It’s not just you. Sriracha is hard to come by these days — at least for one popular brand.
The shortage of Huy Fong Foods’ Sriracha, the beloved red hot sauce packaged in those green-capped bottles, isn’t new — with the company pointing to a scarcity of chile pepper supply for several years now. And as frustrated fans continue to face store shelves missing the Huy Fong name, third-party resellers are punching up prices.
Huy Fong Sriracha, which used to go for under $5 or $10 a bottle, is now selling for shocking amounts in some listings posted to sites with vast third-party marketplaces — including Amazon, eBay and Walmart. Many are simply sold out.
For those still in stock, prices range depending where you look. As of Thursday morning, for example, ads for a single 17-ounce bottle on eBay stretched from around $20 to a whopping $150 — contrasting significantly with the price tags of other hot sauce brands, which don’t appear to have the same level of supply troubles.
Huy Fong told The Associated Press this week that it continues to be beset by shortages of raw materials, echoing a similar scarcity last year when the company temporarily suspended sales of Sriracha and other popular products like Chili Garlic and Sambal Oelek.
Huy Fong said Wednesday that “limited production” resumed recently, although the California company didn’t specify by how much or provide an estimate of when it believes suppliers will be able to deliver an adequate number of peppers.
“Because we do not sell directly to retail/market levels, we cannot determine when the product will hit shelves again and/or who currently has the product in stock,” Huy Fong said in a prepared statement. “We are grateful for your continued patience and understanding during this unprecedented inventory shortage.”
Here’s what you need to know.
Why is there a Huy Fong Sriracha shortage?
Some experts say that Huy Fong’s shortage is partially a consequence of climate change — pointing to weather shifts and extreme drought in Mexico and the U.S. Southwest, where Huy Fong sources all of its chile peppers.
“The main culprit here is a shortage of their primary ingredient, the red jalapeño chile pepper,” said David Ortega, a food economist and associate professor at Michigan State University. “And that’s due to climate change and the mega drought.”
These peppers are typically grown under irrigation, with a lot of water drawn from the Colorado River — which has reached unprecedented low levels over recent years, Ortega said. The region has suffered insufficient rainfall and reduced run-off from snow pack.
Huy Fong’s troubles with chile supply aren’t new. When the company suspended sales last year, it pointed to a 2020 email warning of a chile pepper shortage, noting that a lack of supply had become more severe due to recent weather conditions.
But while climate change impacts agriculture as a whole, it’s “not the whole story” for the current Huy Fong Sriracha shortage, said Stephanie Walker, extension vegetable specialist and professor at New Mexico State University. She speculates that Huy Fong may not have enough suppliers with different farmers — and could be looking to build relationships with new growers.
“Last year (Huy Fong) just couldn’t get the jalapeños that they needed,” said Walker, who also specializes in chile pepper breeding. She noted the contrast to other brands’ supply. “It really does come down to relations that individual processors have with their grower base.”
She added that it looks like this year will be a strong season for jalapeño and other chile growth in the region.
Where does Huy Fong get its chile peppers?
Huy Fong, which was founded decades ago by David Tran, currently sources its chile peppers from various farms in California, New Mexico and Mexico.
Before sourcing from these farms, California-based Underwood Ranches was Huy Fong’s sole supplier for nearly 30 years. The partnership collapsed in 2017 following a financial dispute. Two years later, a jury determined that Huy Fong breached its contract with Underwood Ranches and also committed fraud — awarding Underwood $23.3 million.
In a phone interview Thursday afternoon, Craig Underwood, owner of Underwood Ranches, disagreed with the drought and climate change explanations for Huy Fong’s shortage — arguing that Tran “has not rebuilt his supply chain the way he needed to.”
According to Underwood, there has continued to be a steady supply of jalapeño peppers from Mexico. Underwood Ranches, which now sells its own brand of Sriracha, also started producing red jalapeño peppers again this year — in part because of the Huy Fong shortage, he added.
“The demand for our product has increased rather dramatically,” Underwood said.
Prices skyrocket
The erosion of Huy Fong’s available supplies has rocked the prices of the brand’s Sriracha that is still available. In many places, the bottles are simply sold out — giving leverage to resellers listing the now hard-to-find and highly sought-after product.
Another market force at play is consumer behavior, in this case, hording. The panic around potentially losing access to a desired product leads many people to buy more than they would typically need, as was seen with toilet paper at the beginning of the COVID-19 pandemic.
“People just stock up and that exacerbates the situation,” said Ortega, also an expert in consumer decision-making. “You have an increase in demand for the product, on top of these supply shocks. And prices have really nowhere to go but up.”
Are other hot sauces facing shortages?
There’s a myriad of hot sauces, including other of Sriracha-style products, that remain easy to find at reasonable prices. Tabasco, for example, has created a page dedicated to helping customers find nearby stores that sell its brand of Sriracha — and notes that it’s been able to scale production to “meet the majority of the of surge in demand” for its sauce.
There are a few possible explanations for this, experts say. Some speculate that Huy Fong has issues with its current chile suppliers. Other brands could also use different pepper variants and source from more farms. Some might also be in a position to tinker with recipes — but perfecting sauces take a long time, as would finding a new variant, experts say.
“Growing the crop in an area less affected by extreme weather or breeding new variants of the peppers that are more tolerant to heat and require less water, if possible, at all, would take years,” Richard Howells, a supply chain expert at SAP, wrote in a blog post earlier this week.
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July 14, 2023 at 04:44PM
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Sriracha sauce is on sale for up to $150 a bottle as climate change—and a farmer dispute—cause a chili pepper shortage at Huy Fong - Fortune
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