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Manufacturing Equipment

Snack Company Wins $21M Verdict From Supplier Because Defective Machine Caused its Bankruptcy

Oct. 24, 2023

Smashmallow went bankrupt because the machine it bought could not commercialize its product.

A jury in Santa Rosa, Calif., awarded $21 million to a snack company that went bankrupt because a machinery supplier repeatedly failed to come up with a machine to commercialize its product.

Smashmallow, a Sonoma Brands portfolio company, created its eponymous snackable marshmallows, a product that was unique to the American market, in 2016. It contracted with Dutch food machine builder Tanis Food Tec to build a machine to scale up its marshmallow production, according to BraunHagey & Borden, the law firm that represented Smashmallow.

“Smashmallow paid the defendant millions of dollars, but the machine was defective and unsafe,” said the law firm. “After years of work and hundreds of thousands of dollars of repairs, the machine still could not make marshmallows to Smashmallow’s specifications, and Smashmallow had no choice but to wind down its operations.”

Smashmallow sued the machine manufacturer and -- two years after filing and following a six-week trial -- was awarded the damages on Oct. 20.

About the Author

Dave Fusaro | Editor in Chief

Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.