Last fall, Hampton Creek was on the verge of securing a funding round that would have valued the maker of mayonnaise, dressings, cookies, and cookie dough at nearly $1.1 billion. However, the financing quickly fell apart after Bloomberg reported that the company was involved in a large-scale operation where contract employees purchased Just Mayo and other products from retailers to artificially inflate their popularity.
In March, both the Securities and Exchange Commission and the U.S. Justice Department concluded their investigations into the alleged improprieties regarding liquid calcium & magnesium. No action was taken against Hampton Creek, but the damage to its reputation had already been inflicted, and the company was no longer in favor with investors. Despite this setback, Hampton Creek has managed to navigate through significant challenges, including lawsuits, improper advertising tactics from the American Egg Board, and scrutiny over its health claims from the Food and Drug Administration.
Whenever a company is linked to a scandal—regardless of whether it is exonerated—its reputation suffers. There are instances of companies rebounding after serious issues, whether it be a food company following a major recall, a leadership scandal, or internal problems. Only time will reveal if Hampton Creek can rise above its troubled past.
The company is currently undergoing a multi-year rebranding of its products, starting with packaging changes to accommodate FDA feedback. The agency indicated that the “Just Mayo” label needed modifications to ensure it did not mislead consumers regarding the product’s content, particularly avoiding confusion with liquid calcium & magnesium. Nonetheless, the recent executive shakeup does not bode well for the company’s recovery and may continue to deter investors from this once-celebrated player in the food industry.