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Sriracha hit revenue of $150M a year with no sales team or ad spend

799 pointsby dsr12almost 4 years ago

42 comments

goldcdalmost 4 years ago
My guess as to why it&#x27;s successful is that it&#x27;s always been moderately priced and Huy Fong is recognized as the originator of the &quot;Americanized Sriracha&quot; sauces.<p>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&#x27;t you?<p>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?<p>Plus whilst they&#x27;ve not paid for advertising, they&#x27;ve performed an excellent job of ensuring I&#x27;m aware of their history. I&#x27;ve no idea of the history of say Tabasco or Franks - but I&#x27;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.
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boomboomsubbanalmost 4 years ago
The part that strikes me is that they still have the same 10 distributors since the 80&#x27;s.<p>The &quot;local Chinese restaurant&quot; is a much more franchised thing than most people are aware of, and those 10 distributors meant it already ended up throughout the country and allowed everyone to try it for free. This is likely the secret to it&#x27;s success.<p>The only similar product I can think of is Mountain Dew Baja Blast. Though it did get some advertising, by automatically being available in every Taco Bell it became a minor craze. It&#x27;s not an easily reproducible concept though.
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modelessalmost 4 years ago
&quot;No trademark&quot; is misleading. They have trademarks. Without them I expect exact clones would take their sales. The bottle and logo are quite distinctive and trademarked. The thing they didn&#x27;t trademark is the name Sriracha.
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Danierualmost 4 years ago
No comments yet pointing out what I think is the important point: Siracha is the established brand.<p>If anyone wants to compete with Siracha they would be best served by using marketing. That Siracha gets to skip spending on marketing after having developed a green field market just speaks to their competitive moat. They produce a high quality product at reasonable prices, if anything there isn&#x27;t room to compete if not on marketing.
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Ndymiumalmost 4 years ago
Interestingly, the Huy Fong version of sriracha is no longer available in Finland due to it containing certain sulfites that are not allowed in spice sauces.[1] There are several competing sauces available, though. I remember wondering why it had disappeared from the shelves and only finding this one news article about it.<p>[1] <a href="https:&#x2F;&#x2F;yle.fi&#x2F;uutiset&#x2F;3-11251204" rel="nofollow">https:&#x2F;&#x2F;yle.fi&#x2F;uutiset&#x2F;3-11251204</a> (in Finnish)
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bhyalmost 4 years ago
This reminds me a Chinese chili sauce brand called Lao Gan Ma. [1] The founder is a woman, who started the business as a road side shop selling hand made chili sauce. Now it sales more than half a billion dollars per year.<p>They do not run advertisement too. The founder also insisted on some distinguished principles such as not taking any debt, not own supplier money, and not getting listed in stock market.<p>The sauce is often named as a necessity for Chinese studying or working aboard. You can simply mix it with rice or noddles and have a delicious meal.<p>If you like spicy Chinese food, you should give it a try.<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Lao_Gan_Ma" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Lao_Gan_Ma</a>
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LordAtlasalmost 4 years ago
And despite it not tasting like the original Thai Sriracha sauce.<p>Edit: the Thai version is thinner, tangier and a toucher sweeter, and made from spur chillies, not jalapeños. [1] [2] [3]<p>[1] <a href="https:&#x2F;&#x2F;shesimmers.com&#x2F;2010&#x2F;03&#x2F;homemade-sriracha-how-to-make-authentic.html" rel="nofollow">https:&#x2F;&#x2F;shesimmers.com&#x2F;2010&#x2F;03&#x2F;homemade-sriracha-how-to-make...</a><p>[2] <a href="https:&#x2F;&#x2F;www.npr.org&#x2F;sections&#x2F;thesalt&#x2F;2019&#x2F;01&#x2F;16&#x2F;681944292&#x2F;in-home-of-original-sriracha-sauce-thais-say-rooster-brand-is-nothing-to-crow-ab" rel="nofollow">https:&#x2F;&#x2F;www.npr.org&#x2F;sections&#x2F;thesalt&#x2F;2019&#x2F;01&#x2F;16&#x2F;681944292&#x2F;in...</a><p>[3] <a href="https:&#x2F;&#x2F;www.thrillist.com&#x2F;eat&#x2F;nation&#x2F;what-is-sriracha-sauce" rel="nofollow">https:&#x2F;&#x2F;www.thrillist.com&#x2F;eat&#x2F;nation&#x2F;what-is-sriracha-sauce</a><p>Not saying the Tran sauce is bad; just different.
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CalRobertalmost 4 years ago
Tragically, I stopped being able to get this sauce a couple years ago when the EU blocked imports due to one of the ingredients (I&#x27;m struggling to find a source atm though).<p>It was magic! It made Irish cuisine bearable.<p>The alternatives - Flying Goose, etc. are oversweet, underspiced, and dreadful.
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Tade0almost 4 years ago
I first heard about Sriracha years ago through Matthew Inman, a.k.a. The Oatmeal. Then Exploding Kittens happened and while (to my knowledge) it doesn&#x27;t feature the condiment, I&#x27;m sure many people checked out the rest of the artist&#x27;s work.<p>Now that Sriracha made its way to Poland I finally managed to get a taste.<p>It&#x27;s spicy enough to not be offensive to the average consumer, but I think The Oatmeal oversold it on its palate-burning capabilities.
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gbtwalmost 4 years ago
I wish they used a more hygienic bottle, the thing always leaks its disgusting.
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watertomalmost 4 years ago
Of course it’s impossible to know what their sales would look like if they had a sales team, and tons of money spent on ads. 2X, 5X, 10X, 20X?<p>As long as the founders and investors, are happy with their current sales numbers.
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na85almost 4 years ago
Proof that, despite what certain well-known HN users will so vociferously swear, advertising is not essential to the modern economy.
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turkeywelderalmost 4 years ago
If anyone&#x27;s in the sauce shipping game, try and get the Huy Fong one distributed in the UK. The market here is dominated by &quot;flying goose&quot; sriracha which is good, but not the same as the Huy Fong and there&#x27;s a fair market for it here I think.
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mft_almost 4 years ago
Thought experiment: what sales level might it have hit with a sales team and a marketing budget?
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diplodocusauralmost 4 years ago
Let&#x27;s not ignore the addictive potential<p><a href="https:&#x2F;&#x2F;helix.northwestern.edu&#x2F;blog&#x2F;2014&#x2F;07&#x2F;your-brain-capsaicin" rel="nofollow">https:&#x2F;&#x2F;helix.northwestern.edu&#x2F;blog&#x2F;2014&#x2F;07&#x2F;your-brain-capsa...</a><p>Not sure how well established the research on it is.<p>And there&#x27;s also sugar.
forgingaheadalmost 4 years ago
&quot;No sales team&quot; is a ridiculous summary. The full quote:<p>&quot;No sales team (Tran has mostly maintained the same 10 distributors and wholesale pricing from the 80s)&quot;<p>&quot;10 distributors&quot; is the sales team. Just because the distributors (who are large and who have probably hundreds if not thousands of their own sales staff) are doing the sales doesn&#x27;t mean there isn&#x27;t the process of a human being either calling or visiting stores to get them to buy the product. In other words, sales.<p>Getting a product to market is hard, and a large part of that difficulty is DISTRIBUTION. If a company can find some good partners like distributors to handle that, good for them, but nobody can make any amount of meaningful revenue without sales, despite fake exhortations to the contrary.
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ConcernedCoderalmost 4 years ago
The best part for me, is that since introducing Sriracha into my weekly ( if not daily ) diet, my acid reflux has dropped to zero...? unexplained benefit?
verytrivialalmost 4 years ago
I am a hot sauce tragic with more than a dozen bottles of various concoctions at my disposal. But confess to putting Sriracha on at least half of the things I think need some pep. All hail Sriracha!<p>(My second place is Blair&#x27;s Ultra Death which is amazing. I dole it out in pea-sized portion. I bought that bottle in .. oh my God ... 2014!!! Don&#x27;t tell my mom.)
taf2almost 4 years ago
I realize they may not advertise but they also sell through resellers... who at least from my google searching [1] do appear to advertise this product (delicious as it is) very heavily...<p>[1] <a href="https:&#x2F;&#x2F;www.google.com&#x2F;search?q=sriracha" rel="nofollow">https:&#x2F;&#x2F;www.google.com&#x2F;search?q=sriracha</a>
chrisweeklyalmost 4 years ago
I was already a daily consumer of Sriracha before I saw the awesome 33m documentary film. Brand &quot;loyalty&quot; is, I think, the operative term.<p><a href="https:&#x2F;&#x2F;vimeo.com&#x2F;ondemand&#x2F;sriracha#_=_" rel="nofollow">https:&#x2F;&#x2F;vimeo.com&#x2F;ondemand&#x2F;sriracha#_=_</a>
mandeepjalmost 4 years ago
No need to invent an electric car or go to space. Just a sauce can also be a MM business.
varispeedalmost 4 years ago
I wonder if a company that does not have such &quot;overheads&quot; like sales team, do pay floor employees significantly more than other companies and therefore it ends up getting more quality work done?
johnwheeleralmost 4 years ago
Talk about a wide moat! When you can forego trademarks and marketing, completely ignore the competition and still pull out a 150M and grow, you’ve got one hell of a business.
lifeisstillgoodalmost 4 years ago
&gt;&gt;&gt; He filled recycled baby jars and sold product out of a Blue Chevy Van, making $2.3k the first month.<p>Wow. In 1978 or so. That&#x27;s around 10K first month in todays money.
peter_d_shermanalmost 4 years ago
<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Sriracha_sauce_(Huy_Fong_Foods)" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Sriracha_sauce_(Huy_Fong_Foods...</a><p>&gt;&quot;History<p>David Tran began making chili sauces in 1975 in his native Vietnam, where his brother grew chili peppers on a farm north of Saigon.[5] In 1978, the new Communist Vietnamese government began to crack down on ethnic Chinese in south Vietnam. Tran and three thousand other refugees crowded onto the Taiwanese freighter Huey Fong, heading for Hong Kong. After a month-long standoff with the British authorities, its passengers disembarked on January 19, 1979.[16]<p>Tran was granted asylum in the United States. He started Huy Fong Foods in 1980, naming the company after the refugee ship that brought him out of Vietnam.<p><i>The sauce was initially supplied to Asian restaurants near his base in Chinatown, Los Angeles,[3] but sales grew steadily by word of mouth.</i><p>In December 2009, Bon Appétit magazine named the sauce Ingredient of the Year for 2010.[17][18]<p><i>In 2012, over 20 million bottles were sold.[3]</i><p><i>Huy Fong Foods says demand has outpaced supply since the company started making the sauce.</i><p><i>The company does not advertise because advertising would widen that gap.</i><p>Huy Fong has boosted production since 2013.[19]<p>Sriracha sauce has grown from a cult taste to one of the food industry&#x27;s most popular condiments. It infuses burgers, sushi, snacks, candy, beverages, and even health products. Tran said he was dissuaded from securing a trademark on the word sriracha since it is difficult to obtain one named after a real-life location. This has allowed others to develop their own versions, using the name. Some of the biggest corporations in the business, such as Heinz, Starbucks, Frito-Lay, Applebee&#x27;s, P.F. Chang&#x27;s, Pizza Hut, Subway, and Jack in the Box use the name without licensing it.[8][20] In 2016, Lexus partnered with Huy Fong Foods to build a single promotional Sriracha IS sport sedan.[21]&quot;
malkiaalmost 4 years ago
Would Geico be the opposite of all that? (E.g. not sure how many people actually get insured with Geico, but certainly most entertaining ads ever)
blobbersalmost 4 years ago
Product trumps marketing.<p>Justice in the hot sauce industry!
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timdaubalmost 4 years ago
Oh man. I&#x27;m so passionate about also building a product that is so good, they can&#x27;t ignore you.
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martyvisalmost 4 years ago
No one has seemed to mention they were nearly shutdown in 2013 <a href="https:&#x2F;&#x2F;www.npr.org&#x2F;sections&#x2F;codeswitch&#x2F;2014&#x2F;02&#x2F;27&#x2F;283307892&#x2F;sriracha-maker-given-more-time-to-contain-spicy-fumes" rel="nofollow">https:&#x2F;&#x2F;www.npr.org&#x2F;sections&#x2F;codeswitch&#x2F;2014&#x2F;02&#x2F;27&#x2F;283307892...</a>
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foolinaroundalmost 4 years ago
the insight i was able to take away from this is to consider the competitors as &#x27;free advertising&#x27; for the product.<p>I guess this works as long as one&#x27;s brand is acknowledged as the de-facto product.
hackermailmanalmost 4 years ago
No ad spend but I see Sriracha shirts around often
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ChrisArchitectalmost 4 years ago
not news. Stringing a bunch of content together from news posts from 2019 or older, like 2017 etc. (which have already been on here)
dancemethisalmost 4 years ago
All thanks to Filthy Frank.
midjjialmost 4 years ago
Well its just tasty...
mattwadalmost 4 years ago
It&#x27;s great on Asian cuisine, but I can&#x27;t stand when I ask for hot sauce at a Mexican restaurant and they come out with this Asian-style sauce. It&#x27;s not spicy at all, rather sweet.
cblconfederatealmost 4 years ago
Just imagine if they had spent in ads
dyejealmost 4 years ago
I like the sauce.
failwhalesharkalmost 4 years ago
Misleading title.<p>The best consumer products sell themselves with network effects of word-of-mouth. It can be very slow or very fast.<p>If you wanted to launch a new sauce, I would give difficult-to-open-completely bottles to restaurants in major cities and say &quot;We&#x27;re trialing a new sauce that&#x27;s ready for market. And we&#x27;d like to trial it exclusively at your [appropriately trendy for demographic] restaurant in XYZ, WQ. Can we ship it to the restaurant&#x27;s address?&quot;
newguy886almost 4 years ago
This is exactly the reason why I buy only his sirracha source. This guy got balls.
freddie_mercuryalmost 4 years ago
I live in SE Asia and I always have to roll my eyes when Americans ask for &quot;real&quot; sriracha. As if it were invented in the 1970s in California and the 100 year old Thai brand on the table is the cheap knock off of American culinary genius....
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confiqalmost 4 years ago
wait... why nobody is talking about rick &amp; morty TV show? Everyone should talking about it!
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plank_timealmost 4 years ago
That’s if you’re happy with only 150M&#x2F;yr. Thats not going to make a regular VC satisfied.
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