Making hot sauce and inventing new recipes is fun…if you like eating a lot of hot sauce. Bottling and packing it for sale might not be the fun part for many people. Many producers of food products offer to use your recipe or their own to put your label on the product for unique branding. This is known as private label and it is an easy and exciting way to enter the hot sauce business.
Private label is where a company produces, bottles and labels a hot sauce for you for sales, special events or a restaurant promotion. Companies provide their recipe or will work with you to create an original recipe. Private label eliminates the need to own or rent kitchen space and allows you to concentrate on marketing your brand of hot sauce.
Private label is a quick way to produce, package and sell a hot sauce with your recipe, logo and brand name on it. What is provided by the company varies but it will usually include a unique sauce, woozy bottle, product display label and nutritional label. Some companies also provide graphics services to help create a label and logo.
With private labeling, you don’t need to register a kitchen, rent kitchen space or hire employees to help produce and bottle your hot sauce. You would hire a company to produce the sauce for you in their facility. Some larger companies who work with well-known brands will have minimum orders and contractual obligations. However, many smaller companies can produce a single case at minimal costs. Sauces can be purchased in single bottles, bulk storage or in custom containers depending on your operational needs.
Is private label legal?
Private label is a completely legal opportunity to enter the hot sauce business. Selling a private label sauce with THEIR brand name on it may be without having contracts involved. There are many well-known brands of hot sauce found in stores, bars and restaurants that use companies for their branding label. Although a consumer may be unaware of its implication in retail it is a very common practice.
Do I need to sign a contract to private label hot sauce?
Large orders with companies that produce for brand name stores across the country will need a contract signed. Many companies will also require a Non-Disclosure Agreement (NDA) stating that information exchange is confidential. They will usually have to be signed and returned before any other transactions take place. This can be very typical and is in no way a contractual obligation.
Can I use private label hot sauce to re-sell for profit?
Private label hot sauces can be sold under your brand name. It is considered your sauce using your recipe with another company that packages it for sale. These sauces are sometimes sold for special promotions, events or other marketing opportunities.
How much does it cost per bottle to purchase private label hot sauce?
Companies can produce private label hot sauce between $2.79 and $3.95 a 5oz bottle for your use. Typically there will be a minimum order of a case or more. The hot sauce can then be labeled by the same company or you can provide your logo and mark up the product for sale. The cost per bottle will decrease with the purchase of larger quantities and this will increase the amount of money you can make on each bottle. Some companies will have additional costs for graphic design work and there could be additional shipping costs as well.
Can I make money with private label hot sauce?
There is money to be made selling private label hot sauce but the profit margins may be lower than if you produce it yourself. A profit margin is the amount of money you can make compared to the amount of money you are putting into a product. If you purchase a bottle of hot sauce for $3.95, put your label on it and sell it for $4.95 your profit margin is $1.00 per bottle. Don’t forget to include additional expenses like shipping and marketing. These costs could be as much as $1.00 per bottle so research the cost implications of these as you may have to keep them to a minimum in the beginning.
Gourmet hot sauces can cost $12.00 to $15.00 for a 10 oz bottle of sauce. Some private label sauces can be purchased for about half this amount. Some companies like Private Label Foods provide hot sauce in bulk containers and this will decrease your cost for the amount of hot sauce in a single bottle but there will be other packaging costs as well. Some sites offer goods at a reduced rate in mass quantities or larger orders. Alibaba has many varieties of hot sauce but makes sure you purchase samples so you know where they are coming from.
Branded Sauces provides 48 – 5 oz bottles in a chipotle-style hot sauce for $3.70 per bottle, including labels from Amazon. Mark up each bottle to $5.00 and that is $1.30 per bottle or over $62.00 for a case. While that is not a huge profit it is an opportunity to market a hot sauce with your brand and still make money.
What is co-packing?
Co-Packing is using your hot sauce recipe and having a manufacturing facility make, bottle and package it for you. This is ideal if you have your hot sauce recipe but these start-up costs will be high. That is because included within the costs are usually recipe development, nutritional analysis, label design and production. Read More on the benefits of co-packing here!
The minimums for many co-packers are usually higher than private label and can start over 100 gallons, that would be over 2,500 – 5oz bottles of hot sauce. The advantages of co-packing are that you control the recipe contents of your hot sauce.
What are the cost differences between private label and packaging your sauce?
Hot sauce can be a very inexpensive condiment to make and produce. Keeping the investment costs down and profits up is the key to any successful business. The cost to produce a single bottle of hot sauce on a small scale can be under $1.00 a bottle with a simple ingredient combination of hot peppers and vinegar. Some private label sauces can be purchased for about $2.00 a bottle.
Can I control the recipe?
Companies will provide an option of using one of their existing recipes or providing your own. There will be added fees working with staff to create your signature sauce but it will become a unique product. Often a company will have a base recipe that you can change slightly to create your own sauce. However, in many cases, the company will have rights to the recipe.
Can I provide a label?
The FDA does not allow bottles to be shipped without labels which is why companies provide a labeling service. You can usually work with a company to provide your artwork, logo and brand image. Some companies will also provide a nutritional label and bar code along with the Product Display Label. Inquire whether or not they do…this is important.
Who provides the nutritional label and bar code?
Private label companies will provide the (PDL) Product Display Label and the nutritional label but not the bar code. A bar code is a necessity to have if you want to sell sauce in retail stores and some online locations such as Amazon. Selling hot sauce through farmers’ markets or your own store won’t need a bar code.
Who stores the hot sauce?
Unfortunately most manufacturers that supply private label hot sauces will ship the bulk order to you and then you will be responsible for storage. The private label companies are in the business of selling you their hot sauce (partly why they are offering private label opportunities) and not in the business of shipping products.
How to choose a private label hot sauce company
Many companies that don’t have the facility to bottle and package hot sauce will have larger manufacturers perform the tasks for them. You will want to select a private label that will do the most work for the least amount of money.
Choose from one source
Bottle type, labels and certainly flavor will be different from company to company. Keep some similarities between the sauce appearance by selecting one company. As sales increase adding more products from several companies that appeal to consumers of hot sauce would be feasible.
Criteria for selecting a private label hot sauce company
Lowest price sauce = highest profit
Obviously the lower the initial investment the better the opportunity to make more money. While you want to make the most profit from your hot sauce pricing may not always be the number one criteria. Not all sauces that are priced low are of low quality but always aim to keep the profit margin high.
Highest quality product
A reputable company says everything about the products they are producing. If a private label hot sauce company has produced a hot sauce that you have heard of chances are they are producing a quality product. Hot sauce can easily be watered down or have added fillers to increase quantities.
Make sure the company you select provides samples. Minimum orders are important because you don’t want to spend thousands of dollars on a product that doesn’t taste very good. It would be very difficult to sell a product you don’t believe in.
Advantages of a private label hot sauce
No kitchen required
Private label hot sauce puts all of the kitchen work on another company and allows you to focus on marketing and selling hot sauce. However, always remember that a great-tasting hot sauce will sell itself through word of mouth so don’t neglect the flavor of your sauce.
No packaging or labeling requirements
Hiring a private label company takes away the burden of having to label and package hot sauce for your small business operations. This allows YOU to market and promote YOUR hot sauce without having to manage the tasks of food manufacturing.
Disadvantages of a private label hot sauce
Other brands may have the same sauce
One of the stipulations about a private label hot sauce company is that quite often they control the rights to the recipe. If they don’t offer recipe development then there is the possibility that others have branded the same hot sauce. There is a lot of hot sauce out there but you want yours to be unique.
May not have complete control over the recipe
Some private label companies that provide an inexpensive hot sauce may not allow you to create your recipe. This means that the same sauce you are purchasing will be available to others who can re-sell it under their brand name.
Private label companies
There are hundreds of private label companies that specialize in hot sauce. We have reviewed the best options for a start up private label hot sauce company and here are the recommendations. Research a company based on the needs of your hot sauce business. *Not affiliate links
|Cost per bottle||$2.95 – $3.25 / 5 oz bottle|
|Co-Packing||Yes and recipe development|
Hot Sauce Depot
|Hot Sauce Depot|
|Cost||$2.79 / 5 oz bottle|
|Minimum order||Case of 12|
|Cost per bottle||$3.50 / 5 oz bottle|
|Minimum order||2 case minimum|
|Other||1.7 oz sample bottles|
|Hot Shots Inc|
|Cost per bottle||N/A|
|Other||Great label design|
|Cost per bottle||$7.52 / 12 oz bottle|
|Other||Custom recipe blending|
Private Label Foods
|Private Label Foods|
|Cost per bottle||N/A|
|Co-Packing||Yes and custom recipes|
|Other||Not available in individual bottles|
Croix Valley Foods
Croix Valley Foods has the lowest cost per ounce for their sauce but these sauces lean toward a barbeque or marinade. However, they do supply a Hot and Spicy sauce.
|Croix Valley Foods|
|Cost per bottle||$4.35 / 12 oz bottle|
|Minimum order||12 cases of 12 each|
|Other||$65.00 onetime labeling fee|
|Cost per bottle||Based on your recipes|
|Other||Huge product line of sauces|
|Cost per bottle||Costs are based on your recipe|
|Custom Labels||Provide your own|
|Contract||Yes but also have to sign a Non-Disclosure Agreement (NCA)|
|Other||Produce Yellowbird hot sauce and other top-selling brands|
Hotsauce.com has a line of hot sauces between $.79 and $1.39 an ounce. These sauces range from a traditional Louisanna style sauce to a scratching hot Trinidad scorpion. This site is also a hub for hundreds of hot sauce varieties.
|Cost per bottle||$3.95 / 5 oz|
|Minimum order||Case of 48|
|Other||Free shipping and free graphic design|
Delaware Sauce Company
|Delaware Sauce Company|
|Cost per bottle||$2.85 / 5 oz bottle|
Karma Sauce Co.
|Karma Sauce Co.|
|Cost per bottle||N/A|
|Other||Process development, nutritional analysis, pH testing|