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My guess as to why it's successful is that it's always been moderately priced and Huy Fong is recognized as the originator of the "Americanized Sriracha" sauces

by goldcd 5y ago

My guess as to why it's successful is that it's always been moderately priced and Huy Fong is recognized as the originator of the "Americanized Sriracha" sauces. If a company tries to sell a cheaper version - then it feels like a cheap knock-off. And as everybody can afford to buy the original, why wouldn't you? If a company tried to sell a more expensive premium product in flashier packaging - then it would feel inauthentic. What are you paying more for? Plus whilst they've not paid for advertising, they've performed an excellent job of ensuring I'm aware of their history. I've no idea of the history of say Tabasco or Franks - but I've many times heard the history of this plucky little immigrant founded company (and this thread is just a continuation). Maybe the key is to just have a likable story - and let others tell it.

dystroy 5y ago
I don't think the likable story is key. Until recently, most of the many millions people buying the sauce didn't know anything about its origin. It was just the cheap sauce alone in its category that you could find everywhere.
- notahacker 5y ago
  And the irony is, the "you could find everywhere" bit is entirely down to the sales force he doesn't have (but his ten distribution partners do, and his Asian competitors didn't have in his target market for most of their existence) I've got two different blends of Sriracha sauce in my cupboard, both from Thai companies and one of them even copying Tran's bottle style, but it wouldn't have occurred to me until reading this article that a particular Vietnamese-American brand was supposed to be the "authentic" one. He could have got the origin story out there to people who don't watch documentaries about hot sauce if he'd spent money on advertising though...
- move-on-by 5y ago
  This is the first I've heard that there is a story behind it. I've got a bottle of it in the fridge right now. Perhaps some advertising wouldn't hurt.
  - SketchySeaBeast 5y ago
    You don't know the story but bought the product, so it's still working. Would knowing the story cause you to buy two?
- nonameiguess 5y ago
  I'd never heard an origin story, either. The reason I'd heard of it, liked it, and buy it myself is because restaurants very conspicuously put it on their tables. If that wasn't coordinated marketing, then I guess it's luck. But was probably marketing. Even without a "sales team," someone had to be going to those restaurants and making deals with them.
marban 5y ago
If a company tried to sell a more expensive premium product in flashier packaging - then it would feel inauthentic. What are you paying more for? Just stamp it artisan, hand-made, organic, gluten-free, whatever, quadruple the price and buy some Instagram ads.
- nextaccountic 5y ago
  That works, but you will have a hard time selling it at scale.
  - jeegsy 5y ago
    Just say small batch
- dsr_ 5y ago
  They've done this, and the non-Huy Fong brands just aren't as good in an all-purpose hot sauce way. Valentina black label is better for some things, though. It's not marketed as a sriracha sauce, just a Mexican hot sauce.
- dagw 5y ago
  People try that with ketchup all the time. It barely moves the needle. Sriracha, like Ketchup, is a 'cheap' product at this point. If people are going to spend 4 times as much they want something fancier.
ksec 5y ago
It is basically like Heinz Ketchup. It reaches a point where it has economy of scale and specific taste profile developed that it is very hard for others to break into the market. Similar to bake beans for those living in UK. The cost of ingredient is so low in the overall of things, restaurants, owner, vendors or whatever are not willing to switch ingredients and risk losing their customers. Tabasco is similar because majority of their business actually resides in Food Services sector and not consumers. The basic rule of thumb in Food offering, dont FUCK with your recipes. I remember when I was still in the Food sector I was trying to import and distribute Sriracha for years in the late 00s and very early 10s. Every time the answer has been not enough capacity. Demand outstripping Supply in most of their important / domestic ( US ) market. Importers have to rely on non-official parallel import channels. Somehow I think it went internet viral by mid 10s, which in turns generate further interest. And a whole positive feedback loop was formed. Worth noting is that these things takes a long time to make. I dont know about Sriracha but Tabasco takes up to three years. Once you factor in capacity planning and sourcing of quality chillies ( and assuming yields are good ), that is why supply takes time to catch up. Unfortunately these type of investment takes a very long time and are not something VC likes to invest in. But for me they are sometimes far more interesting and fascinating than most tech.
- ww520 5y ago
  That’s very interesting background info. I didn’t realize it take up to 3 years to make the sauce. It’s because they need to ferment some of the stuff?
  - ksec 5y ago
    Yes they need to sit in some barrels for aging. Similar to making of cheese like parmesan cheese. And they are still done in a very very old fashion way. ( For good reason ) The only process that is modern is quality control, packaging and bottling.
- enominezerum 5y ago
  My first exposure to Sriracha was the 2014 lawsuit where a plant in California was causing issues. Queue meeting my now asian wife whose family uses Sriracha in near about everything and it has basically replaced ketchup. Matter of fact they use it so much it changed MY spice tolerance such that we now have Sriracha Ketchup instead of Heinz. We even went the extra bit and replaced American Mayo with Kewpie mayo. American condiments can stand to learn from global condiments...
etempleton 5y ago
Yep. They have a product people like and those people like it so much they do the marketing for them. It is the dream of any company to not have to do traditional marketing and advertising. And what more would I possibly want from their product? It is a good product at a reasonable price. People are going to go with what they like. All you have to do at this point is not mess that up. Don’t try to increase profit margins by raising prices or changing the formula. And don’t do anything that is going to lower brand recognition. The biggest risk to Heinz ketchup, for example, is their premium price. Restaurant owners often go with a different ketchup because Heinz costs significantly more. Obviously Kraft-Heinz has determined that they can make more money this way and since they have strong brand recognition it probably won’t harm them.
- deleted 5y ago
  [deleted]
rattray 5y ago
I've tried three or four competing Sriracha sauces from Whole Foods, Trader Joe's, etc, and to my taste all are much less enjoyable than Huy Fong. It remains a differentiated product based on its core feature, taste.
- libraryatnight 5y ago
  Yes, to me this is a Coke like product. There are other sriracha sauces, just like there's other cola drinks, but so far there's only one Huy Fong Sriracha.
- res0nat0r 5y ago
  I'm the same, all of the knock off's don't taste very good. Mostly it seems they have much more vinegar flavor which I don't like and is most of the time the main reason why I think they are inferior.
  - HWR_14 5y ago
    Why are those knock offs? Sriracha has been an Asian sauce for a long time before Huy Fong.
    - res0nat0r 5y ago
      Because they aren't as good as the only US based sriracha maker I like. :)
- jagger27 5y ago
  There’s something about competitors that tastes off to me. Almost like they picked the peppers too green?
- jonahbenton 5y ago
  True though it's in the substantial economic interest of house brand teams to make it good enough, so they will keep trying. TJ in particular is quite good at this.
deleted 5y ago
[deleted]
intuitionist 5y ago
Sauce and condiment companies that establish a franchise tend to be enormously profitable in general (see also pre-KHC Heinz or Lee Kum Kee). The product is very cheap to make, and as you note a bottle of sauce is pretty inexpensive (and contributes almost nothing to the cost structure of a full meal) so customers aren’t all that price-sensitive. These facts are a recipe for fat margins and high ROIC.
forrestthewoods 5y ago
> If a company tried to sell a more expensive premium product in flashier packaging - then it would feel inauthentic. What are you paying more for? My grocery store has a half dozen Sriracha sauces. Some I like less, some I like more. They’re all pretty different in flavor.
Xavdidtheshadow 5y ago
> I've no idea of the history of ... Tabasco Aside, but if you ever find yourself in or near southern Louisiana, the Tabasco headquarters at Avery Island is actually a pretty fun outing. Lots of tasting (pre covid anyway), a self-guided factory tour, and some cool nature.
- selimthegrim 5y ago
  They have essentially an open air aviary.
clav3 5y ago
If you're interested in the Tabasco story check this out https://www.youtube.com/watch?v=Xnaj9ULhwqU https://www.youtube.com/watch?v=Xnaj9ULhwqU I found it interesting.
dcolkitt 5y ago
One thing that helped is it became the standard in pretty much every Pho restaurant I've ever been to. I don't know if that was intentional or not, but if definitely makes any alternative brand seem inauthentic.
The-Bus 5y ago
> I've no idea of the history of say Tabasco The Tabasco story is really interesting and it's essentially the Sriracha of the late 1800s and early 1900s. Tabasco is a private, family-owned company. They still grow all the seeds for its pepper crops on the same island they did in the 1800s [1]. Some family members were friends with Teddy Roosevelt [2]. I remember hearing, but cannot find a source right now, that Roosevelt like the sauce so much he had it included in military ration kits. [1] https://www.cbsnews.com/news/tabasco-hot-sauce-industry-60-minutes/ https://www.cbsnews.com/news/tabasco-hot-sauce-industry-60-m... [2] https://www.theodorerooseveltcenter.org/Blog/Item/John%20Avery%20McIlhenny:%20Rough%20Rider%20and%20Hot%20Sauce%20Head%20Honcho https://www.theodorerooseveltcenter.org/Blog/Item/John%20Ave...
hogFeast 5y ago
There is a book about the history of Tabasco -https://www.amazon.co.uk/dp/B000W9393O/ https://www.amazon.co.uk/dp/B000W9393O/

by goldcd 5y ago

dystroy 5y ago

I don't think the likable story is key. Until recently, most of the many millions people buying the sauce didn't know anything about its origin. It was just the cheap sauce alone in its category that you could find everywhere.

notahacker 5y ago
And the irony is, the "you could find everywhere" bit is entirely down to the sales force he doesn't have (but his ten distribution partners do, and his Asian competitors didn't have in his target market for most of their existence) I've got two different blends of Sriracha sauce in my cupboard, both from Thai companies and one of them even copying Tran's bottle style, but it wouldn't have occurred to me until reading this article that a particular Vietnamese-American brand was supposed to be the "authentic" one. He could have got the origin story out there to people who don't watch documentaries about hot sauce if he'd spent money on advertising though...
move-on-by 5y ago
This is the first I've heard that there is a story behind it. I've got a bottle of it in the fridge right now. Perhaps some advertising wouldn't hurt.
- SketchySeaBeast 5y ago
  You don't know the story but bought the product, so it's still working. Would knowing the story cause you to buy two?
nonameiguess 5y ago
I'd never heard an origin story, either. The reason I'd heard of it, liked it, and buy it myself is because restaurants very conspicuously put it on their tables. If that wasn't coordinated marketing, then I guess it's luck. But was probably marketing. Even without a "sales team," someone had to be going to those restaurants and making deals with them.

marban 5y ago

If a company tried to sell a more expensive premium product in flashier packaging - then it would feel inauthentic. What are you paying more for? Just stamp it artisan, hand-made, organic, gluten-free, whatever, quadruple the price and buy some Instagram ads.

nextaccountic 5y ago
That works, but you will have a hard time selling it at scale.
- jeegsy 5y ago
  Just say small batch
dsr_ 5y ago
They've done this, and the non-Huy Fong brands just aren't as good in an all-purpose hot sauce way. Valentina black label is better for some things, though. It's not marketed as a sriracha sauce, just a Mexican hot sauce.
dagw 5y ago
People try that with ketchup all the time. It barely moves the needle. Sriracha, like Ketchup, is a 'cheap' product at this point. If people are going to spend 4 times as much they want something fancier.

ksec 5y ago

It is basically like Heinz Ketchup. It reaches a point where it has economy of scale and specific taste profile developed that it is very hard for others to break into the market. Similar to bake beans for those living in UK. The cost of ingredient is so low in the overall of things, restaurants, owner, vendors or whatever are not willing to switch ingredients and risk losing their customers. Tabasco is similar because majority of their business actually resides in Food Services sector and not consumers. The basic rule of thumb in Food offering, dont FUCK with your recipes. I remember when I was still in the Food sector I was trying to import and distribute Sriracha for years in the late 00s and very early 10s. Every time the answer has been not enough capacity. Demand outstripping Supply in most of their important / domestic ( US ) market. Importers have to rely on non-official parallel import channels. Somehow I think it went internet viral by mid 10s, which in turns generate further interest. And a whole positive feedback loop was formed. Worth noting is that these things takes a long time to make. I dont know about Sriracha but Tabasco takes up to three years. Once you factor in capacity planning and sourcing of quality chillies ( and assuming yields are good ), that is why supply takes time to catch up. Unfortunately these type of investment takes a very long time and are not something VC likes to invest in. But for me they are sometimes far more interesting and fascinating than most tech.

ww520 5y ago
That’s very interesting background info. I didn’t realize it take up to 3 years to make the sauce. It’s because they need to ferment some of the stuff?
- ksec 5y ago
  Yes they need to sit in some barrels for aging. Similar to making of cheese like parmesan cheese. And they are still done in a very very old fashion way. ( For good reason ) The only process that is modern is quality control, packaging and bottling.
enominezerum 5y ago
My first exposure to Sriracha was the 2014 lawsuit where a plant in California was causing issues. Queue meeting my now asian wife whose family uses Sriracha in near about everything and it has basically replaced ketchup. Matter of fact they use it so much it changed MY spice tolerance such that we now have Sriracha Ketchup instead of Heinz. We even went the extra bit and replaced American Mayo with Kewpie mayo. American condiments can stand to learn from global condiments...

etempleton 5y ago

Yep. They have a product people like and those people like it so much they do the marketing for them. It is the dream of any company to not have to do traditional marketing and advertising. And what more would I possibly want from their product? It is a good product at a reasonable price. People are going to go with what they like. All you have to do at this point is not mess that up. Don’t try to increase profit margins by raising prices or changing the formula. And don’t do anything that is going to lower brand recognition. The biggest risk to Heinz ketchup, for example, is their premium price. Restaurant owners often go with a different ketchup because Heinz costs significantly more. Obviously Kraft-Heinz has determined that they can make more money this way and since they have strong brand recognition it probably won’t harm them.

deleted 5y ago
[deleted]

rattray 5y ago

I've tried three or four competing Sriracha sauces from Whole Foods, Trader Joe's, etc, and to my taste all are much less enjoyable than Huy Fong. It remains a differentiated product based on its core feature, taste.

libraryatnight 5y ago
Yes, to me this is a Coke like product. There are other sriracha sauces, just like there's other cola drinks, but so far there's only one Huy Fong Sriracha.
res0nat0r 5y ago
I'm the same, all of the knock off's don't taste very good. Mostly it seems they have much more vinegar flavor which I don't like and is most of the time the main reason why I think they are inferior.
- HWR_14 5y ago
  Why are those knock offs? Sriracha has been an Asian sauce for a long time before Huy Fong.
  - res0nat0r 5y ago
    Because they aren't as good as the only US based sriracha maker I like. :)
jagger27 5y ago
There’s something about competitors that tastes off to me. Almost like they picked the peppers too green?
jonahbenton 5y ago
True though it's in the substantial economic interest of house brand teams to make it good enough, so they will keep trying. TJ in particular is quite good at this.

deleted 5y ago

[deleted]

intuitionist 5y ago

Sauce and condiment companies that establish a franchise tend to be enormously profitable in general (see also pre-KHC Heinz or Lee Kum Kee). The product is very cheap to make, and as you note a bottle of sauce is pretty inexpensive (and contributes almost nothing to the cost structure of a full meal) so customers aren’t all that price-sensitive. These facts are a recipe for fat margins and high ROIC.

forrestthewoods 5y ago

> If a company tried to sell a more expensive premium product in flashier packaging - then it would feel inauthentic. What are you paying more for? My grocery store has a half dozen Sriracha sauces. Some I like less, some I like more. They’re all pretty different in flavor.

Xavdidtheshadow 5y ago

> I've no idea of the history of ... Tabasco Aside, but if you ever find yourself in or near southern Louisiana, the Tabasco headquarters at Avery Island is actually a pretty fun outing. Lots of tasting (pre covid anyway), a self-guided factory tour, and some cool nature.

selimthegrim 5y ago
They have essentially an open air aviary.

clav3 5y ago

If you're interested in the Tabasco story check this out https://www.youtube.com/watch?v=Xnaj9ULhwqU https://www.youtube.com/watch?v=Xnaj9ULhwqU I found it interesting.

dcolkitt 5y ago

One thing that helped is it became the standard in pretty much every Pho restaurant I've ever been to. I don't know if that was intentional or not, but if definitely makes any alternative brand seem inauthentic.

The-Bus 5y ago

> I've no idea of the history of say Tabasco The Tabasco story is really interesting and it's essentially the Sriracha of the late 1800s and early 1900s. Tabasco is a private, family-owned company. They still grow all the seeds for its pepper crops on the same island they did in the 1800s [1]. Some family members were friends with Teddy Roosevelt [2]. I remember hearing, but cannot find a source right now, that Roosevelt like the sauce so much he had it included in military ration kits. [1] https://www.cbsnews.com/news/tabasco-hot-sauce-industry-60-minutes/ https://www.cbsnews.com/news/tabasco-hot-sauce-industry-60-m... [2] https://www.theodorerooseveltcenter.org/Blog/Item/John%20Avery%20McIlhenny:%20Rough%20Rider%20and%20Hot%20Sauce%20Head%20Honcho https://www.theodorerooseveltcenter.org/Blog/Item/John%20Ave...

hogFeast 5y ago

There is a book about the history of Tabasco -https://www.amazon.co.uk/dp/B000W9393O/ https://www.amazon.co.uk/dp/B000W9393O/