Huy Fong Foods is a hot sauce company based in Irwindale, California. It is named for a Taiwanese freighter, the Huey Fong, that carried founder David Tran and 3,317 other refugees out of Vietnam in December 1978.

Some background:

  • Huy Fong produces 20 million bottles of hot sauce a year. That’s some 54,000 bottles a day.
  • The sauce comprises eight simple ingredients.
  • Each bottle features a distinctive green cap or lid and an image of a rooster.
  • According to a documentary done in 2013, Huy Fong has double-digit sales growth each year.
  • Huy Fong does not spend anything on advertising.

The Sriracha effect: product development vs. marketing

Sriracha

Huy Fong Foods, based in California, is the producer of Sriracha hot sauce.

Of course, the hot sauce I am talking about is Sriracha[1], and I want to explain in a few short sentences what I call the Sriracha effect.

First, let’s take a look at the fourth bullet, above. Huy Fong does not spend anything on advertising. That’s right. Zero. Zip. Zilch. In an interview, David Tran said that his product was his advertising. In other words, he believed that if he spent his time developing a great product, it would sell itself.

Now look at the third bullet—double-digit growth each year. Double-digit growth. When was the last time you could imagine anything like that?

Let me conclude by likely butchering a quote that I once heard. It’s a bit harsh, but I think there is one or more grains of truth there. Here goes:

In today’s marketplace there appears to be an inverse relationship between the amount of money spent on advertising and marketing and the efficacy (demand) of the product.

This means that advertising is often the first sign of a product failure. If this is true (and I think it is), three corollaries come to mind:[2]

  • If the product is in demand, less money can be spent on marketing.
  • If the product is not in demand, more money will be required for marketing.
  • You can invest in your product or you can invest in marketing.

As you think about these corollaries, think about the simple (only eight ingredients) product with a green lid and a rooster.

I think there is a lesson there for us.

[1] By definition, Sriracha is a Thai hot sauce named after the city in which it was first made over 80 years ago, Si Racha, an eastern city on the coast of Thailand.

[2] These three corollaries were repeatedly demonstrated in the series of ads featuring Microsoft and Apple—“Hi, I’m a Mac”; “Hi, I’m a PC”—that ran in the 00s. The campaign ended in 2009 after a total of 66 ads.

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4 Comments
  1. Mary Piccioli

    Great blog, Bob.

  2. Ginny Coombs

    Love the title and the message, but the double digit growth claim is not the third bullet in the version I received–it’s in the fourth bullet. A trick to see who is paying attention?

  3. Love Sriracha!

  4. TJ

    Bob, you are definitely on to something here. What are your thoughts about marketing NEW academic programs? The institution still needs to get the word out or should they new programs only be “build it and they will come” type blockbusters?

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