The Superior Court of California has ruled Beyond Meat must pay Don Lee Farms in their contract dispute. The court found that, despite Beyond Meat’s claim, the product in question was not adulterated and no evidence submitted by Beyond Meat disputed the fact that Don Lee Farms fully performed under their Exclusive Supply Agreement with respect to this claim.
The court stated that Beyond Meat cannot create a triable issue of material fact based on conjecture, speculation or guesswork. The court also ruled that Beyond Meat had no evidence to support its property claim and that its negligent misrepresentation claim was meritless.
Beyond Meat is currently being sued by Don Lee Farms for fraud, negligence and breach of contract. During the agreement, Don Lee Farms shared trade secrets, know-how and technology the family food company developed over 35 years.
During the partnership, Don Lee Farms raised significant concerns regarding inadequate food safety protocols for raw materials produced at Beyond Meat’s facility, after receiving adulterated product to be used to make consumer items for Beyond Meat.
“We’re thrilled with these victories. As we continue to trial on additional counts including on trade secrets, the public will be given the opportunity to see what happened at Beyond Meat. There are material facts surrounding the launch and production of the Beyond Burger that could shock a lot of people,” said Donald Goodman, president of Don Lee Farms.
In addition to the court rulings, Beyond Meat CFO Mark Nelson’s early retirement will have no bearing on his continued role in this lawsuit or the allegation that he doctored the critical third-party food safety audit report. Nelson knows that Beyond Meat sought out and contracted Don Lee Farms to be the initial and sole manufacturer to scale up and produce the Beyond Burger, Beyond Meat’s flagship product, as their exclusive co-packer.
Don Lee Farms has more than 30 years of research and development, production expertise and technological know-how in meat, vegetarian and vegan proteins.
“We are very proud of our family’s history as a leader in the food industry going back to the 1940s,” Goodman said. “In our opinion, the facts are clearly on our side. Our claims have been shown to several judges and courts have continuously ruled in our favor. We are pleased with where we are today, but it is still just the beginning. Contrary to Beyond Meat’s marketing story, we will prove our claim that Beyond Meat misappropriated our trade secrets to manufacture the Beyond Burger and other products. We will prove the breach of the Exclusive Supply Agreement and fraud claim committed by Mr. Nelson and others.”
Whole Foods Market, a customer of Don Lee Farms’ plant-based and meat proteins since 2012, introduced startup Beyond Meat to Don Lee Farms in 2014 to help Beyond Meat make meat alternatives. Beyond Meat entered into an exclusive supply agreement with Don Lee Farms to produce all of their products (including the development and launch of the Beyond Burger). The Beyond Burger was solely manufactured by Don Lee Farms under the exclusive supply agreement in 2016. After the success of the new burger, the startup walked away from the agreement in 2017 and transferred production and processes developed by Don Lee Farms under the agreement to other food manufacturers.
The Beyond Burger is around 70 percent of their total sales, according to the startup.