I have always had a gleam in my eye to become an entrepreneur but could never grasp a product or service that I thought would sell. Upon some research I have found that the hot sauce business is growing and shows to be profitable through 2026. It just so happens that I love hot sauce so…What does it cost to start a hot sauce business?
The costs to start a hot sauce business and sell at a farmers market are under $1,000 to include equipment and enough sauce for about 50 / 12 pack cases or 600 bottles. Additional cost for licenses and permits could be as much as $1,000. A bottle of hot sauce can be produced for about $1.32 and this includes the container, peppers and other ingredients.
All costs were figured to start a small hot sauce business working out of your home kitchen with costs for ingredients and bottling being the average costs throughout the US.
The startup cost for any business can be what makes or breaks a decision to enter business. Fortunately, the cost of making a hot sauce, bottling and shipping it can be relatively inexpensive compared to other start up cost in the food industry. Therefore, making it relatively inexpensive to start up.
All costs for any start up can be broken down into bare bones of what it costs to start a business. Due to the relatively small size of operations this could be done from your home kitchen where you do not necessarily need to rent space.
What are the risks of starting a hot sauce business?
All business is risky. The start up costs and operations costs of a hot sauce business can be lower that some other businesses but sales can plummet for many reasons. The hot sauce market is on the rise so the demand for product is there.
Everyone’s situation is different, and everyone may want to enter the hot sauce business at a different level. I am always researching the most cost-effective way of doing something but producing the highest quality product. I have broken down the bare bones of what you need to begin a hot sauce business and the costs associated with them. The best way to break down costs are per bottle to get a precise bottom up estimate of what each element may cost. See the Cost of Sauce and download a free spread sheet to calculate costs from the bottom up…one bottle at a time.
I broke down the estimate even further to separate into two factors: necessary costs and considered items. Some things such as the physical products are absolutely necessary in starting a business but others such as equipment, rental space, marketing and distribution can have some flexibility.
7 items needed for starting a hot sauce business and the costs associated with them (necessary costs)
1. Recipe – 0$
I have written about hot sauce recipes and creating your own in my article titled Easy Hot Sauce Recipe. If you follow some popular recipes and experiment by making it your own costs can be as little as $200. Copy-write laws do not protect the listing of ingredients but they do protect the written means and methods in literary expression of producing the sauce. That is why I have often said look at the listing of ingredients on a bottle of hot sauce and use your own skills to create one.
2. Peppers – $.45
Some peppers can be very inexpensive. I have selected jalapeno partly due to the cost being much lower than some others and the availability is plentiful. Due some research to find lower costs once you have the peppers selected that you are going to use. I found an 8 oz bag of Jalapenos at Aldi for $.89 and concluded that 5 or 6 peppers (about half the bag) are enough for one bottle. Where To Buy Hot Peppers? for exotic varieties.
3. Vinegar – $.28
A 32 oz bottle of Heinz Apple Cider Vinegar from Walmart can be purchased for $2.24. We are making a 5 oz bottle of sauce so we only need about 4 oz (water and peppers will top it off) to be a total of $.28.
4. Water – $.10
I used a guess for the cost of water here because this equation will only need 1 once. If you are continuing to produce large quantities of sauce purchasing distilled water will still have a minimal cost impact.
I can get water out of the tap for free plus the electricity it costs to pump from my well to my house but I prefer to use bottled, distilled or de-ionized water. Test your water or at least be comfortable with the source.
5. Garlic – $.03
These costs were based on the cost of three whole garlic heads at Aldi for $89. Each head contains about 8 – 10 cloves equaling $.10 for two that I used in the recipe. Minced garlic will probable be more expensive than fresh garlic cloves.
This actual item is not a necessity but perhaps there are other spices that your sauce will use ti give its unique flavor. Either way the cost for spices will be very low.
6. Bottles – $.46
I have an entire blog post dedicated to bottle types and the costs of each type of bottle. Buying a larger quantity will be less expensive but small orders from The Bottle Store will be about $.46 per bottle.
7. Equipment – $200
OK so there is more than one item listed under this heading and the costs can escalate depending on the size of operations. The type of equipment can vary but the point is that this is a necessary cost.
A blender and a good set of kitchen knives are a necessity but if you have some high-end hand me downs from a former chef in the family that could cut some costs. In addition, there could be strainers, funnels and gloves needed to be purchased and were included here under miscellaneous.
Blender – $100
You can purchase a blender for much less than $100 but if you plan on doing some mass production you should buy a higher quality blender. See the Blender Buying Guide to in depth research on the size and cost of a blender based on the needs of your business.
Knives – $50
Again you could probably buy cheaper but my 6-piece set from Homegeek is super affordable and super useful. I regret not getting the set with the scissors like the one in this link because they are such a useful kitchen tool.
Miscellaneous – $50
As mentioned above add some extra money for miscellaneous items such as strainer, spatulas and mixing bowls and if they are not used consider it a buffer on your equipment costs. Pots and pans become a necessity it you are cooking your sauce.
Those are the costs for the necessary items needed to produce one bottle of hot sauce. Once you have purchased the equipment, considered as start up costs, the cost to continually produce sauce will not need to include the equipment.
Total Equipment Costs – $200
Total Product Costs Per Bottle – $1.32
Prices for products are based on average prices available at leading grocery stores across the country. All items bought in bulk, wholesale or discount will certainly lower your overall production costs.
Next, I have listed the considered costs. If you have a decent product and have decided, you are pursuing the business of hot sauce sales, than you should pursue these options. It will only help you function as a legitimate business.
Nice to have (considered items)
Professional Level Equipment
If you have done the market research and are going to pursue manufacturing on a much larger scale than you will need to invest in commercial grade equipment, such as industrial blenders, and bottling / capping / labeling equipment. This type of equipment can easily cost thousands of dollars but will also save you time.
A space dedicated solely to the production of hot sauce will definitely be needed if you are planning on expanding your business or adding commercial quality equipment. These costs will vary greatly from city to city but fortunately there is not much space needed for the production and storage of hot sauce.
There are many ways to market a product. Word of mouth is one of the most effective and does not cost anything. If you choose to market through social media there is always Facebook, Instagram and TikTok. Marketing services will need to reach different avenues of the consumer and these cost could add up into the thousands as well.
There are many factors and variants that are included in the cost of shipping, packaging, marketing and distribution of a product so this will need to be researched fully if you are serious about selling hot sauce or there are other options as well.
I have no cooking experience, can I start a hot sauce business?
Step one is you need a product to sell. It could be your own sauce, affiliate program of private label products. If you have a great product to start with word of mouth can drive sales. If you have tried recipes similar to the one above and cannot satisfactorily create a good product, sell someone else’s.
What is the cost to start a private label hot sauce business?
How to start private label hot sauce? Private label hot sauce is a very easy business to get into and could be very profitable if you have traffic from a related source such as a restaurant, sandwich shop or food truck. There are many companies that produce the sauce, package it and label it the product and all you have to sell it.
Some private label sauces from sites like Branded Sauces can be purchased for about $2.28 but this cost is based on a quantity of a 48 bottle case. These costs will go down if larger quantities are purchased but at $2.28 a bottle there is still room for profit.
Web sites such as Alibaba offer much less expensive products but you would be ordering pallets. This type of private label selling is popular but takes a bit of product research.
If you have a desire for business and a passion for hot sauce than there is no better time to enter the industry. Initial start up costs can be under $1.32 a bottle and the demands can have you needing to produce cases at a time.