Some like it hot — or even hotter
Sauce industry sets tongues ablaze,
“There is a pleasure factor that comes from bolder, spicier flavors.” Orlando-based global restaurant consultant Aaron Allen
They beg for water and scream for mercy. Faces glow red and tears well from puffy eyes. Then they want more. When it comes to popularity, hot sauce couldn’t be hotter.
When McIlhenny in Avery Island, La., introduced Scorpion, a version of its famous Tabasco sauce, that is 20 times hotter than the original this month, it sold out within a few hours. Demand was so great that the sauce is back ordered to November.
On Monday, McDonald’s enters the fray when it debuts a Sriracha quarter-pound hamburger, part of its Signature Crafted Recipes sandwich menu.
Sriracha, made famous in the U.S. by Hoy Fong Foods in Irwindale, Calif., with its red bottles and rooster logo, can now be found in everything from Heinz Ketchup to jelly beans.
Hot sauce sales are expected to hit $1.37 billion this year in this U.S. this year, up 4.5% from $1.31 billion in 2016, according to the market research firm IBISWorld. The firm predicts they are headed to a $1.65 billion market in the next five years.
“The popularity has just begun, and I don’t see it slowing down anytime soon,” said IBISWorld analyst Chrystalleni Stivaros. “Incomes are increasing. People are enjoying going out more. ... It’ll raise revenues for the industry. Hot sauce is more expensive than simple sauce, so people are able to trade up to premium seasonings.”
Besides Tabasco and Sriracha, other big names in hot sauce include Texas Pete, popular in the Southeast; Frank’s RedHot, a treasure in the Northeast; and Louisiana Hot Sauce, beloved hundreds of miles north in Chicago.
The regionalization of hot sauce preferences means there’s still plenty of room for small players in a still fairly fragmented market. McIlhenny has a 17.1% market share; Reckitt Benckiser, maker of Frank’s RedHot, has 11.3%; and Huy Fong Foods has 8%, according to IBISWorld.
Food giants can be outflanked. Spicemaker McCormick announced earlier this month it will pay $4.2 billion for Reckitt Benckiser.
But Conagra Brands, Smucker, Kraft Heinz and Hormel are largely absent from the category, said Credit Suisse research analyst Robert Moskow in a report earlier this month.
He wrote that some companies are reluctant to leave their comfort zones — a stance that will ultimately hurt them.
“We view what’s happening in hot sauce as another example of the achingly slow reaction time and risk aversion that has prevented Big Food companies from staying ahead of the increasingly dynamic changes in the industry,” he wrote.
Growing demand for hot sauce stems is due to vibrant and growing immigrant communities, which knew certain sauces in their native countries, and Americans’ willingness to try new foods — or spice up old ones.
It helps that Mexican and Asian cuisines — known for their bold, often hot, tastes — are surging in popularity.
A love of hot sauce spans generations. Millennials love new experiences, making hot sauce more on-trend. A new or unusual condiment can sass up an otherwise ordinary dish.
At the other end of the age spectrum, people’s taste buds aren’t as sensitive to spicy heat as the grow older. Graying Baby Boomers can rev up dulled senses of taste with an atomic blast.
Like many other hot-sauce fans, Mayra Palacios puts the spicy condiment on eggs and fish. When she’s feeling especially brazen, she’ll add it to watermelon.
“I like to have the hot sensation on my tongue,” said the 40year-old Houston senior caregiver, who even travels with a bottle in her luggage. “People like the heat on their food. They see it at restaurants on the table, so now everyone is asking for it. I see it everywhere now.”
Tony Simmons, McIlhenny CEO and great-great-grandson of Tabasco creator Edmund McIlhenny, knows his share of customers like Palacios.
“People are becoming more experiential with their food,” Simmons said. “They’re more willing to try new flavors and new spices. The use of condiments and flavor enhancers to make their food taste better is what has driven the whole hot sauce industry to be one of the very few parts of the consumer packaged goods industry that has seen some reasonable growth.”
Until 1994, when McIlhenny sold only original Tabasco sauce, brand extensions have included a variety of heats including the latest, Scorpion, and added flavorings like jalapeno, chipotle, habanero, Sriracha and garlic-flavored cayenne.
“We‘ll be 150 years old next year,” said Simmons about the privately held company. “We’ve had a steady growth pattern through the years. ... We ship to about 187 countries and bottles in 22 languages and dialects.
“The conundrum for Big Food companies is that all of their scale and competitive advantages are geared toward producing overengineered processed foods at a low cost and quickly getting them on the shelves of slowly receding traditional brick-and-mortar stores.”
The staying power of the hotsauce market reflects how it has migrated from supermarkets to restaurants and how it continues to show up in them, because hot sauce can be incorporated into new recipes. Plus, hot sauces keep getting hotter.
“The magnitude seems to be increasing. It’s almost like shock value,” said Orlando-based global restaurant consultant Aaron Allen. “There is a pleasure factor that comes from bolder, spicier flavors.”