David Tran prefers to steer away from the spotlight. The CEO of Huy Fong Foods, makers of the popular Sriracha hot sauce with the green cap, was interviewed by Quartz recently and only after he began accepting interviews of late. While it proved difficult to pull answers from him, it became clear why Tran was never quick to change his mind about the spotlight, or anything for that matter. For over 30 years, he stuck with his entrepreneurial ways and they have worked. Last year, the company sold over $60 million worth of hot sauce – only hot sauce.
Tran’s journey began in 1980 when he first landed in Los Angeles from Vietnam and, along with a community of South Asians, was unable to find a hot sauce that fit the palate. Without a job either, Tran decided to create his own version of a hot sauce. The result was Sriracha hot sauce, named after the Thai city Si Racha where the sauce originated.
Sriracha hot sauce is typically eaten together with pho – something Tran does almost exclusively – but his sauce is so admired that there are recipe books dedicated to unconventional uses of the product. In fact, there are even t-shirts, socks, and baby gear to honour the sauce.
Tran never thought of starting a business at all let alone one that is so revered. Quartz describes him as quite laid-back and atypical. He doesn’t know exactly where his hot sauce is being sold having handed off the operations to ten distributors, shuns publicity, and could care less about profits. His main motivation was to fill a hot sauce gap – not unlike social entrepreneurs who choose to fill gaps in areas such as education or healthcare left by governments, NGOs, and the private sector. Tran, therefore, offers much that social entrepreneurs can learn from.
Make passion the backbone
The underlying mission for Huy Fong Foods is to “make enough fresh chili sauce so that everyone who wants Huy Fong can have it. Nothing more.” Tran makes it clear that his dream is to give people the opportunity to buy fresh hot sauce – a hot sauce worthy of their pho – much like social entrepreneurs who dream to give people the opportunity to buy sanitary napkins or use toilets. Tran pursues that one passion, and nothing more.
Profit with radical affordability
While food prices have gone up since 1980, Tran has never raised the wholesale price at which he sells Sriracha, yet remains profitable. He told the Los Angeles Times earlier this year that his one guiding business principle was to “make a rich man’s sauce at a poor man’s price.” While the wholesale price remains undisclosed, at retail a 28-ounce bottle costs approximately $4. It’s also known that their current factory produces 3,000 bottles every hour, 24 hours a day and six days a week.
Focus on quality
Tran is stubborn about quality. His Sriracha is made from fresh chilies whereas many commercially distributed hot sauces are made from dried chilies, which are easier to handle at scale. Using fresh chilies, his factory needs to be located close to the farm because they need to be processed within a day of being picked. Making matters more complicated, the harvest season for fresh chilies lasts only ten weeks and provides for the company’s yearlong supply of hot sauce. Chilies are also picky about where they grow. Tran explains that land once used for oranges, for example, isn’t fit for growing chilies. But with quality as a main priority, Tran doesn’t mind that the company’s growth is limited to the amount of chilies they can harvest.
Quality helps in other ways. Since the company’s inception, it hasn’t hired a single salesperson nor spent a single cent on advertising. Their sales are organic, relying upon word of mouth. As a matter of fact, Trans says that if he begins to advertise it would only cause a shortage in supply.
Keep things simple
From their plain packaging – a clear bottle with a green cap – to their unfurnished website and lack of social media presence, the folks at Huy Fong Foods have taken a bare minimum approach to running the business. Tran also started out with the bare necessities, making his sauce by hand, bottling it, and then delivering it to his customers in a van.
Stay true to your mission
Tran is no stranger to investors approaching him with piles of cash to buy the company, so he doesn’t want to let anyone know about the company’s growth in hopes of avoiding these conversations. They would approach his doorstep with business pitches and growth plans – neither of which he cared about and has turned them all away. He says, “People who come here are never interested in the product, only in the profits.” For Tran, it was always about the hot sauce.