If you look at the common denominator of the things that have become “pain points” for the country, she said, “it’s lacking empathy, it’s lacking emotional fitness.”
Jewel and Drinkwater are locked in a thorny legal battle with the supermarket chain over rights to the fair. The duo is suing Kroger over an alleged breach of contract, claiming the company took over the festival before their agreed-upon five-year partnership was scheduled to end, among other issues. Kroger cut them out of their own festival, the complaint alleges, leaving Drinkwater with crushing debt and cheating him and Jewel out of potentially millions in revenue.
Kroger declined to comment for this story. McMullen did not immediately respond to a request for comment. The corporation has sought to have the lawsuit dismissed, and, in a legal filing, it disputes whether the duo had a valid agreement with Kroger under Ohio law.
The lawsuit was first filed in California in 2022, then refiled in Ohio in late 2023. But it has been getting more attention lately because of more recent changes at Kroger.
It’s unclear if the festival lawsuit and McMullen’s resignation are related. But because of the wellness festival spat, the former chief executive may soon be required to answer questions that would reveal why he was forced to suddenly step down from the corner office job he held for 11 years at the company where he toiled for more than four decades.
For Kroger, the wellness festival was a kind of experiment, but Drinkwater was a veteran of that style of business model, he recently told Fortune. His company agrees to take on the financial risks and rewards of staging a festival, while the retailer taps their suppliers to participate and be sponsors. It typically takes at least three years to begin turning a profit, which is why he insists on a five-year minimum commitment.
In 2017, according to the complaint, he connected with a Kroger executive by happenstance and got to talking about his work. He discovered that Kroger was looking to boost its reputation for selling healthy foods and “better for you” products. Before long, Drinkwater—who had met Jewel and was aware of her work promoting better mental health, he told Fortune—pitched a health festival featuring Jewel to Kroger, and the grocer gave the idea a green light, the lawsuit states.
In 2018, Drinkwater’s Inclusion and Wellness Your Way LLC, which Jewel and Drinkwater created for the festival, began working on the event. Rather than draw a formal contract, the legal filing says, Drinkwater took an email conversation about the event as an agreement that Kroger and Wellness Your Way would work as partners for five years, according to the lawsuit. (He had not created a formal contract at Walmart, he says.)
In the court documents, the plaintiffs cite an email from a Kroger executive asking, “[d]oes that mean we are committing to an event every year for the next 5 years?” To that, the complaint continues, “Inclusion responded in writing that a five-year commitment was a prerequisite to a deal.”
The complaint argues that Jewel’s contributions “were enormously important to the success of the event,” explaining that the singer performed 12 musical shows, sat on 45 speaking panels, showed up at 16 VIP events for Kroger executives, and attended 20 press events. Through her extensive network, Jewel even helped land 65 “thought leaders and celebrities,” the filing says.
Jewel declined Fortune’s request for a comment.
In 2021, the event finally began making more money than it was spending, taking in $500,000, the lawsuit states, but that still left Drinkwater with a $2 million deficit.
Tensions were also brewing behind the scenes. Drinkwater and Jewel allege in the complaint that they were given little choice but to use the services of a third-party vendor named Advantage Sales to find sponsors, despite their interest in a different company with a proven track record. The producers later learned that Advantage and the president of Kroger Health, Colleen Lindholtz, were closely connected: The festival producers “entered into a written contract with Advantage Sales without knowing that the person at Advantage primarily handling sponsorship sales, Lisa Haubner, was Lindholz’s sister, or that Haubner had been a paralegal for 17 years and had virtually no experience with sponsorship sales.” By directing Wellness Your Way to use Advantage, the document continues, Kroger was ignoring its anti-nepotism policy.
“It doesn’t look good,” says Drinkwater’s attorney Brian O’Connor. “We expect to explore at trial the culture and environment at Kroger, and what the policies were that allowed this to happen. How did this not get flagged?”
In its motion to dismiss the case, Kroger argues the supermarket giant cut ties with Drinkwater and Jewel because of issues that arose during the partnership. For example, Kroger says that Drinkwater’s company, Inclusion, didn’t pay vendors on time. (Drinkwater says delayed payments in 2019 were resolved before the next event.)
However, Kroger does not address the nepotism allegation.
Advantage, Hauber, and Lindholtz did not respond to Fortune’s request for comment.
In the spring of 2022, Kroger executives said they wanted to take over the festival.
At first, it didn’t appear that Drinkwater and Jewel would be shut out of the project entirely, the complaint states. Instead, Drinkwater was told his company would become a vendor, while Advantage would become the fair’s producers, and Kroger would be the owner. McMullen wanted Kroger to have ownership of the exhibition, and envisioned the festival becoming part of his legacy, an executive at the grocer told Drinkwater, the lawsuit explains.
But Drinkwater alleges that Kroger and Advantage were “secretly” conspiring to move forward without him and Jewel, according to court documents. Then Kroger “unilaterally terminated the partnership with WYWF,” the legal filing says.
Jewel reached out directly to McMullen, someone she by now counted as a friend, Drinkwater says. “Kroger no longer wants to work with us, and Kroger is sending out the deck we built to our sponsors and moving forward with our festival without us it seems. It appears we have been hijacked,” Jewel wrote, the complaint and other filings show. “I’d love to get on the phone or meet in person to resolve this if we can.”
In the same email, he tells Jewel: “I really appreciate your leadership and partnership in bringing Wellness Your Way to life — Outstanding!”
But when Jewel requested a conversation with McMullen about the festival’s “hijacking,” the then-CEO responded: “I’m not involved in planning of the Festival this year.” He also said it was great to hear from her, but suggested that she reach out to Lindholtz.
As a witness in the case, McMullen was deposed in mid-April, but a court filing in the case shows that “disputes arose over the scope of permissible questioning.” O’Connor says that Kroger’s lawyers shut down the procedure when the opposing legal team began asking probing questions related to McMullen’s resignation.
When Kroger publicized McMullen’s departure, the board only said that it was made aware of an issue involving McMullen on Feb. 21, “and immediately retained outside independent counsel to conduct an investigation.” To date, whatever the board learned has yet to become public information. “Mr. McMullen’s conduct is not related to the Company’s financial performance, operations or reporting, and it did not involve any Kroger associates,” Kroger’s statement said.
At a public hearing in a municipal Cincinnati court earlier this week, the judge in the wellness festival case heard arguments from both camps about McMullen’s deposition. O’Connor says his team doesn’t expect to hear from the judge until June about whether the personal matter at the heart of McMullen’s ouster will be off-limits when McMullen’s deposition continues.
At the hearing, McMullen’s lawyer said the reason McMullen was investigated is not criminal, has nothing to do with this lawsuit, and would be embarrassing, according to O’Connor. McMullen’s attorney did not respond to Fortune’s request for comment.
But Jewel will not appear on any of them.
