What Really Caused the Sriracha Shortage? (2024)
3 days ago
- #sriracha-shortage
- #legal-dispute
- #business-partnership
- Craig Underwood, a fourth-generation California farmer, built a thriving business supplying red jalapeños for Huy Fong Foods' sriracha sauce.
- Underwood Ranches and Huy Fong Foods had a 28-year business partnership that collapsed in 2016 over a payment dispute.
- The breakup led to financial struggles for both companies, with Underwood facing ruin and Huy Fong experiencing chili shortages.
- A legal battle ensued, resulting in a $23.3 million judgment in favor of Underwood Ranches.
- The fallout caused a sriracha shortage, leading to stockpiling and the rise of competing brands like Tabasco.
- Underwood launched his own sriracha brand, Dragon Sriracha, while Huy Fong struggled with supply issues.
- Tabasco capitalized on Huy Fong's crisis, becoming the top-selling sriracha in the U.S. by late 2023.
- Both Underwood and Tran reflect on their partnership's failure, acknowledging the lack of legal safeguards and third-party mediation.
- The former partners remain estranged, with no possibility of reconciliation, leaving both businesses diminished.