Despite clearance from the Food and Drug Administration earlier this month, Target has decided to terminate its relationship with beleaguered food startup Hampton Creek.
Target pulled all 20 Hampton Creek products from its shelves two months ago, including its original “Just Mayo” eggless mayonnaise spread, and held an internal review of the startup after it was notified of “specific and serious food safety allegations about Hampton Creek products.”
The move is a blow to Hampton Creek’s business, which has reportedly been struggling to raise funding. On top of the Target issue, the company has dealt with a legal dispute this summer over a trademark involving actor Jaden Smith’s water bottle company and the loss of every member of its board, except the CEO. Last year, Hampton Creek also had to contend with a government investigation into a buyback scheme, which has since been dropped.
Target was presumably one of the more lucrative retailers offering Hampton Creek’s products, bringing in an estimated $5.5 million per year for the company. Hampton Creek maintains retail sales represent less than 50 percent of its overall business and that the business from Target was a fraction of retail sales.
Hampton Creek fought back against safety concerns at the time of the accusations and has since maintained the matter was closed. The startup was hopeful the relationship with Target could return to normal after the FDA approved of the safety and labeling of all of its products this month.
But it seems things did not look so great from Target’s viewpoint. The retailer announced today it would be ending the relationship over multiple concerns.
“Recently, the FDA closed its file on Hampton Creek products,” Target stated in an email to TechCrunch. “Although the FDA is not pursuing this further, we used the opportunity to review our portfolio, as we regularly do, and decided to reconsider our relationship with Hampton Creek. We are not planning to bring Hampton Creek products back to Target and have openly communicated our decision with the Hampton Creek team.”
The decision to permanently end the relationship may have stemmed from the way Hampton Creek went about announcing publicly and to the media it had been cleared. According to Bloomberg, which first reported the news, spokesperson for the startup Andrew Noyes said, “Target informed us that sharing with the public the FDA’s conclusion that our products are safe violated Target’s vendor communication guidelines.”
However, Hampton Creek is taken back by Target’s decision to end the relationship simply based on the startup’s actions following the FDA clearance.
“We understandably felt there was a necessity to share the FDA’s conclusions, so we did,” a statement Hampton Creek sent to TechCrunch reads. “Target publicly said they would leave this in the hands of the FDA. Target informed us that sharing with the public the FDA’s conclusion that our products are safe violated Target’s vendor communication guidelines. Target told us that is what drove their decision to end our relationship.”
When asked, Target did not dispute Hampton Creek’s account but did cite “multiple reasons” for ending the relationship.