A little Egg (-less) on his face...

Sometimes Monday mornings are a drag.

After a nice weekend, you make your way into the office – and if, like me, you don’t read your business email on Saturday or Sunday; you have to sort thru the in-box as a rite of passage for the week ahead. (OK, sometimes I cheat on Saturday…)

Yesterday morning, in the pile of industry updates, was something that made me smile. Now, I don’t normally derive any joy from the travails of others, but once in a while – I’ll admit to a smirk over the downfall of someone who has held themselves (and others…) to a supposedly higher standard.

Of course, I’m speaking of Josh Tetrick of Hampton Creek foods. The Egg-less Mayo King. Young, bright – started a food company with BIG backers – made a dent in the category (more on that later…), got sued by Unilever –one of the big guys – over the use of the word ‘Mayo’ – got publicity and became a darling of the ‘new food’ set thru a series of full page letter/ads in the New York Times, identifying all the supposed ‘wrongs’ in our food industry and in the full bloom of self-righteousness, even “forgiving” his Mother for all the crap food she served him as a youth.

Well, as of this week, young Josh is pretty much seeing things from the top of his own petard and I’ll bet it doesn’t feel very nice…

This story broke small a while ago. Seems some ex-Hampton Creek employees (disgruntled, I think Josh’s spokesperson claimed…) mentioned that they had routinely been sent out with wads of company cash to go to retailers (most in the Bay Area…) and purchase (or is that re-purchase?) cases of Egg-less Mayo – which naturally drove the ‘sales stat’s’ skyward. (Although, if anyone with any knowledge of Category movement would have looked at the ‘velocity’ of sell-thru, it would sort of ---stink…).

Once this was out, Josh and crew came up with a great explanation –they routinely bought product at-shelf to insure product quality. What, the consumer wasn’t good enough? You couldn’t count your ‘reclaims’ and figure that out? Well, Okay. However, the numbers didn’t add up –even close. Giving credit where it is due, a lot of this research came from Bloomberg and the story that caught my eye was from the folks at the Silicon Valley Business Journal and you can get the sordid details here: “Hampton Creek’s cover mayo buyback bigger than previously thought”

Now, most of the time, the headline, the grabber, can be a bit of an exaggeration; however, these guys actually downplay it –seems in one financial report covering 5 months in 2014, Hampton Creek re-purchased almost as much product as it sold!!! If you take standard industry mark-ups, they paid out TWICE the amount of their revenue during the same period. Wow, that’s bad financials in the Amazon-range and certainly not the kind of numbers the investors I know would be happy with. Well, it’s tough being a poster-child these days…

Those of us, of a certain age –meaning you actually watched the Beatles on Ed Sullivan, not just watched Eight Days A Week – might remember a similar marketing ploy in the record industry. (Yes, it was an industry…) The two cornerstones to creating a “Hit Record” in the 50’s was to:

 A. Pay Disc Jockeys to play the record over and over and 

 B. Hire kids to go out the record stores that were giving data to Billboard magazine and buy all the copies in the store! “#5 this week with a bullet!!”

Worked a charm until the Feds figured it out –kind of like Hampton Creek. This whole affair also upsets me because Josh was one of the leaders –or at least I thought – of the “Mission-based” business school. Having more than just the $$$ as part of your reason for building the brand. One of Hampton’s big catch words is “Just” – not as in ‘simple’ although that applied to ingredients, etc. –but ‘Just’ as in ‘fair’ – how do his investors, employees and consumers feel about that now? As Joni Mitchell wrote; “Is Justice – just - ice?” And the hubris doesn’t stop there, friends. Besides lecturing everyone from Obama to his very own Mama, Josh’s products made seemingly glowing pro-ecology statements about their use.

For instance, “Buy this jar of (non) Mayo and save 80 gallons of water!” Really. Well, this and other claims came under some scrutiny and so Hampton Creek hired an independent firm to calculate these claims. They’re called “Lux Research” and guess what –they couldn’t come up with the numbers –so at least Hampton Creek quietly dropped them from their advertising and website. 

In the end, there’s hopefully a lesson: there is being ‘right’ and then there is being ‘righteous’ – the latter is dangerous territory and I’m afraid Josh Tetrick ‘just’ overstepped his ‘standards’.