Business & Economy

Move over Louisiana, Los Angeles is emerging as a hot sauce capital

The Tapatio hot sauce factory is located in Vernon. The 30,000-square-foot building houses production for the family-owned hot sauce company.
The Tapatio hot sauce factory is located in Vernon. The 30,000-square-foot building houses production for the family-owned hot sauce company.
Maya Sugarman/KPCC

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Breakfast at the Saugus Cafe in Santa Clarita is an old-school affair. The diner has been in business since the 1800s. Which perhaps explains what you find on the tables during the weekend breakfast rush: Just a  bottle of ketchup, and a bottle of Tabasco sauce.

But look around the restaurant, and people are dousing their eggs and hash browns in all kinds of stuff. That's because there's a storage room stocked with all kinds of different hot sauce.

Manager Yessenia Mercado said the restaurant started stocking spicy alternatives about five years ago, as more customers asked for them.

"It was the customers’ request," Mercado said. "Whatever they requested, like Tapatio, or Pico Pica, or Tabanero, that is what we started getting.”

What she’s describing is a trend that’s changing the way America spices up its food. Industry experts say that in the last several years, traditional Southern-style hot sauces, like Louisiana’s iconic Tabasco, have lost ground among U.S. consumers.

“During the past four years, market share among the top four companies has dropped," said Ibrahim Yucel, an analyst with the market research firm IBISWorld, Inc.

Top U.S. hot sauce manufacturers include the McIlhenny Company, which produces Tabasco, and Reckitt Benckiser, which produces Frank’s RedHot. Yucel, who authored a recent report on the nation's hot sauce production, said the drop in market share is small but important.

Like for Tabasco, for example, which still dominates the U.S. hot sauce market. Its estimated market share is a little under 18 percent: "Just five years ago, it was about 20 percent," Yucel said. "It's not that big of a drop, but in five years, a 3 percent drop in market share is pretty significant for a food manufacturing industry such as this one."

What’s growing in popularity are Asian and Mexican-style sauces, made with searing chiles and pungent garlic. Changing demographics have played a part, Yucel said, along with the rise of ethnic grocery chains. So have the tastes of younger consumers.

“A key driver is changing immigration profiles," he said, "but in addition there is also the growing purchasing power of millennials, who are more likely to try new foods and complement their current cuisine with new flavors."

These younger consumers love experimenting with hot sauce, said Ted Chung, a Los Angeles marketing guru whose Cashmere Agency specializes in reaching millennials.

“We’re going into an era which I call ‘diversity is hot,’ where everyone is going to want more diversity and pepper-ness and spiciness in their food," Chung said. "And Los Angeles is the great kind of example early on of that trend."

Los Angeles county is home to two major hot sauce brands, Huy Fong Food’s Sriracha, and Tapatio. According to IBISWorld's report, Huy Fong Foods leads the pack of "other" hot sauces with an estimated market share of 5 percent. Tapatio is also named in the report as a competitor.

One characteristically L.A. thing about both companies is that they were founded by immigrants. Tapatio was founded in 1971 by Jose-Luis Saavedra, an immigrant from Mexico. And Huy Fong was founded in 1980 by David Tran, a refugee from Vietnam.

“I know these are referenced often as the ethnic hot sauces," Chung said. "But what they really are to me is the true American hot sauces. America (is) all these different groups.”

One recent morning, glass bottles clanked along the assembly line at the Tapatio Foods factory in Vernon. Chief Operating Officer Luis Saavedra runs the daily operations now, although his 80-something-year-old father is still the CEO.

The younger Saavedra pointed to a room filled with six enormous tanks, almost as tall as the ceiling. The tanks hold the day's production of hot sauce.

"This tank is over 4,000 gallons - 4,000 gallons of hot sauce," Saavedra laughed. "Let me tell you, I could have a good time with that. I could put that on everything."

His parents started making their secret-recipe sauce at home half a century ago, when his dad was still employed at a local aerospace plant.

“My mother and my father, they would make this hot sauce, and they would sell it to their co-workers, which they loved it," Saavedra said. "When the plant closed down, they decided to go into business.”

Saavedra said at first, the sauce sold mostly at ethnic markets. By the late 1980s, it began crossing over to the mainstream. These days, Tapatio is distributed around the world – even in Mexico.

It’s your classic L.A. success story, much like that of fellow immigrant Tran, whose family continues producing its Sriracha sauce to enormous success despite a flap with the city of Irwindale a few years ago over the spicy scents that emanated from the factory.

Tapatio's Saavedra thinks Los Angeles' cultural mix makes for a natural hot sauce capital.

“I think that because of all the diverse groups that inhabit L.A., it really is the food mecca of the United States, and hot sauce predominates that," Saavedra said. "Everybody has ham and eggs with hot sauce, tacos with hot sauce. And tacos can be everything from Mexican style to Korean style. So everybody puts something hot on their food, and it really has evolved from here."

Two years ago, Chinese American Museum curator Steven Wong set about capturing the essence of Los Angeles' love affair with its homegrown hot sauce in an exhibit he called "L.A. Heat."

“One reason I came up with the show L.A. Heat is that I think Los Angeles is a very unique place in this country, and in the world," Wong said. "We have the intersections of so many different people, mixed together that experience so many different foods and so many different sauces. I think it’s the right incubator to have these things come out.”

In one artist's piece, the sombrero-wearing Tapatio man was depicted riding the Sriracha rooster, sprinkling hot sauce on a piece of pizza. In another, the sombrero man and the rooster stomp over the downtown L.A. skyline.

"I envisioned them as Godzilla and Mothra, these giant logo creatures, fighting over the city of Los Angeles, fighting for the flavor fans," explained artist Daniel Gonzales, who created the latter.

Wong said the pieces were more than just love letters to L.A. and its hot sauce. Here, in a town where some people tattoo the rooster and sombrero man logos onto their skin, hot sauce gets mixed up with ethnic identity and local pride.

"I also think some of the artists are addressing the shifting demographics, are addressing what it means to be an Angeleno, are addressing what it is to be a person of color," Wong said, "that has a culture that is being consumed."

But back to the hot sauce: What does the breakfast crowd back at the Saugus Café think?

One recent Saturday morning, Robert Sanchez sat with two bottles of hot sauce, Tapatio and Tabasco. He called himself a Tapatio man.

“Everybody will tell you this, that every Hispanic or Latino will always stick with Tapatio," Sanchez said.

At another table, Dan Taylor talked about cooking with Sriracha, which he adds to "anything I can!" he said, laughing.

But like true hot sauce lovers, both said they like different sauces for different things. Taylor might cook with Sriracha, but he loves Tabasco on his eggs, as evidenced by the bottle in front of him. And Sanchez, in spite of his bottle of Tapatio, was experimenting - mixing Tabasco with ketchup.

Which is good news for the Louisiana heavyweights. In its efforts to compete, the nearly 150-year-old Tabasco has added new flavors to its line of hot sauces, including its own recently-released brand of Sriracha (which is not a brand name) sauce.

"Our innovation process is informed by food and flavor we’re able to offer new products that appeal to a global consumer and integrate with every culture and cuisine," wrote McIlhenny's President and CEO Tony Simmons in an email to KPCC. 

The hot-sauce giant knows that at every diner, there are consumers like Sanchez and Taylor, who like all kinds of hot sauce - including theirs.

"Twenty years ago, Tabasco usage studies found that if the average American consumed hot sauce at all, they might know of one or two varieties," Simmons wrote. "Today they have a different sauce for every eating occasion."