You MUST have an extreme sauce...

The Hot Pepper

The Hot Pepper

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If you are a hot sauce company, in my opinion, you MUST have an extreme sauce if you want to be talked about and frequented by chiliheads. This could be the key to your success. You may have some great flavorful, somewhat hot sauces, but chiliheads are likely to skip your product line entirely. Usually they will try the extreme sauce, and then look at what else you have to offer. If you are a small company that offers great flavorful sauces, and are wondering why they are not selling, try adding an extreme sauce, and let the chilihead community know about it. This is just my opinion! I am an observer, not a professional sauce maker.
 
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THP,

Good job on getting folks to really let their passions for this biz shine.


I agree with E.Z. doing more non fiery shows is the key you'll find a bigger market. When you do the fiery food show or the zesty food show you have to compete with 200 other sauce makers for the few buyers. After you have gotten Peppers and Hot Shots there is not much left.

As you all know if not well established folks will need to try your product before they buy. What we have done for years is give away tons of samples not really profitable. But still you get your products in front of people.

We here at Kato's is still trying and will continue to try and find that 1 product to put us ahead.
We thought we found it in our #1 seller Kato's Habanero Chocolate Bars but that is still a niche market. As consumers continue to see fiery products as a niche I think that will slow our growth as an industry. What needs to happen is find your niche and try and be on top.

Mick
Kato's
 
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Blue said:
www.bluesbbq.net[/url]
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Wow - answering that question would take two pages or more. I guess the best explanation is to say that I evolved into the international markets. In 1991 my entire inventor of syrup consisted of 1 pallet of a mixture of flavors (12) totalling 900 bottles. I was selling wholesale by the case, and on-line marketing was unheard of at the time. I launched national advertising in coffee journal, I picked up my first distributer in Spokane, the next one in Washington DC, and then a third one in North Pole Alaska (he is still buying from me because of our quality). That defined the domestic market book-ends pretty well. I began doing more coffee/espresso trade shows, then for the last ten years have won the Chef's of America (ATI) Gold Medal for Best of Show (no 2nd or 3rd place medal is awarded). I worked a piggy-back deal with a large espresso coffee roaster who sold into Taiwan, then picked-up a coffee importer there and structured a very commplicated, difficult agreement that allowed him to be competitive. That has taken the better part of 8 years to grow, but we are now the number one syrup in Taiwan. We even have McDonald's over there. My distributor is now moving into main-land China and beginning to open that market. I worked about the same plan with Greece where we are also number one. I sell in a dozen other nations from South Afrika to Indonesia to Europe as well. Through all this Stirling still remains the smallest of the five main coffee syrup brands - by design!

IF, I were younger and IF I decided to work that hard again to move the hot sauces, I would impliment the same basic approach. If it's not broken, don't fix it - right? As it is, I am playing off the huge Gold Medal win for Best of Show at the NW Restaurant Show, and piggy-backing off the distribution efforts of Stirling. It is a nice retirement busy-box project for me to play with. IF it explodes, Stirling will then take over and work the problem, and I will remain the icon-figure in the marketing program.

I could not hve done it (syrups or Hot Stuff) without the Gold Medal winning quality, however. It is the gas in the tank that make the vehicle run. Where runs to depends upon you as the driver.

Whew! Anybody still out there reading this? :shocked: - E.Z.
 
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E.Z. Earl said:
Whew! Anybody still out there reading this? :shocked: - E.Z.
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Yes. I find this to be very informative and interesting reading. Thank you for the time you've spent here answering questions and doling out some advice. And that goes for all the sauce makers on here who've managed to make it work for them. I read all the business posts here for just those aforementioned reasons.
 
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Sickmont said:
Yes. I find this to be very informative and interesting reading. Thank you for the time you've spent here answering questions and doling out some advice. And that goes for all the sauce makers on here who've managed to make it work for them. I read all the business posts here for just those aforementioned reasons.
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Your most welcome. You can thank THP for this, I think. He seems to run a BLOG site that has a tendency to accomodate more serious (somewhat longer) discussions among interested parties, as well as the fun & funny sound bites. The participants seem to be able to exchange opposing points of view without it beoming a heated arguement. I sort of picture THP with a striped shirt & whistle as he guides things along. Well done THP!

Any advice I can pass along to anyone who is interested is my pleasure. Just remember, my advice may be worth no more than what you paid for it! :shocked: I sure as hell have made as many errors in business as I have done things right. - E.Z.
 
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DEFCON Creator said:
Earl, you gonna come by the Fiery Foods show in Albuquerque in March, or do I have to wait until Montana to drink with you?
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Looks like the Kickin' Horse Saloon in Montana, Dude! Hope old Doc is alive and kickin' there too. - E.Z.
 
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I also think each company should have an extreme sauce. Blair's is known for his reserve and Jersey Deaths. But lots of people look to see what else he has and end up going to the 'Heat' or Original Death' for flavor. Dave is known for his Insanity Sauces, but I sell cases of his Ginger Peach.
And bottom line is this: Grocery store shelves are heavily stocked with $1.48 Steak Sauces, BBQ Sauces, And $.98 to $2.99 hot sauces, including Marie Sharp's.
The Extreme 'lines' create a 'name/gimmick/recognition factor. I loved Marco's Salsas and so did a ALL the tasters that sampled them, but they all went to the store to buy $2.00 salsas. I found that I don't have enough salesmanship to sell some items. The same people would buy a bottle of Final Answer for $30.00.
 
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tinner666 said:
I also think each company should have an extreme sauce. Blair's know for his reserve and Jersey Deaths. But lots of people look to see what else he has and end up going to the 'Heat' or Original Death' for flavor. Dave is known for his Insanity Sauces, but I sell cases of his Ginger Peach.
And bottom line is this: Grocery store shelves are heavily stocked with $1.48 Steak Sauces, BBQ Sauces, And $.98 to $2.99 hot sauces, including Marie Sharp's.
The Extreme 'lines' create a 'name/gimmick/recognition factor. I loved Marco's Salsas and so did a ALL the tasters that sampled them, but they all went to the store to buy $2.00 salsas. I found that I don't have enough salesmanship to sell some items. The same people would buy a bottle of Final Answer for $30.00.
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Anyone who thinks they can take on Kraft and their brands at their prices in the retail grocer market is simply cruisin'-for-a-bruisin' ! But that doesn't mean a maker has to jump to an extreme either. I carefully evaluated where the mainstream products fall out of bed on flavor and heat then moved my sauces into the next niche up from there. That is "extreme" compared to the average, but it keeps me within a solid 9-iron of a still very large consumer base. I view the market as a giant pyramid that is divided into several progressively smaller layers of consumers. The extreme "chili-philes" in the fiery food market make up the tip of the pyramid - about 7% of the total market. The huge lower 67% of the market is the domain of the giants. I am working to bracket that 26% remaining between the two extremes. Once I have achieved vertical penetration with my hottest (Blazin'-Hot Stuff) and middle of the road Smokin'-Hot Stuff, I will then initiate horizontal market penetration by sitting down on the giant's domain with my mildest (Spicy-Hot Stuff(TM)) for which I am already receiving requests. That shold give me ample market potential to make me :lol: all the way to the bank! - E.Z.
 
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my humble start

Hello THP blog
Thank you for providing such a serious and educational forum for mfgr's and chiliheads alike. We are small and not well known yet, but I'll throw in my two cents, from my perspective.
I have been making beef jerky for years, a true jerky addict. After a friends trip to Belize, and my introduction to Marie Sharps when he brought me bottles back, I started making habanero jerky. Untill then, I was a regular Franks / Tobasco guy. My first taste of Habanero and I was hooked.
It did not take long for me to run out of Maries, so I started to make our own habanero sauce, just for the jerky. Soon after, friends and co-workers encouraged me to start selling it. Instant hit. We were also asked to bottle the suace seperatly, and we started just filling any old empty bottle they would bring.
In Feb 04 I set up an ebay account and thought who would be crazy enough to buy hot sauce or jerky on Ebay? Tons of folks were ! 1200+ feedbacks later, it has become a business. This new year ( 2007) we will soon start copacking our jerky, as we want nothing to do with the USDA, too much $$$$ and too many headaches. Getting the recipe into a copackable product has taken time and effort, but were ready to go.
That brings us to topic on this thread.
Our customers are fiercly loyal, and word of mouth has us doing very well. The hot sauce has taken off and we have expanded our line dramatically. With a new website this last year, and minimal local advertising, I have hired our 1st full time employee, my son in law.
Now the EXTREME sauce thing.
I myself do not at all like extract sauces, in my opinion, the extract ruins any taste. We now make 2 versions of it due to market demand, but it is not a sauce I eat myself. However, because of customer demand, they are both steady, but not high volume sellers.
In my opinion, just a great Red Savina, such as Cape Fear, Fat Kids Extreme, Mild to Wild's Pure Arson, CaJohns Ace, and our own Red DITD ( Death in the Desert) is hot enough for the chilihead. Nothing can beat a great, fresh, Red Savina.
Another ( perhaps uneducated and greenhorn ) opinion is that I have seen Blairs prices level off and even drop as of late. Market saturation? I am far too inexperienced at the nuances of the hobby to coment, but I do watch ebay regularly. It is obvious to me things are changing.
In sumation, Hard core chiliheads go for the hottest you have, then word spreads, and you gain non heat seeker's as well. I am proof positive of a small mom & pop maker, that has ridin this trend to success. I have no expectations, but this is sure a fun ride to be on.
Ez Earl, TracyC, Defcon Creator, Marcos, you are all success stories, and I hope to join you all some day as a reconizable figure in this crazy industry. Jim Campbell told me long ago, get into this to make hot sauce, not to make money. I will let 3 years of sales that double each year guide me. 2007 looks to be fantastic. I wish everybody in the pepper business a banner year and heath, wealth and wisdom. Throw in a little burn as well.
Merry Christmas from SuperSpicy.com.
 
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Well said AJ, and thanks for the kudos. Last September, in my 24 drive-by to Zest Fest, Jim told me the same thing. Hot sauce is not an overnight success, and a vast majority of us in this business started with only an idea and a dream. Taking out our first business loan for a concept was quite an emotional thing. We had no industry experience, no contacts, no bank roll to use as a safety net, nothing. It was through sheer hard work (more of a passion), and a determination to keep going. I wish you the best of luck in your endeavor, and look forward to meeting up in NM.
 
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A.J. - Pleased to see you check in on this thread. It has been an interesting one so far. THP is to be commended for managing a BLOG that seems to serve as a venue that promotes a lively exchange of ideas and opinion - some diametrically opposed - while retaining the respect for the person holding opposing views.

It was fun to read your historical recap. Undoubtedly you have broken the eggs and are now well on your way to creating your own special omlette! I love being, and being around, entrepreneurs. They, in my opinion, are the most special of business types - persons who can take a blank pad and create an enterprise. I have found that most such creators (settle DEFCON!) are persons motivated by the project versus the amassing of wealth. If successful an entrpreneur will undoubtedly attract money, for that is an entrepreneurs scoreboard, but enevitably it is mostly about the success of the venture.

You are obviously well on your way in your own style. I would, however, offer one word of caution. Keep a close eye on the 50% growth rate. As your volume grows you may want to scale that back into the 20's. Remember the "Rule of 72" - anything that compoundss at 7.2% will double every 10 years. Thus, 14.4% = five years; 28.8% = 2.5 year; etc. That growth has to be funded and it can get hairy if it breaks through the ceiling of your "critical growth path".

Best of luck on your continueing success. If I can ever throw in my 2 cents worth on anything, please ask. As my Nancy likes to put it, "Everyone is entitled to E.Z.'s opinion!" :D -E.Z.
 
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Growth Rate

EZ,
Your advise is well understood. Please keep in mind however, for us, a doubling in sales means selling 2000 bottles in 2006 versus 1000 in 05, and 350 in 04. LOL, I saw in this post you sold how many pallets? I am but a small fish in a Great Lake.
:D
 
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Arizona Jack said:
EZ,
Your advise is well understood. Please keep in mind however, for us, a doubling in sales means selling 2000 bottles in 2006 versus 1000 in 05, and 350 in 04. LOL, I saw in this post you sold how many pallets? I am but a small fish in a Great Lake.
:D
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Right - but in 1991 I sold only 75 cases in my second month on the market with the syrups. The next few years I had to fund a 1,000% growth, then 550%, then 200%+, etc. I was in hock $424,000 before I turned the corner and began to run in the black! Today, as a multi-million dollar syrup company I still manage a very comfortable 5 to 15% growth rate. The stress of the excess growth rates in the first five years damn near killed me. Flat out I was lucky the company survived too. All I am saying is be sure you establish a "critical growth path" that is consistent with what you can financially support over the long haul.
 
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I'm thankful that there are some people in the biz on this site that are willing to share tips, not only in sauce making, but on the business side as well. If I was going at this alone, I wouldn't know where to turn or what to do.

I had my 1st review over at www.thehotzoneonline.com the other week and it got a not so good review (Passow, your's will be arriving soon...I promise!!). I don't think it was used on the right foods, but that's what I got and I take it for face value. One person's opinion of what I make. I do understand that I will never be able to make everyone think I make the best sauce on the planet (maybe the funkiest) but then again, I'm still new to making sauces and I understand there's a little tweaking to do.

Hopefully, with a little luck, I'll be able to enter this market and do well enough (and grow slow enough) to only use the black ink. This year looks to be good. Stay tuned!
 
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DD, I wish you luck in your endeavor. You seem to have a pretty good grasp on what the realities are in the industry. This business is not a get rich niche, slow and steady will win you the race.
 
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