Huy Fong Foods and the Case of the Mysterious Vanishing Sriracha Sauce

For thousands of years, human beings have enjoyed the complex pleasure that is spicy food. Mesoamericans used the chili pepper for its medicinal and anti-inflammatory properties long before modern North Americans realized, “Hey, this hurts in a good way!”

Given that spicy food can release endorphins and dopamine in the brain, similar to that of a runner’s high, it’s no surprise that we keep craving more.

A survey by Instacart showed that 74% of Americans eat hot sauce with their food, and that the number of hot sauce purchases increased by 11.7% from 2020 to 2021. From that same survey, plenty of the most popular American and Mexican-American combos of chili pepper and vinegar made their appearances on the list but one sauce stood out: Huy Fong Foods’ Sriracha Sauce. Our favorite green-nozzled bottle became 2021’s most popular brand of hot sauce in the United States.

A Good Kind of Burn: The Story of Sriracha

Sriracha, a hot sauce of Asian origin, has made its way into pantries and restaurants all over the country, crossing cultural boundaries and introducing many non-Asian consumers to the richness of Asian cuisines. The sauce’s popularity has somewhat affirmed the “melting pot” ideology that many Americans have been fed: that people can all come together regardless of their cultural backgrounds. Huy Fong Foods’ Sriracha has become so significant to the modern American’s diet, being used in all kinds of dishes from spicy pulled pork sandwiches to sweet heat brownies, that not even a supply shortage could deter people from their loyalty to the green nozzle. As the company faced supply chain issues, bottles were being sold for as much as $70! Americans are desperate for their familiar sweet and spicy fix, and they believe only Huy Fong Foods can supply it.

But where could this magical sauce have come from?

In order to truly understand the story of Sriracha, we must travel back to 1880s Southern China. During this time, Cantonese cuisine was often enjoyed with a garlic chili sauce. Sound familiar? The sauce was then modified, produced, and sold by a Chinese sauce company called Koon Yick Wah Kee starting in 1891. Around the same time period, famine brought waves of southern Chinese migrants to Thailand. Several Chinese-Thai communities began to be established, one of which ended up in… Si Racha, Thailand. After a while, a Thai version of the delicious sauce called “Sriraja Panich” was created and produced by a woman named Thanom Chakkapak. This sauce is said to have been most popular in Chinese immigrant communities across Southeast Asia, particularly in Vietnam and Thailand, and was the best-selling hot sauce in Vietnam around the same time that Huy Fong Foods’ Chinese Vietnamese founder David Tran created his first chili sauce. Tran himself has spoken about the multicultural community that enjoys his familiar sauce. He explains in an interview that he started making the sauce because American hot sauces weren’t spicy enough compared to those of Vietnam. Knowing that the sauce wasn’t only enjoyed by people of Vietnamese culture, he made sure the bottle had multiple languages to “help people from different cultural backgrounds understand [their] products.”

Given Sriracha sauce’s long history and enjoyment among multiple cultures for over a century, it seems even less surprising that many Americans have taken such a liking to it. When we factor in the heartwarming and inspiring success story of David Tran, who came to the United States as a refugee and created a billion dollar company, and the consistently flavorful taste of his product, it would seem that Sriracha is both an international sensation and an “American Dream” success story.

So what’s the catch?

Many of you may have already noticed that Huy Fong Foods has recently experienced major setbacks in the form of lawsuits and shortages. So how did such a sweet and spicy success story turn sour?

The problem starts with a deal gone bad. While we have learned that hot sauces in Southeast Asian cuisine are made with chili peppers, in the United States, the most accessible type of chili pepper is the jalapeño. For 28 years, California-based Huy Fong Foods consistently partnered with the same California farm, Underwood Ranches, to supply all of the jalapeños they needed for production of their sauce. By 2015, Underwood Ranches supplied more than 100 million pounds of peppers per year. Unfortunately, this relationship began to fall apart for several reasons. Sometime between 2014 and 2016, Tran had formed a company called “Chilico LLC”, whose purpose was sourcing more peppers. He then gave his sister-in-law ownership. He even attempted to offer a job under Chilico to Underwood Ranches’ COO, Jim Roberts, who repeatedly declined. Tran then began to contract peppers for Huy Fong Foods using Chilico, and implored Underwood Ranches and its owner Craig Underwood to do the same. Tran, his sister-in-law, and Underwood created a contract for the upcoming season to grow even more peppers, and Tran agreed to fund the increased supply saying “you grow it, I’ll sell it.” Not only did Tran not follow through on supplying these funds after the contract was established, but he pressured Underwood to produce peppers at an even lower price in order to compete with other cheaper alternatives. Due to the impossibility of the request, the lack of funds to grow the peppers, and the betrayal of trust, Underwood could not fulfill Tran’s order outside of what they had agreed upon. Upon this realization, Huy Fong Foods began to work with other pepper suppliers instead of following through on their contract with Underwood Ranches. This led to Underwood Ranches losing millions of dollars, having no crops to plant on the land that they had been pressured to acquire and dedicate solely to Huy Fong Foods’ pepper needs. Huy Fong Foods proceeded to open a lawsuit against Underwood, seeking a refund of payments that they had made to Underwood Ranches. Underwood then opened a counter-suit against Huy Fong Foods for breach of contract and fraud. The jury sided with Underwood, and the cordial relationship between the local farmer and the ever-growing sauce company came to an end.

Since then, Huy Fong Foods has made an attempt to source their jalapeños from multiple different farms, many of which are in Mexico. Due to drought in Central America and increased distance from Huy Fong Foods’ production site in Irwindale, California, the company has had multiple issues stabilizing their pepper supply. Other makers of Sriracha chili sauces haven’t reported as much difficulty with their supply, though few American brands have had the level of success (and the demand that comes with it) that Huy Fong Foods has.

The bad news: Huy Fong Foods is continuing to struggle with their supply issues, so their American-favored version of Sriracha may continue to have shortages.

The good news: There are many other Sriracha brands that are just as tried and true in other parts of the world. In places where Sriracha was born and raised, such as Vietnam, popular sauces Chin-Su and Cholimex reign supreme. Because of the popularity of chili-garlic sauces in Asia and beyond, there are plenty of other options to choose from.

Editor's Note: This article was updated to provide further details of the lawsuit between Huy Fong Foods and Underwood Ranches and to correct the fact that Underwood Ranches had provided peppers to Huy Fong Foods for 28 years, not 27.