By Nick Bosch

Editor's Note: One frustrating aspect of the fiery foods industry is the lack of definitive statistics on product sales. Nick Bosch was attempting to find out what the market share and value is of hot sauces sold in Philadelphia—a daunting task. But I think he did a great job on this report. In his own words, Nick is an “analyst in new product and service development for financial products and consumer goods.”

I. Research and Methodology

Unless otherwise noted, the research in this document is taken from Information Resources: The Total U.S. Supermarket Sales of Condiments (1997), National Association of Specialty Food Trade Report (1998), National Association of Specialty Food Trade Report (1998), United States Census Population Bureau (2009 Projected), and interviews with David DeWitt from www.fiery-foods.com. References can be found at: http://fiery-foods.com/howto/71-statistics-and-trends/1773-fiery-foods-trends-and-statistics-1990

and http://fiery-foods.com/howto/71-statistics-and-trends/1772-fiery-foods-trends-and-statistics-1999

Since the data is more than 10 years old, assumptions drive most of the conclusions. When possible, these conclusions were verified with Dave DeWitt, a noted authority in the hot sauce industry. The assumptions and the underlying reasoning are noted throughout the document.

II. Qualitative Market Research

Industry Overview

The hot sauce industry is dominated by five large players, Tabasco, Louisiana Hot Sauce, Texas Pete, Cholula and Frank’s Red Hot. Combined, these brands (along with a few smaller, but significant brands such as Chrystal, Trappey, et al.) control 80% of the market. Tabasco, Louisiana Hot Sauce, and Texas Pete are privately-held, family companies. They do not make their financial information publicly available. Cholula and Frank’s Red Hot are owned by large consumer brand management companies, Tequila Cuervo La Rojena and Reckitt Benckiser respectively. Both companies include their hot sauce brands in their food categories, so there is no disaggregated financial information for either brand.

Target Market

The average consumer of hot sauce is male, between 35 and 55 years of age. They are generally high-energy and have risk-taking personalities. These consumers tend to earn at least $60,000 per year.  Recent culinary trends have increased interest in spicy foods/hot sauce and begun to change this demographic profile. These trends include interest in ethnic foods, particularly Latin American and Asian, and in gourmet cooking techniques.

III. Quantitative Market Analysis

There are two projects for the annual industry revenue. One employs the 5% growth rate predicted by the U.S. Supermarket Sales of Condiments (1997) and the other uses a 8% growth rate predicted by David Dewitt. The resulting industry range estimate is $158,000,000 - $234,000,000 annual sales in the hot sauce industry. This range is consistent with unsupported claims found elsewhere (i.e. http://www.bhutjolokianow.com/habanero-hot-sauce/the-peppery-fad-america-sizzles-in-the-hot-sauce/). However, Dave DeWitt mentioned another estimate of approximately $300,000,00. There is no readily available information to support this claim.

There are two estimates of the annual hot sauce revenue in Philadelphia. One is based on the projected national data and the other is based on the projected spending habits. Both ranges are consistent and equally valid with an identical average.

• Range 1:

  • $3.7MM - $4.7MM

  • Average: $4.2MM

• Range 2:

  • $2.6MM and $5.8MM

  • Average: $4.2MM

5% Growth Model

Estimated annual revenue in the U.S. market (2010): $158,000,000

Growth from 1995: 108%

Sales by Region:

Sales by Outlet (Northeast):

This gives an estimated size of the Greater Philadelphia market at $3.2MM (10% of the Northeast is in Philadelphia.)