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Tabasco Company Introduces Its Own Sriracha

May 23, 2014

The problem with creating an incredibly popular product is that your success will eventually attract competitors. And sometimes those competitors will pounce precisely when you’re at your weakest.

Such is the case with Sriracha hot sauce maker Huy Fong Foods, which is locked in a battle with local officials in Irwindale, California over noxious chili odors allegedly emanating from its new factory there. There’s a lawsuit in the courts and even the possibility the factory could be declared a public nuisance, which could force it to shut down or relocate. It's been a dark few months for a company that started as a humble small business in 1980 before growing into a food manufacturing powerhouse which, according to owner David Tran, generated $80 million in revenue in 2013.

Amidst the turmoil in Irwindale and the specter of Sriracha sauce disappearing from supermarket shelves, the company behind the ubiquitous Tabasco sauce has unveiled its own Sriracha Thai chili sauce that’s now for sale on the company’s website. Businessweek hinted this might happen in a story last year; New York magazine confirms the news today.

The move by the Louisiana-based McIlhenny Co. should come as no surprise given the explosive popularity of Huy Fong Foods' Sriracha, which has spawned a cottage industry of "Rooster Sauce"-related offshoots ranging from a cookbook to a food festival to iPhone cases. While Tran legally protected the Rooster Sauce look -- with its clear bottle, white print and distinctive green top -- he couldn't trademark the Sriracha name because it’s derived from a city in Thailand, according to the L.A. Times, making it possible for competitors like McIlhenny to pounce.

What’s doubly troubling for Tran is that he opened his new Irwindale factory precisely because demand for his Sriracha sauce had increased so dramatically. But that decision has only invited more business complications and an opening for others to capture market share.

“They know there’s going to be a sustainable demand and they’re gearing up for it, so they become the known brand,” says Darren Tristano, a food industry consultant with the firm Technomic.

This is not the first time a competitor has treated to compete with Huy Fong Foods. Trader Joe’s also sells a Sriracha sauce, and several other food brands have introduced Sriracha-flavored products, including Subway.

But the threat from McIlhenny seems most potent: Tabasco, which is found on restaurant tables across the country, is the number-one selling hot sauce on the American market.

What may determine the final winner in the court of consumer opinion is price. A 17-ounce bottle of Sriracha costs around $3-$4 in most supermarket, about half the cost of McIlhenny’s product. But the competition is just beginning, and there’s no guarantee Huy Fong Foods will win out in the end.

“They have a following and know it's based on the logo and the shape of the bottle,” says Tristano. “They have strength and the opportunity to grow, but it doesn’t mean a competitor won’t come in and try to do a lower price point.”

Photos: An Inside Look at a Sriracha Factory

Chilies are ground in a mixing machine.
Jalapeno peppers, grown in nearby Ventura County, are crushed inside the Huy Fong Foods factory in Irwindale, Calif.Peter Bohler for TIME
Chilies are ground in a mixing machine.
Lids for Sriracha bottles flow into a large container.
The bottles for Sriracha are made and printed on site. Here, new bottles come off the conveyer belt.
A forklift moves barrels of chili around the warehouse where they are stored until needed for processing into Sriracha, Chili Garlic and Sambal Olek—ground chilis with no added ingredients.
Uncapped barrels of chili are pumped into the mixing room.
Sugar and powdered garlic are added to the mixture, which is ground again into Sriracha.
Bottles of Sriracha being filled. When CEO and founder David Tran started making chili sauce in Vietnam, he and his family hand-filled bottles with spoons.
Filled and capped bottles of Sriracha come off the assembly line and are organized for boxing.
A machine boxes Sriracha for shipping.
A worker adds steel supports to a pallet of barrels. The supports allow Huy Fong to stack the barrels on top of each other without the weight of the chili crushing the barrels.
Jalapeno peppers, grown in nearby Ventura County, are crushed inside the Huy Fong Foods factory in Irwindale, Calif.
Peter Bohler for TIME
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