Business Strategies

Josh Tetrick: Hero or Hustler?

Josh Tetrick garnered outsized attention and favorable reviews for his start-up food company Hampton Creek Foods. Then a few detours on the road to healthier eating went up.

By Kevin T. Higgins, Managing Editor

josh tetrick egg on face

Thumbing your nose at mainstream food companies is overtaking baseball as America’s favorite pastime, and this past summer, nobody had a bigger thumb than Josh Tetrick.

The 35-year-old founder and CEO of Hampton Creek presided over an unorthodox and – even by better-for-you food company standards – unprecedented ad campaign that lambasted “our outdated food system” and “a world of crappy food” in a series of full-page advertisements in the Sunday editions of the New York Times.

The white-on-black ads, which began June 21 and went into hiatus after the Aug. 9 edition, featured open letters with a salutation directed at different groups, including food industry leaders, presidential candidates, millennials and “Dear Mom.”

In the free-from and better-for-you world of food marketing, print advertising is done sparingly, if at all, and the Hampton series clocks in around $1 million. (It resumed Aug. 30 with a letter beginning, “Dear President Obama.”) Each ad was up front in the newspaper’s main section, just one or two right-hand pages behind Tiffany & Co.

BBC and Tetrick

Tetrick’s ads didn’t mention his products: at this point only Just Mayo, Just Cookies and Just Cookie Dough. All are vegan, each having found a substitute for eggs (in the case of Just Mayo, Canadian yellow pea protein).

Coincidentally, also in August, Tetrick received a warning letter from the FDA regarding Just Mayo and labeling issues, in particular its deviation from the standard of identity for mayonnaise. However that complaint plays out, the tone of the Times ads is nothing if not provocative – not in the same league as Martin Luther’s Ninety-Five Theses nailed to the door of All Saints Church, but the closest thing to a manifesto for healthful packaged foods.

Big Food is taken to task, although it can be redeemed by helping remake agribusiness so that good food “would be 10X less expensive than crappy food.” The vehicle for change already exists. “We’ve built a movement,” the ads boast, a claim that might surprise free-from processors with a history that began before Hampton’s in 2011.

If good-for-you food companies were presidential candidates, Hampton Creek and Tetrick would be Donald Trump. No other individual or organization stirs as much controversy or garners as much attention in their respective fields.

Since his ersatz mayo began appearing on grocers’ shelves in 2013, Tetrick and his promotion of vegan-friendly dressing have been the focus of an outsized number of articles and reports that range from favorable to fawning. He may even have the ear of the Donald himself: According to Tetrick, after ads that began “Dear Presidential Candidates” appeared, he was contacted by four campaigns, including two calls from the candidates themselves (he declined to say which ones).

just mayo just defThe candidates ad, which ran July 26 and Aug. 2, laid the blame for diabetes, obesity, the destruction of family farms and strained race relations (in the form of food deserts) on “our outdated food system.” Tetrick invites them to join the Hampton movement and help in “fixing how we feed ourselves.” As with all but one letter, it closed with an invitation to drop him an email or call him directly. Readers who took him up on the offer often were surprised when Tetrick himself answered the phone. I was.

We talked about the candidate ads, the feedback he’d received from major retailers and fast-food chains “and thousands of consumers,” and his goal of healthier food that is better for the environment, tastes better and costs less. By the way, Tetrick says his products are in Dollar Tree stores.

The Times boasts of reaching more decision-makers than any other U.S. publication. But run-of-the-mill decision makers, even those who aspire to be the Decider in Chief, weren’t the ads’ target audience, some observers believe. They were lures for investors, and creating a new model for raising money, not creating new products, may be Tetrick’s greatest achievement. That, combined with masterful marketing and promotion, sets Hampton Creek apart.

Shake your money-maker

Hampton won’t mark its fourth anniversary until December, yet it already had booked $120 million in capital investment by the time it was three. The investors read like a who’s who of Silicon Valley: Bill Gates via Khosla Ventures; Eduardo Saverin, cofounder of Facebook; Jerry Yang/Yung, cofounder of Yahoo; and assorted billionaires and multi-billionaires. Whether they were turned on by the Elmer Gantry-like fervor of the promotions, the earth-friendly profile of the products, the hi-tech positioning of the company or all three, they chipped in more capital than other food start-ups with $30 million estimated sales can dream of.

For a self-described social entrepreneur with no previous experience in the food business, that’s not bad. After earning a degree in Africana studies from Cornell University and a law degree from University of Michigan, Tetrick spent seven years in Africa, where he worked as a Fulbright Scholar on a variety of social programs. As Tetrick explains, his movement “is not defined by food. It’s about the people—the people who believe that the right thing should be easier….It’s also about the outdated systems that just aren’t fit for the better world we’re trying to create.”

Hampton hit its first speed bump in the road of positive PR in early August, when Business Insider magazine published a piece that airs the grievances of unnamed former employees. Many of the complaints might be dismissed as sour grapes, but one charge hit the heart of Hampton’s positioning as a new-to-the-world, hybrid organization that combines pioneering food science with Silicon Valley precision. One former employee suggested Hampton is a “food company masquerading as a tech company.”Given the firm’s embrace by technology leaders, that complaint could potentially be very damaging.

San Francisco-based Hampton’s labs are populated with more data scientists than food scientists (the former lead data scientist for Google Maps did a brief turn there), analyzing and cataloging nutritional and functional characteristics of thousands of plants. The stated goal is to build the world’s largest plant database. Hampton has only analyzed a fraction of the number of plants it claims, some former employees maintain, a charge Tetrick emphatically denied in a subsequent blog.

More bad news arrived days after the Aug. 9 ad, when FDA sent a warning letter press to Tetrick (the campaign subsequently entered a two-week hiatus). Multiple labeling infractions were cited, notably the use of the word mayo in an eggless product. “We’ll sit down with the FDA shortly and are excited to talk with them about our approach,” Tetrick noted in a prepared statement.

 

The FDA complaint shouldn’t have caught Tetrick by surprise. Last October, Unilever sued Hampton over the same issue. Unilever dropped the suit in the face of negative feedback on social media. The suit inspired an online petition drive titled, “Stop Bullying Sustainable Food Companies” that garnered more than 100,000 signatures. Afterward, Tetrick crowed that the suit generated $20 million worth of free publicity for Just Mayo.

It’s worth noting that standards of identity are malleable, and Tetrick may prevail in the end. There was a time when low-fat ice cream was marketed as ice milk because it fell short of the level of fat stipulated in the ice cream standard. Likewise, someone somewhere gave plant-based beverage processors enough slack to call their products soy milk, almond milk and coconut milk.

“We’re the fastest growing food company on the planet because we focus on what people want,” Tetrick tells us, a dubious and unsubstantiated claim, given the firm doesn’t disclose either percentage growth or yearly sales.

Of greater interest, assuming it weathers the FDA complaint and the former employees’ charges, is where the movement Tetrick purports to be leading is headed. Will Just Mayo become a serious competitor to Unilever’s Hellman’s brand in the $2 billion mayonnaise market? If so, will it do so as a stand-alone organization or part of a multinational corporation, possibly even Unilever?

Bury ’em or buy ’em is the typical approach of Big Food to upstarts like Hampton Creek, often done in reverse order. Supply chain command and efficiencies of scale favor multi-billion dollar corporations, and anomalies like Wonderful Co. (marketers of pomegranate juice and pistachios, among other products) aside, today’s fast-growing startups usually get folded into Big Food organizations.

Today’s food business may be different, however. In part because of the Kraft-Heinz merger, industry leaders today are preoccupied with cutting costs and slashing product development capabilities. Layoffs and plant closings are the priorities for many, not acquisitions or new ventures into the free-from space. They still rule the roost in the zombie world known as the middle of the store, but that’s not real estate that’s appreciating in value.

Even Big Food’s retail partners are feeling the heat from new competitors: Amazon recently surpassed Walmart as the world’s largest retailer, at least in terms of market capitalization.

As new distribution channels open up and consumption preferences shift, start-ups like Hampton have new ways to grow and more options for remaining independent. Its CEO has some eye-opening ideas about doing that, up to and including an overhaul of public policy involving food production.

Would Hampton consider an eventual sale to, say, General Mills or Kraft Heinz? “If selling out means potentially considering those companies as acquisitions,” Tetrick responded, “then yes.”

Open eyes, insert thumb.