As the cult-hit chili sauce goes mainstream, its Vietnamese refugee creator is watching sales climb and welcomes spinoff products as free advertising for his original Sriracha.
LOS ANGELES — Wander down almost any supermarket aisle and it’s easy to spot one of the food industry’s hottest fads. Sriracha, the fiery, red, Asian chili sauce, has catapulted from a cult hit to flavor du jour, infusing burgers, potato chips, candy, vodka and even lip balm.
That would seem like a boon for the man who made the sauce a household name. Except for one glaring omission.
David Tran, a Vietnamese refugee who built the pepper empire from nothing, never trademarked the term, opening the door for others to develop their own sauce or seasoning and call it Sriracha.
That’s given some of the biggest names in the food business such as Heinz, Frito-Lay, Subway and Jack in the Box license to bank off the popularity of a condiment once named Bon Appétit magazine’s ingredient of the year.
Most Read Business Stories
- Boeing's head of communications stepping down
- What cardiologists think about the Apple Watch's heart-tracking feature
- Tempted to buy a new smartphone? Here’s how to save on an upgrade
- Glowing wrists and less privacy: Technology is changing corporate events
- Coca-Cola eyeing drinks infused with pot’s CBD
Restaurant chains and candy and snack makers aren’t buying truckloads of Tran’s green-capped condiment emblazoned with the rooster logo. Nor are they paying Tran a dime in royalties to use the word “Sriracha” (pronounced “see-RAH-cha”).
“In my mind, it’s a major misstep,” said Steve Stallman, president of Stallman Marketing, a food business consultancy. “Getting a trademark is a fundamental thing.”
Tran, who now operates his family-owned company Huy Fong Foods out of a 650,000-square-foot facility outside Los Angeles, doesn’t see his failure to secure a trademark as a missed opportunity.
He says it’s free advertising for a company that’s never had a marketing budget. It’s unclear whether he’s losing out: Sales of the original Sriracha have grown from $60 million to $80 million in the last two years alone.
“Everyone wants to jump in now,” said Tran, 70. “We have lawyers come and say, ‘I can represent you and sue,’ and I say, ‘No. Let them do it.’ ”
Tran is so proud of the condiment’s popularity that he maintains a daily ritual of searching the Internet for the latest Sriracha spinoff.
The category has helped ignite U.S. hot-sauce sales, which have jumped from $229 million in 2000 to $608 million last year, according to Euromonitor.
“What we’re seeing among consumers is demand, not just for heat, but more complex, regional flavors,” said Beth Bloom, a food and drink analyst for Mintel. “With Sriracha, Huy Fong introduced a new style and a whole new category of hot sauce.”
Although Taco Bell and Pizza Hut are some of the latest national brands to experiment with their own Sriracha seasoning in tacos, nachos and pizza sauce, it’s Tabasco’s version that has Tran admittedly sweating.
“My ‘rooster killer’ jumped into the market,” said Tran, borrowing a description he saw on a food blog. “They’re a big company. They have a lot of money and a lot of advertising.”
It may be too late for Tran to successfully argue that the trademark belongs to him.
Two dozen applications to use the word have been filed with the United States Patent and Trademark Office. None has been granted for Sriracha alone. The word is now too generic, the agency determined.
Tran’s attorney isn’t so sure the same applies to Sriracha.
Rod Berman, who was retained 10 years ago primarily to tackle counterfeiters, thinks many consumers still associate Sriracha with Huy Fong. He cited a mountain of publicity, films and growing sales.
“My instinct is to want to go after the people that used the Sriracha name,” said Berman, an intellectual-property lawyer who has represented the Los Angeles Lakers, Pom Wonderful and Nordstrom.
But that’s not realistic, he says, especially for a medium-size company like Huy Fong.
“Large companies, the Mattels and Disneys of the world, try to protect everything and have the budget for that,” Berman said. “With smaller enterprises like Huy Fong, you have to pick and choose.”
That’s why Tran has gone after knockoffs of Huy Fong’s Sriracha from China. Unlike the name, Tran trademarked his rooster logo and distinctive bottle.
At the same time, Tran has signed licensing agreements with a handful of specialty producers such as Rogue, which brews a Sriracha hot stout beer packaged in a red bottle and green cap to look like Huy Fong’s signature sauce, and Kent-based Pop Gourmet, which makes a Sriracha popcorn and will soon release a Sriracha seasoning spice.
Even with these partnerships, Tran doesn’t charge any royalty fees. All he asks is that they use his sauce and stay true to its flavor.
“I wanted to bring people the real stuff,” said David Israel, chief executive of Pop Gourmet.
The Sriracha popcorn is the company’s No. 1 seller, and Israel has high hopes for the new seasoning, which took nine months to develop.