."

"Getting our first launch right, especially for a young company, isn't optional," Tetrick wrote in a statement provided to MUNCHIES, adding that there were problems with viscosity, labeling, and more. "After launching, and despite our previous testing, we were pissed to see these problems." He said the company then assembled a team to go buy the product from stores to study quality.

READ MORE: The FDA Says Vegan Mayo Is Not Mayo

But Bloomberg reports that the $77,000 cost of the program doesn't account for hundreds of purchases of its own products made by the company and its contractors, according to testimony from two former senior employees and five former contractors as well as receipts and e-mail correspondence.

Bloomberg says that the contractors, known as Creekers, were instructed to clear out entire shelves of product, and sometimes what they bought was simply chucked in the trash. The purchases were separate from the quality assurance program, Bloomberg says. In e-mails obtained by Bloomberg, Hampton Creek employees instructed Creekers on how they should carry out what amounted to a clandestine operation, suggesting that they use the self checkout lane to avoid awkward questions about how much mayo they were buying (been there) and to avoid wearing clothes bearing the Hampton Creek logo. Some contractors were even told to call grocers to request Just Mayo and were provided scripts to follow that had them pretending to be parents organizing back-to-school events or caterers.

It's unclear exactly how much mayo we're talking here, and Bloomberg referred to the numbers of purchases as in the "hundreds." While $77,000 could buy a hell of a lot of mayo, it's probably not enough to make or break a company that has, to date, raised more than $100 million in investment capital from Silicon Valley bigwigs like Bill Gates and Peter Thiel, who, like many others, see the food tech company as visionary. Bloomberg noted, though, that the operation was initiated before a large $90 million funding round had ended.

READ MORE: Hellmann's Couldn't Beat Vegan Mayo, So They Started Making Their Own

It's not the first controversy surrounding the plant-based food startup, but in the past, Hampton Creek has been on the receiving end of some foul play. After the company rolled out Just Mayo in 2013, the egg industry played dirty in its efforts to nip the vegan mayo in the bud, with organizations operating under the auspices of the US government—namely the American Egg Board and the FDA—going after Just Mayo. Hampton Creek received a letter from the FDA saying that they couldn't call their product "mayo" because it didn't contain eggs, and the American Egg Board ran a campaign called "Beyond Eggs" that targeted bloggers and chefs in the hopes they would promote eggs in light of the new eggless mayo darling. The fiasco led to the resignation of a senior Egg Board member as well as proposed legislation that would put limits on the actions of government-sponsored agricultural groups.

So mayonnaise, of all things, somehow continues to bring the drama, and it didn't even require any Sriracha to make it interesting. Stay tuned for what happens next in the exciting world of sandwich spreads.