The great Sriracha battle 
is coming to America

Thailand’s Thaitheparos seeks to chip away at Huy Fong Foods’ dominance of the American palate with Sriraja Panich

By SOPHIE ALEXANDER & RANDY THANTHONG-KNIGHT / Pic By BLOOMBERG

Selling “a rich man’s sauce at a poor man’s price” has made David Tran a very wealthy man.

The 73-year-old Vietnamese refugee is responsible for bringing Sriracha to American consumers.

After settling in Los Angeles (LA) in 1979, Tran founded Huy Fong Foods Inc, named for the Huey Fong boat that brought him to the US, and started making hot sauces for local Asian restaurants. He earned US$2,300 (RM9,407) in the first month of selling his creations out of a blue van hand-painted with the brand’s iconic rooster. (Tran, who is ethnically Chinese, was born in the year of the rooster.)

If we can get just 1% of market share in the US, that would already be huge for us, says Bancha

Now, almost four decades later, Huy Fong controls 9.9% of the US$1.55 billion American hot-sauce market, according to IBISWorld, an industry researcher.

“I never thought that it would be so popular,” said Tran, who owns the company with his family. “When I left Vietnam, I didn’t know how it would be for tomorrow, so today God bless me.”

The Huy Fong factory in Irwindale, California, about 20 miles (32km) east of downtown LA, is a pristine facility with silver conveyor belts that each day shuttle hundreds of thousands of bright red bottles of Sriracha and their distinctive green caps into cardboard boxes. The factory, which operates up to 16 hours a day most days of the week, uses 100 million lbs (45.36 million kgs) of chillies each year. That’s enough spice to irritate the senses of some Irwindale neighbours.

More than 8,000 miles away in a suburb of Bangkok, factory workers toil without air conditioning as forklifts roll through 90°F (32°C) heat hauling boxes of the same kind of chilli sauce — this one with a red and yellow label and called Sriraja Panich.

Most Americans haven’t heard of the Thai brand, which claims to be the original Sriracha recipe, and that’s something the family behind the sauce is hoping to change.

“If we can get just 1% of market share in the US, that would already be huge for us,” said Bancha Winyarat, the 33-year-old VP of Thaitheparos pcl, which makes Sriraja Panich. The Winyarat family owns a majority of the publicly traded sauce maker, with a market value of more than eight billion Thai baht (RM1.03 billion).

Sriracha was first made about 80 years ago by Thanom Chakkapak, a woman from Si Racha, Thailand, a coastal town 73 miles south of Bangkok, according to the company’s website. Bancha’s father purchased the Sriraja Panich recipe from Thanom in 1984 — a year after Tran started making his own version of the sauce in LA.

Soy sauce makes up the bulk of Thai-theparos’ revenue, with chilli sauce accounting for just 5%, but it’s still the most popular local brand, Winyarat said.

“It’s the taste that people around here are familiar with,” he said.

Major condiment brands like Tabasco, Frank’s red hot and Heinz have introduced their own Sriracha products

As Huy Fong’s Tran, the king of American Sriracha, expands in Asia and Thaitheparos targets the US market, both are faced with different tastes and brand loyalties. Tran’s Sriracha uses fresh red jalapenos from across the US, while the less viscous Sriraja Panich uses cayenne peppers from northern and central Thailand. Tran said he has never tried Sriraja Panich.

“I like the Thai version more, but maybe that’s because I’m used to the taste,” said Suntaree Tantichula, a Thai chef at a restaurant in Evanston, Illinois. “But I think Americans might prefer Huy Fong sauce because it’s the taste they know.”

Tran’s Sriracha started out as a staple on the tables of LA Asian restaurants and grew into a national phenomenon. How Sriracha became so popular across the rest of the country is anyone’s guess, as Huy Fong has never advertised its products. The company’s relative obscurity is perhaps what helped it stand out and seem more authentic, said Anna Amir, an IBISWorld hot-sauce analyst.

The fact that “people hear about it through word of mouth gives it kind of a unique edge in an industry with a lot of advertising”, she said.

When he started the company, Tran struggled to find fresh chillies, so making enough sauce for existing customers was already difficult. Eventually, he found one supplier: Camarillo, California-based Under-wood Ranches. But after 28 years of it being the exclusive provider of Huy Fong’s chillies, Tran said, a dispute ended the relationship and Underwood went on to make its own Sriracha.

For the past few years, the companies have been enmeshed in a legal battle over advance payments and factory equipment. A trial is scheduled for April 29 in California Superior Court.

“It’s very easy to make it if you have fresh chillies,” said Tran, who now has three US suppliers.

Tran said he has received multiple offers for his company, but he said he won’t consider them because he plans to pass along the business to his children.

Major condiment brands like Tabasco, Frank’s Red Hot and Heinz have introduced their own Sriracha products. Tran welcomes the new entrants because Americans’ appetite for Sriracha is insatiable, he said.

“I never worry about where they are selling more or less because we are too busy making it,” Tran said. “I know that I cannot make enough of my product to meet the demand, so let them have it and work together for the consumer.” — Bloomberg