Tag Archives: Hot Sauce Shortage

The Sriracha Story … How Will It End?

The timing for Griffin Hammond’s documentary on Sriracha sauce couldn’t be better. More on that in a bit. This holiday season, I highly recommend this 33 minute documentary, which you can buy for $5 on his site. Put it on a flash drive, tape it to a Sriracha bottle, and give it to a loved one as a stocking stuffer.

My only complaint is that I wish it were longer and included the current fight over the ability of Huy Fong to sell its products.

Fans of the sauce will especially love the film, and those who can’t stand anything spicy will still find the story of it fascinating.

Hammond tells the story of one of America’s favorite hot sauces with a cult-like following from a societal perspective, from that of David Tran, the Huy Fong company’s founder, and from a historical perspective about the sauce’s origins in Thailand. Now, Sriracha isn’t my favorite hot sauce (it’s hard to pick one), but it was one I stupidly avoided at burger joints. I’m happy to admit I am wrong, because this sauce is wonderful.

Just the “how it’s all made” portion of the documentary, which is well-filmed and produced, would be enough to interest me. Hammond bills it as “The origin story of an iconic hot sauce, finally revealed.” He’s not lying.

Tran, the founder of the most known version of the Sriracha-type chili sauce (with a green cap and a rooster on it), came to the U.S. by way of Hong Kong after the fall of Saigon. As an ethnic Chinese man, he wasn’t really welcome in Vietnam after it went communist.

hf2Tran got out of Vietnam on a boat. When the British told the boat to turn back, it stayed there for a month. The British relented, and Tran made his way to America as a refugee.

In 1980, he founded his company, selling his version of the Sriracha sauce in the Chinatown neighborhood in LA to local restaurants. The company’s name?  Huy Fong — the name of the ship that saved him from communism and a society that didn’t welcome him.

He has never marketed his sauce, though fans appear eager to do so for him — including the webcomic The OatmealTran seems more interested in bringing his product to the masses.

Much success has come to David Tran and his chili sauce factory. His former factory was once a Wham-o factory that made frisbees and hula-hoops, but demand grew too much. So, in 2010, he arranged for a bigger factory — a few times the size of his old one — in nearby Irwindale. In 2012, he sold 20 million bottles of the stuff.

In the making of chili, during the fall harvest, the peppers need to be pureed and mixed with other inputs at the most ripe point, when they are red. So, for much of the ripe-times for these chilis, the Huy Fong plant excretes a delicious chili aroma. Then it’s aged and stored before it is bottled and sent out.

Irwindale’s citizens, fewer than 30 of the city’s 1,400 residents– including a city councilman’s son — complained about the chili odor. And because of this, the city sued, saying the smell of chili was a “public nuisance.” This, after Tran and Huy Fong installed filters not once, but twice in response to complaints. The South Coast Air Quality Management District visited numerous times, but didn’t cite Huy Fong for violations.

Tran won the first round, but on appeal, the city won — even though the judge said there was a “lack of credible evidence” tying health problems to the factory’s smell — on the public nuisance complaint. For now, it doesn’t matter that much until next fall, since the harvest is over. The fight, though, isn’t.

According to the LA Times, some of the closest neighbors to the plant, however, fail to see what the problem is:

Sal Hernandez, a 75-year-old former Irwindale councilman who lives on Azusa Canyon Road, just a few houses from the Huy Fong plant, said he has never noticed a smell. He said he was surprised the city went after the maker of Sriracha hot sauce so quickly and aggressively.

“It hasn’t bothered me yet. I haven’t had any effects from it, and I’m right next door to it,” Hernandez said.

A former reserve police officer who has lived in the city for more than 30 years, Hernandez said few people go before the council to complain about the smell from other factories in town – like the huge MillerCoors Brewery or a dog food manufacturer on Arrow Highway.

“Things we should go to court for we don’t, and for this thing, we’re taking [the Sriracha company] to court,” he said. “I’m surprised. They were praising this thing before they even came in. Everyone was praising it.”

Praising it, indeed. The city even went out of its way to attract those Huy Fong jobs, offering a really good loan for a small town that, when you think about it, is kind of nuts.

The LA Times reports:

Huy Fong Foods decided to locate its factory in Irwindale three years ago when the city offered a loan with “irresistible” terms: pay only interest for 10 years, with a balloon payment at the end.

Huy Fong took the loan and contributed $250,000 a year to the city of Irwindale each year as part of the deal, Tran said. The company then built a $40-million factory that at full capacity could generate about $300 million a year in sales, according to Tran’s statements.

But after complaints about the smell began last year, Tran said he began to get an “odd feeling” about the city’s behavior. In response, the company has taken out a loan with less favorable terms from East West Bank to pay off the city’s loan.

Could Irwindale be suffering from buyer’s remorse? Perhaps. The town with 1,400 people did offer to front a loan for Huy Fong similar to the interest only mortgages popular before the housing crash in exchange for jobs and commerce, which seems like a bad idea. Tran’s premonition led him to pay off the loan early, like some TARP recipients did in the wake of the financial crisis when the Treasury imposed special regulations on loan recipients.

Or is Irwindale angling for a settlement deal? Also possible.

The city could be taking action for all 20-some citizens who have a problem with the plant, though based on former councilman Hernandez’s comments, the city’s actions seem strange — like that of a spurned crazy ex-girlfriend.

One thing is for sure, taking loans from the government may save you money up front, but the special terms of the deal often appear after you’ve signed on the dotted line, as seems to be the case here.

Tran looks like he is taking this personally. He put up a big banner that reads “NO TEAR GAS MADE HERE” and hung it out in front of his factory. The sign gives the impression Tran plans to fight this in court, but the company is largely keeping quiet.

Los Angeles County, where Irwindale is located, has a higher than average unemployment rate — 9.5% as of October. Like the Dollar Shave Club commercial says, “I’m no Vanderbilt but this train makes hay” — Tran’s brought commerce to Irwindale, but do they really want this litigious NIMBY reputation? It doesn’t appear the city has put much thought to the trade offs such a lawsuit brings.

If Irwindale’s sudden and bizarre reversal weren’t enough for Huy Fong, the state of California has made matters worse.

According to a report by ABC News:

The Southern California-based maker of Sriracha has been told it can’t ship any more of its popular hot sauce to food distributors until next month because the state Department of Public Health is enforcing stricter guidelines that require a 30-day hold on the product.

Health department spokeswoman Anita Gore told The Associated Press on Wednesday that the 30-day hold is needed to “ensure an effective treatment of microorganisms present in the product.”

The move by the California Department of Health might be seen as suspicious by some, given the timing. But it appears that the regulation that went into effect wasn’t specifically targeted at Huy Fong.

LA Weekly reports that the 30-day requirement “has existed for years but that it was recently modified in a way that now applies specifically to Huy Fong’s hot sauces.” The Department of Health cited federal regulatory law as the justification for the change in their enforcement, despite the sauce being produced there for over 30 years. The regulations were changed in 2011, under the Obama administration, state that companies that deviate from the scheduled process for acidified food must “set aside that portion of the food involved for further evaluation as to any potential public health significance.”

California has stricter rules than the rest of the U.S. for guns, cars,  and apparently, hot sauce.

One wholesaler is very unhappy, telling ABC News that he’s already received 30 angry phone calls — more than the total number of complaints in Irwindale — about the problems it’s causing. Unfortunately for consumers, they don’t have a city to sue on their behalf, only David Tran, Huy Fong Foods and his legal team. The delays, the wholesaler says, could cost him $300,000 in lost business.

Other cities’ officials are trying to lure Tran and his company to relocate to their city. One such place is Philadelphia. While it’s unlikely Huy Fong — which only uses one chili supplier — would ship its chilis across the country in an expedited manner to make their product there, nearby Arizona and Nevada might be a better fit.

In the film, Tran tells us that if people no longer like his product, he’ll stop making it. His product’s popularity isn’t the problem at present — it’s California, and Californians. David Tran waited a month on a ship to escape Vietnam, so Irwindale should expect no lack of patience from him.

I doubt Tran will go full Atlas Shrugged and deny foodies, hipsters, and hot sauce fanatics his great product. But its fans should take notice to see what the NIMBY crowd and regulatory overreach is doing to one of their prize condiments. Don’t expect any hilarious criticisms of regulatory overreach by The Oatmeal.  Unless Tran wins in court, the price of Sriracha is set to rise, or the California label might be coming off the bottle.bsig