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Watergate, Dieselgate, Mayogate? Undercover mayonnaise execs caught propping up product

A scandal is stirring up over Hampton Creek’s vegan-recipe mayonnaise substitute Just Mayo — and this one won’t wash clean so easily.

Eight months or more prior to a $90 million funding round backed largely by Silicon Valley investors, Hampton Creek launched an undercover campaign to boost demand artificially. Employees and contractors purchased massive quantities of Just Mayo at grocery stores across the U.S., according to Bloomberg, making it appear as though Americans were really taking to the bread spread.

Hampton Creek is backed by high-profile Silicon Valley investors Khosla Ventures, Founders Fund, and Yahoo co-founder Jerry Yang, along with Hong Kong tycoon Li Ka-shing, Bloomberg reports.

In addition to buying multiple jars of Just Mayo, workers were instructed to call grocery store managers to ask about the product. Participants in the buyback program were reimbursed for their Just Mayo purchases, which currently sells at Walmart for $3.48 for 30 ounces and at Whole Foods for $5.99 for 16 ounces, according to Silicon Beat. Hampton Creek CEO Joshua Tetrick told Bloomberg the program’s roughly $77,000 cost represented less than 0.12 percent of total sales.

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Hampton Creek says product buying was a quality control program to check on the effects of shipping. The company produced emails to contractors given quality control assignments and completed quality control survey results. The surveys accounted for some — but by no means all — of the product purchases. And former employees and contractors related instructions that had nothing to do with quality control: One contractor said it was told it could keep or just throw out the products it purchased.  

In an April 2014 email to contractors, former Hampton Creek director of corporate partnership Caroline Love wrote, “We need you in Safeway buying Just Mayo and our new flavored mayos. And we’re going to pay you for this exciting new project! Below is the list of stores that have been assigned to you.”

“The most important next step with Safeway is huge sales out of the gate,” Love continued. “This will ensure we stay on the shelf to put an end to Hellmann’s factory-farmed egg mayo, and spread the word to customers that Just Mayo is their new preferred brand. :)”

Bloomberg saw expense reports for Just Mayo purchased from Safeway stores, but former workers said they bought product across the U.S. at Kroger, Costco, Walmart, Target, and Whole Foods stores. A November 2014 email said the buyouts would be stopped, but three former contractors said the program continued into 2015 and that they were given instructions verbally.

Hampton Creek is trying to raise additional investment funding to expand its product line to possibly 560 vegan products. Bloomberg reported people familiar with the funding effort said the company is seeking investors in Asia.