News highlights, market trends, and original data analysis related to the U.S. retail food & beverage industry … by Jay Nargundkar

Huy Fong Sriracha Is Unlike Any Other Brand

huy-fong-srirachaAt first, sriracha was the hot sauce you saw becoming ubiquitous at little Thai and Vietnamese eateries in the U.S.; over time it began to pop up in hip sandwich shops and burger joints; now, completely mainstream, it’s found at street food carts, in spicy sushi rolls, and even offered at Subway.

The brand responsible for creating the trend, Huy Fong, has legions of devotees addicted to its famous green-capped plastic sauce bottles with rooster logo; it has also spawned many imitators. Yet after over three decades on the market, Huy Fong Sriracha remains a unique success not just for its foreign-inspired origins and grassroots growth, but for the very unorthodox business practices of founder/CEO David Tran. Some of these were elucidated in a great article by Quartz last year.

Huy Fong Sriracha bring in roughly $60 million a year from the sale of over 20 million bottles. Since Tran began selling Huy Fong in 1980, he has never once raised the wholesale price of his product — meanwhile, food inflation has tripled over that time period. Furthermore, he has never done any marketing – “in 33 years… [he] has neither employed a single salesman nor spent a cent on advertising”.

In fact, Tran doesn’t even know where his sauces are sold, relying on the same small network of distributors he has worked with for years. Huy Fong has used just one exclusive local chili supplier, situated near its factory, for the past 20 years. And while the company’s success has drawn many interested prospective investors and buyers, Tran has turned down all lucrative offers to sell the company or expand production, preferring to keep it a family business between him, his son, and his daughter. Despite – and maybe because of – rejecting every business school lesson, Tran has a product absolutely beloved, particularly by young people.

Huy Fong’s success is an amazing feat, all the more amazing for a product started by an immigrant fleeing the Vietnam War just one month after he landed in the U.S. from a refugee camp. Tran originally set out to make a simple sauce for fellow Vietnamese immigrants; even just a few years ago, Tran’s son (Huy Fong’s president) was quoted saying “we still sell 80 percent of our product to Asian companies, for distribution through Asian channels. That’s the market we know. That’s the market we want to serve”. Suffice to say, a much broader market has found Huy Fong.



This entry was posted on September 4, 2014 by in Products and tagged , , .

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