The highly unusual company behind Sriracha, the worldâ€™s coolest hot sauce
J Thoendell stashed this in Home
If David Tran were a more conventional CEO, he would be a fixture at conferences, a darling of magazine profiles, and a subject of case studies in the Harvard Business Review. Sriracha hot sauce, made by Huy Fong Foods, which Tran founded 33 years ago in Los Angeles, is one of the coolest brands in town. There areÂ entire cookbookswritten to celebrate Srirachaâ€™s versatility;Â memorabilia ranging fromÂ iPhone coversÂ toÂ t-shirtsÂ andÂ all sorts of other swag;Â a documentary in the worksÂ to chronicle its rise; and innumerable imitators. Sriracha sales last year reached some 20 million bottles to the tune of $60 million dollars, percentage sales growth is in the double digits each year, and it does all this without spending a cent on advertising.
Yet Tran shuns publicity, professes not to care about profits, hardly knows where his sauces are sold, andÂ probably leaves millions of dollars on the table every year.Â His dream, Tran tells Quartz, â€śwas never to become a billionaire.â€ť It is â€śto make enough fresh chili sauce so that everyone who wants Huy Fong can have it. Nothing more.â€ť
I never knew the history:
Today hot sauce is an emerging global business. The industry, which is among the 10 fastest growingÂ in the US, now rakes in over $1 billion a year in global sales.Â But when Tran arrived in Los Angeles back in 1980, he was both jobless and hot-sauce-less. Having recently arrived from Vietnam, Tran found it near impossible to find a spicy additive worthy of his palate. The Southeast Asian community inÂ Los Angeles, he soon realized, was suffering from the same hot sauce withdrawal.
In a matter of months, he had arrived at his rendition of Sriracha, a version of the Thai sauce made with hybrid jalapeĂ±o peppers (red or sometimes orange in color), vinegar, sugar, salt, and garlic, and was delivering it to local markets throughout the city. Soon thereafter, he was packaging it into its now unmistakable clear bottles with the rooster logo and green caps.
Part of why Sriracha is growing so much is that it's so versatile:
Tran also learned only recently that Sriracha has become a popular ingredient among sushi chefs, who have been using it to spice up spicy tuna rolls for years. â€śI didnâ€™t know until one of my distributors told me,â€ť Tran said. In fact, says Hammond, itâ€™s â€śalmost always the spicy ingredient in spicy tuna rolls these days. It probably makes up a pretty significant portion of their sales.â€ť
Sushi chefs arenâ€™t the only ones. Restaurant chainÂ P.F. Chang, which has 204 branches in the US and worldwide,Â offers Sriracha-flavored dishes. Chef David Chang (no relation to P.F. Changâ€™s) has bottles of Sriracha on every countertop of his Momofuku Noodle Bar restaurant in New York.Â Bon AppĂ©tit magazineÂ declared the sauce theÂ ingredient of the yearÂ back in 2010,Â andÂ Cookâ€™s IllustratedÂ called it the best-tasting hot sauceÂ in 2012. Though it didnâ€™t win, Sriracha was one of three new flavors chosen inÂ Lays potato chipsâ€™ new flavorÂ contest last year.
He's already making 3000 bottles an hour, and stepping up capacity:
Demand is such that Huy Fongâ€”which also makes Chili Garlic and Sambal Oelek, two significantly less popular hot saucesâ€”recently purchased a new 650,000-square-foot (60,000 sq m) factory just to process and bottle its Sriracha. Itâ€™s quite the upgrade: the current facility produces 3,000 bottles every hour, 24 hours a day and six days a week, and the new one will have two-and-a-half times that capacity.
One of the few data points Tran will reveal about Huy Fong is that it processed some 100 million pounds (45 million kilograms) of fresh chilies last year over the course of its harvest season, which lasts only 10 weeks and provides for the entirety of the companyâ€™s yearlong Sriracha sales. â€ťWe can only grow as quickly as our ability to harvest chilies grows,â€ť Tran said. His unwillingness to compromise on quality means that the chilies for Sriracha need to be processed within a day of being picked.
So, basically, Sriracha sauce is going to get more expensive (once they run out of chilis to process). Crazy.
Yes Sriracha will get more expensive unless they figure out how to grow more of the chilies each year.