Kitchen creativity plus business savvy heats up sales of hot sauce
Brian R. Ball - Business First
John "CaJohn" Hard began an Internet-based hot sauce sales business in 1997 as a hobby to teach his kids the fundamentals of commerce.
But like many of his subsequent decisions, the teaching lab sort of exploded into more than he expected.
"I swore I'd never start a family business, but I did," said Hard.
The part-time obsession has quickly turned Hard into a full-time developer, producer and marketer of 170 hot sauces, barbecues and salsas to customers nationwide.
But how does a business which grossed $7,500 its first year take in $540,000 in 2004? Sweat equity and a lot of good fortune, to hear Hard tell it.
CaJohn's began peddling hot sauces other companies produced when he started the business.
But it didn't take Hard and his family long before they began mixing a variety of peppers and other ingredients so they could sell their own blends of spicy hot sauces.
The first products, Hots Spots and Ca Boom!, came out in 1998. The business soon tapped into the salsa business.
Hard reasoned a small bottle of hot sauce can last six months or even longer while a jar of salsa can empty in a matter of 30 minutes or an hour.
"For repeat sales, salsa's the place to be," he said.
Salsa now accounts for half the company's sales.
CaJohn's fell into barbecue sauce through capitalizing on the mistake of a contract food producer on another customer's order. Hard said he bought 300 bottles of a spicy sauce - too hot for the customer's palate - for 10 cents a jar but found buyers among his base of customers with a taste for hot sauces on food.
A background in heat
Dealing in heat comes naturally to Hard. His late father owned and operated Harold D. Hard Co., a fire equipment sales and service company, until John Hard took over the family business in 1989. He sold that business in early 2004 because of rising liability insurance rates and better prospects as a purveyor of chilies and other hot food flavorings.
Hard had already moved toward a focus on the sauce business in 2002, when he invested $150,000 in a U.S. Food and Drug Administration-approved kitchen in the lower level of his business at 2040 Oakland Park Ave., Columbus. He decided against an automated bottling operation that would have doubled the investment, relying instead on a hand-bottling process which includes with shrink-wrapping the bottles' seals with a hair dryer.
The decision to produce his sauces in
40-, 60- and 80-gallon kettles has given Hard better control of meeting sales through catalogs, food shows and a handful of restaurants and specialty retailers called hot shops. But it also led to a flood of new products.
"I knew that would be dangerous because it's given me a kitchen," said Hard.
Since then, the number of products CaJohn's markets has soared from 100 to 170.
Hard said this creative flair for developing sauces comes through "a shotgun approach."
"You throw enough of it against the wall to see what sticks," said Hard. "We look to see what isn't there (in the market) and create that niche."
Hard has developed several fruit-based salsas and other specialty sauces.
Serendipity entered the scene in 2003 as Hard tried to create a white-colored hot sauce which, physically, did not stick but has caught on with consumers.
The opaque product "was so thin we did not know what to do with it," said Hard, lamenting that the sauce rolled off the food.
Hard had a jar with him when he went out to dinner one night, and he took it out when a margarita arrived at his table.
"We put it in," he said. "It didn't change the flavor or the color of the drink, but it added the heat at the end."
The company introduced the product, dubbed Frostbite, in late 2003. Last year, it became the company's No. 4 product, and Hard expects its sales to rise even higher in the next four years.
Beating the odds
CaJohn's products are marketed through a mix of Internet sales, orders through catalogs such as Columbus-based Eden Lane, and the 10 shows the company attends each year.
Those shows have resulted in numerous awards for its salsas, hot sauces and barbecue products.
In turn, those awards have helped CaJohn's to stand out in an industry that has attracted an innumerable number of people with a taste for heat but not necessarily the business acumen to keep a company rolling.
"It's just full of interesting characters," said Marie Dalby, editor-in-chief for Chile Pepper, an industry trade magazine. "These people are more interested in cooking but not as something done for sustenance."
Many of the micro-bottlers of hot sauces, salsas and barbecue begin businesses in their kitchens, she said.
"There are so many and a lot of the time people do not have a sense of what it means to go into business," Dalby said.
"You so see a lot of turnover in this market, people who just try to make a go of it and then decide it's not for them," she says.
The business requires a lot of creativity and a knack for distinguishing differences from among other products on the market.
Dalby said a recent marketing trend is playing up the variety of hot pepper providing the heat, whether it's jalapeño, chipotle or one of myriad peppers on the market.
"The flavor profiles of all these varieties have become very important," she said. "It allows the market to be both upscale and downscale all at the same time."
Dalby credits Hard and CaJohn's both with great timing and a desire to compete in the upper echelon of the market with its high-quality products.
"They're a passionate group of producers," she said. "They come to it as people who appreciate how the product works, and they market that."
The expanding Hispanic influence on American culture during the last decade is an important driver in the hot sauce market, she said, noting salsas' dominance over ketchup as a condiment.
More and more people who typically avoid spicy foods have come to appreciate a little heat.
"They're starting to understand it's about flavor, and they're considering adding something hot or bold into their regular meals," Dalby said.
Creative marketing
The intense flavors and competition in the industry have sparked a need to stand out from the crowded field.
Beyond products, Dalby credits what she calls the "fabulous artwork" accompanying outrageous product names.
"Businesses grow out-of-this-world clever ideas and specific products," she said.
CaJohn's has several CaBoom varieties and named another line of habanero-based sauces, Harold's Dangerously Hot, after Hard's father.
Other varieties include Nate Dog's Killer Wing Sauce, Queen of Farts and Sir Farts a Lot.
Several, such as the Jamaican hot sauce Kiss of Fire, are sold in fancy (and sometimes a bit provocative) bottles. The Caboom series, for instance, comes available in an optional grenade-shaped container packed in a wooden box.
One barbecue sauce nearly prompted legal action. Bailey's Irish Scream, named after Hard's grandson, resulted in a cease-and-desist letter from the makers of the Bailey's Irish Cream liquor. While Hard's legal counsel thought they could win the trademark dispute, Hard agreed to drop the word Bailey, but was a bit perplexed the liquor maker allowed him to keep the Irish Scream part of the name.
He says he rarely thinks about getting a patent on his creations because anyone who really wants to steal a recipe can figure out for themselves the secret of the sauce.
"One thing about food, if you have a good tongue, you can figure out what's in there," he said.
© 2005 American City Business Journals Inc.
