Business Overview

Ever since the Chile Pepper magazine was founded in 1990, the hot sauce niche has enjoyed a loyal and growing following. Hot sauce businesses make hot sauces for people who like their food with extra heat.

Since 2000, the hot sauce industry has grown by 150 percent. In 2017, the industry is forecast to bring in $1.3 billion. With the major players (i.e. Tabasco, Frank’s Red Hot and Huy Fong’s Sriracha) only accounting for one-third of the industry, there’s plenty of opportunity for smaller hot sauce businesses.

Who is this business right for?

Anyone who has a great hot sauce recipe may like running a hot sauce business. People who have good recipes usually are passionate about hot sauce, and a recipe that family and friends rave over might have commercial appeal.

What happens during a typical day at a hot sauce business?

A hot sauce business owner spends a lot of time making and bottling their hot sauce. When not producing or shipping hot sauce, they may clean, order ingredients and supplies, pay bills, and look for new customers.

What is the target market?

A hot sauce business’ ideal customer is someone who likes hot sauces and has some discretionary income. Such a customer might be interested in trying a new hot sauce, and they’ll have enough money to pay for a premium sauce.

How does a hot sauce business make money?

A hot sauce business makes money by selling bottled hot sauce. Bottles may be sold individually to customers or wholesale to retailers. Some businesses also offer larger bottles for food service businesses.

What is the growth potential for a hot sauce business?

A hot sauce business can be a local, one- or two-person operation. Or, it can grow to become a national or international company. Clancy’s Fancy Hot Sauce in Ann Arbor, Michigan is an example of a regional hot sauce business. Pepper Palace is a larger hot sauce company with outlets throughout the country.