Report: Hampton Creek Exaggerated Environmental Impact, Faked Sales

Vegan food company Hampton Creek has survived a lot of controversy in the short time it’s been around, from the egg industry plotting to put it out of business to a dispute with a competitor and the FDA over the meaning of the word “mayo” to allegations that the company sent shoppers to buy up its inventory and inflate sales numbers. Now there’s a new accusation: that the company promoted inaccurate claims about sustainability.

These accusations, and accounts of misleading investors and others who really believed in the company, appear in the cover story of Bloomberg Businessweek this week. Check out the whole story for an animation where you can wipe virtual mayo off CEO Josh Tetrick’s face with a virtual napkin, and personal accounts of being charmed and then disillusioned from investors, former employees, and brand ambassadors alike.

The argument that plant-based products use fewer natural and agricultural resources than animal products and meat is scientifically sound, but the numbers that Hampton Creek promoted were very high.

It said, for example, that a jar of Just Mayo used 80 gallons less water to make its ingredients than standard egg-based mayonnaise. When this and other stats that the company had promoted turned out to be exaggerated, it quietly removed them from the website.

Was the buyback program just a quality control measure that cost only $77,000 total, or a sales-inflating scheme that cost the company millions? Bloomberg Businessweek claims to have seen a statement showing that the company spent more on buybacks in July 2014 ($510,000) than it took in in sales ($472,000).

A former member of the “Creekers,” the brand’s paid ambassadors who were eventually asked to purchase Just Mayo from stores, sent along an e-mail from when the buybacks started. The company even provided a backstory in case store employees asked what they were up to.

“You are working for a catering service, which chooses Just Mayo because of its amazing taste and because it is really good for people with allergies,” the e-mail explained. Provided backstories like this are common in mystery shopping, but being told to buy a dozen bottles of mayo from every store in your area is not.

This Creeker eventually spent $12,000 on the product (which was reimbursed, of course) and says that her friends and even local food banks wouldn’t take any more bottles. Another former Creeker recounts leaving boxes of mayo on the street, not knowing where else to take it.

How Hampton Creek Sold Silicon Valley on a Fake-Mayo Miracle [Bloomberg Businessweek]