How A Vietnamese Refugee Founded A Multi-Million Dollar Sriracha Empire
After arriving in the United States, one Vietnamese refugee went on to create one of the most beloved hot chili sauces, easily recognizable by the white rooster imprinted on today’s famous red and green bottle.
David Tran, 71, began making his chili sauce called Pepper Sa-te in Vietnam in 1975. Back then, he bottled his chili in recycled baby food glass jars then sold and delivered his product by bicycle.
Following the Vietnam War, Tran, who was a major in the South Vietnamese army, escaped communist Vietnam in a Taiwanese freighter train called Huey Fong, which would later become the source of inspiration for his multi-million dollar company, Huy Fong Foods.
Jobless upon his arrival in the United States in 1979, Tran continued to experiment with his hot chili sauces. He made his sauces by hand in a bucket and delivered them to Asian restaurants and markets in Los Angeles and as far off as San Francisco and San Diego in his blue Chevy van. He even painted the logos of his hot sauce onto the van himself. Tran told The Los Angeles Times:
“My American dream was never to become a billionaire. We started this because we like fresh, spicy chili sauce.”
The Vietnamese entrepreneur went on to produce a number of hot chili sauces and pastes including Pepper Sa-te, Sambal Oelek, Chili Garlic, Sambal Badjak and Sriracha Hot Sauce. Sriracha Hot Sauce, a version of a hot sauce originating in Si Racha in Thailand, was the product that led to Tran’s insanely successful hot sauce empire. Tran said:
“Everything tastes better with sriracha. I put it on everything and eat it every day.”
Sriracha is made from fresh jalapeno chili peppers grown in the U.S. In the 1980’s, Tran struck a deal with Craig Underwood of Underwood family farms to supply jalapenos for his sauces. Though he initially agreed to 50 acres of farmland, Tran now contracts 1,700 acres of fresh red jalapeno peppers that are spread across Ventura County to Kern County in California.
In 1980, Tran made sauces out of a 5,000 square foot building in Chinatown, Los Angeles. Seven years later, Huy Fong relocated to a former pharmaceutical facility that encompassed 68,000 square foot in Rosemead, California. Huy Fong Foods finally settled into Irwindale, California in 2010 and made the 650,000 square foot facility their headquarters.
The Sriracha phenomenon, which began in the San Gabriel Valley, swept throughout the rest of the United States, Canada, Mexico and over ten different countries by 2009. In 2012, Huy Fong Foods brought in $60 million in revenue from their hot sauce products and were consistently growing at a rate of 20% per year.
Tran’s goal for the company is to make it so that “everybody could hold a sriracha in their hands.” He explained his business motto:
“Make a rich man’s sauce at a poor man’s price.”
Though Tran refuses to disclose the wholesale cost of his bottles, a 28-ounce Sriracha bottle averages about $3.50. Sriracha was affectionately dubbed by employees as the “secret sauce.”
The company website explained that no one had ever been invited to witness the secretive Huy Fong factory in action in Rosemead back then. Others joked that it’s easier to gain access into the Pentagon than it is into Sriracha factory to see its inner workings. The website states:
“To this day, the company still can boast that it has never advertised its products, nor does it employ one single salesperson — the existence of the secret sauce is only spread by word of mouth — the ‘secret’ sauce sells itself.”
Tran and his company maintain a low key profile with a limited social media presence and few acceptances for media press coverage. As the company’s CEO, Tran has turned down lucrative offers to sell his company in fear that others will alter from his vision. He has also refused to sell stock in the company and offers from financiers to increase production.
Today he keeps his hot sauce empire as a family owned business. His son serves as the company’s president and daughter as vice president. Tran explained that the people who want to buy his company are never interested in the product, only the profits.
By Laura Dang || NextShark
