Portland-based Salt & Straw has sued local ice cream maker Ruby Jewel, accusing the company of breaching an agreement to produce Tacolate—a chocolate-coated ice cream dessert resembling the popular Choco Taco. Tacolate debuted last year and began being sold nationwide at Taco Bell restaurants in September. The first batch sold out in less than a week.
The partnership with Taco Bell is particularly important for scaling the product because of the company’s extensive U.S. restaurant network, large distribution system and access to millions of potential customers. The association with Choco Taco—a well-known taco-shaped dessert formerly sold under the Klondike brand—also helps consumers quickly understand the concept behind Tacolate and strengthens its marketing appeal.
According to the lawsuit, the companies signed a three-year agreement in February 2025 under which Ruby Jewel would produce Tacolate at its facility in northeast Portland through February 2028. The area is considered one of the city’s important industrial centers, with food manufacturers, warehouses, distribution centers and transportation infrastructure. However, on Oct. 2, Ruby Jewel allegedly announced that it would stop producing ice cream and Tacolate on Oct. 6 and lay off all production employees two days later. Company CEO Eric Koppelman has not yet confirmed those plans.
Salt & Straw says it invested more than $2 million in equipment to produce Tacolate and paid Ruby Jewel more than $1.9 million under the agreement. Ruby Jewel reportedly said the closure was prompted by Salt & Straw’s sharp—more than 60%—cut to its projected demand for the period from October through March. Salt & Straw maintains that the agreement does not allow production to be terminated because of declining demand.
Negotiations over changing the partnership began in September, when Ruby Jewel offered to sell its manufacturing division to Salt & Straw for $5 million. Salt & Straw declined but discussed leasing the facility and purchasing the equipment at market value. After Ruby Jewel rejected that proposal, Salt & Straw went to court, seeking to have production continue through the end of the agreement or to receive enough time to make an orderly transition to another qualified manufacturer.
Finding a replacement in northeast Portland may theoretically be possible because of the concentration of food-processing companies, but a new partner would need suitable freezing equipment, available production lines, the necessary capacity and a verified record of complying with sanitation standards. As a result, the transition could require considerable time and organizational expense.
Tacolate continues to be sold through Taco Bell, the Salt & Straw online store, company-owned shops and some Portland-area retailers.
Based on: Salt & Straw v. Ruby Jewel: Wildly popular ice cream taco behind lawsuit