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A rare look into Sriracha's runaway success

Posting in Food

Its reddish orange hue, that familiar squeeze bottle with the green cap... Sriracha has had a place at my family’s table since I was a kid. Now there are maple syrup and Bloody Marys boasting Sriracha as the key ingredient, entire cookbooks of rooster recipes, a Trader Joe’s version, and even a documentary in the works. It was also one of three new flavors competing in a Lay’s potato chips contest.

With 20 million bottles sold last year alone, Sriracha is arguably the world’s coolest hot sauce. Quartz takes us behind the scenes of a highly unusual company.

David Tran founded Huy Fong Foods 33 years ago in Los Angeles. Having recently arrived from Vietnam, he suffered hot sauce withdrawal. Within months, he arrived at his rendition of Sriracha, a version of the Thai sauce made with hybrid jalapeño peppers, vinegar, sugar, salt, and garlic, and was delivering it to local markets.

Last year, Sriracha sales reached $60 million, percentage sales growth has been in the double digits every year, and the company does all of this without spending a cent on advertising. (Though Tran’s lawyer writes four to five infringement complaints for the company every year.)

Today, hot sauce is an emerging global business. The industry -- among the 10 fastest growing in the U.S. -- rakes in over $1 billion a year in global sales.

Though, for Tran, growing a bona fide business wasn’t an afterthought -- it wasn’t a thought at all.

He says he has not once hiked the wholesale price at which he sells Sriracha… no matter that inflation has more than tripled food prices since 1980. He can’t tell you where Sriracha is being sold, because all he knows is that Huy Fong has ten distributors, to whom he has handed off his hot sauce for over 10 years now.

The company recently purchased a new 650,000-square-foot factory. The current facility produces 3,000 bottles every hour, 24 hours a day, six days a week, and the new one will have at least twice that capacity.

The company’s biggest obstacle to growth, however, is raw materials: chilies, which must be processed within a day of being picked.

Last year, Huy Fong processed 100 million pounds of fresh chilies -- from its sole supplier, Underwood Family Farms -- over the course of its 10-week-long harvest season. That provides for the entirety of the company’s yearlong Sriracha sales.

“We can only grow as quickly as our ability to harvest chilies grows,” Tran says. That also explains why Huy Fong has never employed a salesman or spent any money on advertising: that would widen the gap between demand and supply even further. The company has no social media accounts, its website is bare-boned, and until recently, its CEO has shunned publicity.

Tran doesn’t want anyone to know how fast Huy Fong is growing for fear that more people will show up at his doorstep with business pitches he doesn’t care to hear and growth plans he couldn’t be less interested in.

[Quartz]

Image: Dov Harrington via Flickr

— By on October 23, 2013, 2:39 PM PST

Janet Fang

Contributing Editor

Janet Fang has written for Nature, Discover and the Point Reyes Light. She is currently a lab technician at Lamont-Doherty Earth Observatory. She holds degrees from the University of California, Berkeley and Columbia University. She is based in New York. Follow her on Twitter. Disclosure