In late 2014, fledgling entrepreneur Josh Tetrick persuaded investors to plow $90 million into his vegan food startup Hampton Creek Inc. Tetrick had impressed leading Silicon Valley venture capital firms by getting his eggless Just Mayo product into Walmart, Kroger, Safeway, and other top U.S. supermarkets within about three years of starting his company.
What Tetrick and his team neglected to mention is that the startup undertook a large-scale operation to buy back its own mayo, which made the product appear more popular than it really was. At least eight months before the funding round closed, Hampton Creek executives quietly launched a campaign to purchase mass quantities of Just Mayo from stores, according to five former workers and more than 250 receipts, expense reports, cash advances and e-mails reviewed by Bloomberg. In addition to buying up hundreds of jars of the product across the U.S., contractors were told to call store managers pretending they were customers and ask about Just Mayo. Strong demand for a product typically prompts retailers to order more and stock it in additional stores.
We need you in Safeway buying Just Mayo and our new flavored mayos, Caroline Love, Hampton Creeks then director of corporate partnership, wrote in an April 2014 e-mail to contract workers known as Creekers. And were going to pay you for this exciting new project! Below is the list of stores that have been assigned to you. Loves memo also referenced a key competitor: The most important next step with Safeway is huge sales out of the gate. This will ensure we stay on the shelf to put an end to Hellmanns factory-farmed egg mayo, and spread the word to customers that Just Mayo is their new preferred brand.
http://www.bloomberg.com/news/artic...undercover-project-to-buy-up-its-own-products