2021 Is A Great Year To Enter The Hot Sauce Business
I am seeing more and more varieties and brands of hot sauce sold in stores and online than I have ever seen. At one point I thought it was just my personal interest in trying new sauces and testing my palate, but research shows the hot sauce industry is growing rapidly. I have recently entered the hot sauce business as an entrepreneur, but I am not sure if this is a good time or not. What is the projected hot sauce consumption for 2021?
Market reports suggest a continued growth of hot sauce consumption throughout 2021 and it will continue to grow through 2026. The hot sauce market has grown by 1% from 2019 to 2020 globally and is projected to increase over the next six years. Hot sauce production has increased by 5.1% over the last five years.
Hot sauce is gaining popularity
Although contemporary versions of hot sauce that I call “traditional” were invented in the early 1800 historically it goes back about 2000 years. Chilis were domesticated as a dietary item about 9000 years ago. The exact age of hot sauce is difficult to determine.
According to the new scientist.com spices were found in foods 6100 years ago. While not quite as old as beer it still has some time to it. Even with contradictory dates of when hot sauce was invented it is evident has been around for hundreds if not thousands of years.
Hot sauce has been gaining popularity for years for many reasons. According to the daily beast there is some form of hot sauce is in 9% of homes in the US and is in 16% of households where the head is 35 years old or under.
This fact backed up my research of hot sauce demographics largely being millennials and they are increasing the consumption of many products. However, the number of households having coffee at home more than triples the percentage of hot sauce consumers. The consumption of alcoholic beverages beat both these products by a land slide.
Some of the well-known or better selling sauces are not that hot and there are more varieties being introduces that use that as a marketing tactic. This is indication that some new consumers outside of the demographics identified are reaching out for hot sauces but are not ready for the extreme burn…like me.
More and more hot sauces are being introduced into the market
According to hotsaucefever there are over 527 hot sauces on the market. More hot sauces are being introduced into the market due to the low cost of entry. Compared to other food industries the hot sauce market is much less expensive primarily due to the cost of making the product.
The popularity of hot sauce is partly driven by the increase of culturally diverse populations
With the increasing influx of immigrants from Asia Pacific and South America they have brought their cuisine, which predominantly features spicy foods. The increased introduction of such foods has led the average household to try such bold flavors and they are becoming staple meals in restaurants.
Large manufactures are exploring these regions with increased popularity of hot sauces and producing sauces that cater to the needs of the increased migrant population. This also triggers a unique blend of flavor offerings and these companies will often produce an expansion brand of an already popular selling sauce. An astonishing 22,000 new products featuring hot and spicy foods were introduced in 2017 alone.
Also, statistics show that millennial’s have developed a taste for hot sauces and spicy cuisines from the increase of eating out in ethnic restaurants. This is a large generation and they expected to catapult the hot sauce industry for the next six years.
Nutrition and Flavor are expected to be the focus through 2020 and there will certainly be more interesting flavors introduced. More and more manufactures both large and small are exploring different hot sauce flavor combinations and are using their branding as a way to introduce them. International flavors were the trend of 2020 including influences from Africa, the Middle East and Asia and this will continue through 2021 as well.
Hot sauce trends in 2021
Trends in hot sauce consumption in 2021 are more about flavor than heat and they are directed toward international flavors. Sauces such as African Peri Peri, Indonesian Sambal and Japanese Yuzu Kosho are competing with popular domesticated artisan sauces.
Fermented hot sauces that have become more desired domestically due to the popularity of fermented Asian foods are increasing in demand in the US. These type of sauces are easy to produce, offer additional health benefits and provide unique flavors.
Domestic increase in hot sauce consumption and pop culture references
Artisan sauces that combine fruity flavors and unique spices are popping up at arts festivals and craft food fairs across the US. There are many YouTube videos of people eating super spicy sauces or having a hot sauce challenge to see who can tolerate the most heat. Game shows featuring celebrities consuming hot sauces and filming their reactions has become an amusement by many to watch.
In addition, shows like the Simpsons feature Bart consuming what appears to be Sriracha brand hot sauce. Some more popular brands hot sauce have accessories like phone cases, shoes and are combined with potato chip flavors as well. These are all indications that hot sauce has been widely accepted into pop culture.
What is the projected hot sauce consumption for the next 5 years?
The consumption of hot sauce is expected to grow throughout the United States and globally. There has been increasing growth in consumption and it continues to grow throughout Asia and Latin America. Hot sauce consumption is expected to reach 3.77 billion US dollars by 2026 compared to 2.29 billion in 2018.
Will people ever stop eating hot sauce?
Unlike specialized diets or trendy foods, the consumption of hot sauce throughout out the world has only increased. I consider hot sauce a condiment and everyone loves to drown their food in condiments. I like hot sauce for its flavor, so I almost always choose a medium heat and use it sparingly on my food.
Hot sauce is more popular in some cultures than others, but it will increasingly become more popular in America. There are no known health risks related to hot sauce consumption and most brands have little or no calories. While Americans continue to practice health conscious eating habit the hot sauce industry is not negatively affected.
What would affect the increase or decrease of hot sauce consumption?
Lack of demand can cause products to fail
Lack of demand is the number one reason products fail including food products. With the growing demographics who consume hot sauce and an increase of consumers who desire to bring it into their diet, the lack of demand is unlikely.
Making a great product is also key but if no one wants your product your efforts are fruitless. There are other reasons your hot could fail but finding the right people to purchase your hot sauce is just as important as knowing who your customers are.
Climate changes could effect the hot sauce market
Like all produce across the continents the weather and other natural disasters could affect the growth of hot peppers, hence having an effect on the production of hot sauce. Due to the many regions in which you can grow peppers this is highly unlikely to halt all hot sauce manufacturing.
However, the need to import chilies domestically could drive the costs. I have grown peppers from seeds and from plants and the weather is certainly always a factor. Hot pepper plants prefer hot dry and sunny conditions like the native conditions of Mexico.
Asia is a top producer of chili peppers and then Mexico, Turkey and Indonesia. The US has been in the top five globally of the highest producing countries of chilies. Specifically, the top states being New Mexico, California, Florida, Georgia, New Jersey, Ohio, North Carolina and Michigan.
If these regions with large growths of hot peppers are affected by negative climate factors than this could cause hot sauce prices to increase and/or cease the production of some brands of hot sauce. Unfortunately even when a struggling economy survives prices never tend to drop to where they were previously.
Other growing conditions affecting hot sauce sales
Are hot peppers imported or exported?
Franks Red Hot uses a pepper from the cayenne region of French Guiana in South America to give its unique flavor. New Mexico produces nearly half of the chilies grown in the US. 8,000 to 10,000 acres harvested annually. An easy method of tracking the import / export of hot peppers is by the weekly pricing differences of each variety of hot peppers according The US International Trade Commission.
Are hot peppers grown in green houses?
A long growing season is the secret to growing hot peppers. A greenhouse can reproduce these conditions which is why they are often grown in green houses. Increased greenhouse growing facilities has decreased the threat of the global effects of pepper growing.
COVID Impact and reasons hot sauce will survive
Obviously much of the economy was negatively affected in 2020 by the COVID pandemic and this happened worldwide. Some products thrived where others just survived and many simply died. Hot sauce is a survivor and, in some ways, has increased sales production.
It is a prepackaged food
Although it was reported that foods were not the source of spread for COVID some food industries have been affected otherwise with this belief. Because hot sauce is prepackaged it has given consumers the impression that it is COVID safe.
It is inexpensive
The economy has been struggling through out the pandemic and many have changed their spending habits. However, due to the low cost and high satisfaction that hot sauce brings to a meal it has been able to survive through the pandemic.
People still love it
Hot sauce became a good stay at home food due to ability to maintain its shelf life and its added flavor to foods. Taste sensory diminished but because of the strong flavors of many hot sauces it became a staple food product.
How does hot sauce rank among other condiments?
Hot sauce has been gaining popularity among other condiments such as ketchup, mustard and mayonnaise. Just as popular are these same condiments infused with hot sauces. The low-calorie content and extreme flavor are ranking hot sauces higher than other condiments.
According to FoodBeast hot sauces rank on the top 25 for condiment sales and the top manufacturers are Franks, Tabasco, Cholula and Texas Pete’s. Compared to other condiments the hot sauce market grew by 150% between 2000 and 2015. New Hope Network states the hot sauce industry is showing no signs of slowing down.
Taste Atlas lists Crystal hot sauce as being ranked no. 41 for the most popular hot sauces in the world. Along with Texas Pete at No. 34. There are several condiments on the list that have a high heat level caused by hot peppers.
The hot sauce business is heavily saturated with popular name brands being available in store chain throughout the nation, convenience stores at every corner and online stores available globally. Statistics show that that hot sauce consumption is on the rise and people love trying new products. Festival and online store are a great way to introduce and test your new product without investing years of your time or thousands of dollars.
2021 is a great year to enter the hot sauce business
Your opportunities for a successful hot sauce business are better than ever and there are two simple factors to keep in mind if you plan on starting a business, make a great unique product and market it to a mass audience.
1. Have a great, unique product
This is true of any business and not just hot sauce. The demand has been established so making a great tasting original product would be the next step. What is the competitive advantage of your sauce over the one next to it on the shelf?
This also means knowing who your competitor is and what their sauce (s) taste like. Consider how long they have been in the market and where they sell. Your sauce needs to have a unique flavor but product labeling has a lot to do with it as well.
2. Market it locally and globally
Marketing a product may be just as important as the product itself. Don’t hold back on getting your product in front of the right people. Although the demographics for hot sauce consumption have been established reaching this demographic and beyond will allow you to reach a larger audience.
I have heard people say if they package crap properly they can sell it. I’ve always said if you have a great product it will sell itself. Also, I have to really love what I am producing. If you can’ t stand behind your product who will?
You can’t just produce mass quantities of a product and have it sit there…get the word out. Marketing your product is essential and marketing it to the correct audience could make or break your business. Starting a hot sauce business in 2021 could show success for the future.
Cost of Sauce
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Very interesting Thomas. Looking forward to entering this market soon.
Cheers,
Domenic