Another plot twist in the saga of Hampton Creek, the startup behind eggless mayonnaise Just Mayo. Hampton Creek defeated rivals in the egg industry who attempted to hamper the company with a shadowy smear campaign. Now, it appears the company may have been inflating sales at the same time. During a 2014 round of funding, Hampton Creek directed "undercover" employees to purchase a great amount the product at grocery stores across the country, according to Bloomberg.
Hampton Creek denied any wrongdoing, telling Bloomberg the buyback was all part of quality control checks outside the manufacturing facility. But, anonymous former employees alleged the operation went further than that, claiming the company was trying to create some buzz around Just Mayo and make the company more attractive to venture capitalists.
The buyback reportedly took place from March 2014 to January 2015. While Bloomberg uncovered quality control surveys related to some of the purchases, many more were not accounted for. Hampton Creek also instructed employees to call stores such as Whole Foods, act as if they were regular customers, and place large orders for Just Mayo, seemingly in an attempt to get the product on shelves.
Beginning in August 2013, the American Egg Board, which is funded by the egg industry but run by the United States Department of Agriculture, began working grocery chains and the Food and Drug Administration in an attempt to take down Hampton Creek and its eggless mayo. In emails uncovered by the company through the Freedom of Information Act, it was revealed the egg board tried to convince Whole Foods to stop stocking the product. It lobbied the FDA to force Hampton Creek to drop the "Just Mayo" name, on the grounds that without eggs, a product could not be marketed as mayonnaise.
The FDA sent Hampton Creek a warning letter, but eventually relented. American Egg Board chief executive officer Joanne Ivy resigned in October 2015. The egg board's campaign went on for two years, covering the same timeline when Hampton Creek was using questionable tactics of its own.
Sources told Bloomberg Hampton Creek executives were intentionally trying to raise the company's profile in the eyes of those who might want a piece of the action, but founder Josh Tetrick told the publication that isn't the case: "We always comply with our disclosure obligations to prospective investors."
• Food Startup Ran Undercover Project to Buy Up Its Own Products [Bloomberg]
• American Egg Board CEO Retires Early Amidst Vegan Mayo Controversy [E]