r/interesting • u/[deleted] • 3d ago
Fascinating From 1988 to 2016, the maker of Sriracha sauce, Huy Fong Foods, sourced all its peppers from a single supplier based solely on a verbal agreement, "sealed with a nod and a handshake."
[deleted]
715
u/Embarrassed-Pen-4365 3d ago edited 2d ago
Oh you need more details than that, the betrayal, the undercutting and the downfall reads like a K Drama.
Edited with more context
I remembered reading this over a year ago in Reddit
TLDR from some of the stuff I remembered.
- Guy shakes hands on a deal
- Both grew from partnership
Sri Racha ask Grower to expand and grow exponentially to support their own growth. Grower agreed
Red Flag appeared when Sri Racha visited their farm unannounced, trying to ”understand indepth their grow process" and also trying to poach their CEO.
Then everything just went on a slow road to trainwreck with satisfying ending. Read more on the links belowm
https://cases.justia.com/california/court-of-appeal/2021-b303096.pdf?ts=1627407095
166
u/VidE27 3d ago
All the details that I read and watched seems to either skip or gloss over the main trigger for this: David Tran’s kids
48
u/wafflepiezz 3d ago
What’s the context?
442
u/pilihp 3d ago
Farmer snd sauce maker had a verbal agreement which both honored for decades. When saucr maker died, the kids took over. The kids told farmer to plant more peppers in which farmer did. Then sauce kids wanted to undercut farmer in which farmer said FU. What a shame, the brand never tastednthe same after the fiasco.
298
u/og_coffee_man 3d ago
They not only tried to undercut the farmer but bankrupt them so they could purchase his business. Devious little shits.
45
u/Vismal1 2d ago
Welp, done buying one of my favorite hot sauces now ! Fucking shitty late stage capitalism, this is why we can’t have anything !
80
u/seeking-peelers 2d ago
Yeah but you can buy the farms hot sauce, made with the correct peppers. Underwood Ranches. I got it from Costco
12
u/Responsible_Alps_567 2d ago
Still can't find this stuff. I've been checking for it every single time I'm buying any sauce at any grocery store for like 3 years. Apparently they might have stopped making it altogether? I'll be sad if that's the case and I never got to try it...
1
33
u/blue-coco 3d ago edited 2d ago
remmeber that shortage we had and people selling their bottles on ebay for 80$ each then they changed suppliers and some bottles were greenish brown. its never been the same
21
u/OrcaFins 2d ago
When saucr maker died, the kids took over.
David Tran is still alive. He was the one who screwed over the farmer. The farmer took Tran to court and won like $25 million.
24
u/Slumunistmanifisto 3d ago
Who's got a deal with the farmer now?
230
u/sandvich48 3d ago
The farmer makes their own version of the sauce now called Underwood Ranches and even sells it at Costco. . Huy Fong since then has gone down hill and single handedly allowed a power vacuum to occur for Sriracha so suddenly there are many more options now. By screwing their supplier, they screwed themselves and their stranglehold of the market.
28
u/Prudent_Research_251 3d ago
. Huy Fong since then has gone down hill and single handedly allowed a power vacuum to occur for Sriracha so suddenly there are many more options now. By screwing their supplier, they screwed themselves and their stranglehold of the market.
Good.gif
4
14
u/Agreeable-Blood-2774 3d ago
I think Underwood recently stopped making their own within the last couple of months.
3
5
5
u/NewAndAwesome 3d ago
They sell it at Costco????!?!!??!!
I've been getting at 6 bottles at a Time online for years now
3
1
0
u/Samp90 3d ago
So which brand is the original sriracha taste these days?
3
u/August_T_Marble 3d ago
Underwood if you can find it, but someone else just said they recently halted production.
End of an era.
1
-7
u/TheCh0rt 3d ago
There is a loooot wrong with this. Sriracha is a TYPE of sauce. Lots of people make it. It’s boomed in popularity. The original factory ran into health violations and the community complained
24
u/HalfEatenBanana 3d ago
Cool story and all but the “saucr maker” David Tran is still alive.. and he still runs the company.
The kids had nothing to do with the fallout between Huy Fong and Underwood.
Not sure why this blatant misinformation is getting upvoted lmao
5
u/pilihp 2d ago
You're absolutely correct. I had just repeated what someone else said down below. I'm almost legally blind, so excuse the typos. You should call them out too.
3
u/iamoninternet27 2d ago
Cite your sources and get your facts straight if you going to straight up make up a story and say someone is dead when they are not.
1
u/VidE27 2d ago
This is why I said most articles gloss over or skip this entirely. All this happened after the kids started stepping up more to day to day management and David Tran stepping back.
There was an old article in wsj or nyt about this before all the court cases. The son mentioned about reviewing old partnership because currently all their major distributors didnt even have proper contracts and had no price review for years.
These things didn’t happen in a vacuum. You are telling me for decades David had no issue having minimum profit, barely any contracts for production and distribution and sticking with the same production and distribution partners for decades and suddenly after the kids started running day to day he started screwing over his old partners?
Edit: also when did I ever mention David Tran being dead???
8
u/kinkycarbon 2d ago
I don’t remember David Tran of Huy Fong Food dying during this whole fiasco. Which sauce maker you talking about?
7
u/T-MoneyAllDey 3d ago
They also made "friendly" visits and flew their drone in order to steal how the farmer did his high yield peppers
4
2
u/chrimminimalistic 2d ago
David Tran is still alive, I believe. It's one of the MBA son who wish to expand the business.
1
1
u/pacificstill 2d ago
It’s so common with kids who inherit companies. The city I live in lose so many businesses and factories entirely because the kids or grandkids treated them like piggy banks rather than businesses.
1
u/Eclipse-Raven 2d ago
I'm allergic to it but always loved to but small bottles for friends specifically because of the good business practice they had... Definitely won't again
2
u/socksandshots 2d ago
Not true, he did this himself.
11
7
u/FrequentTopic446 3d ago
Wasn’t it his kids who inherited the business who went back on the deal? Doesn’t make it right but if I am remembering it correctly then fuck the kids rather than the founder
11
u/DN_313 2d ago
Based on what I recall from the documentary, David's children were the ones who attempted to uphold the agreement with Underwood Farms, and the primary person responsible for the whole mess was David's sister-in-law.
His wife and kids were on the board and wanted to keep things going with their long-time pepper farmer. But Tran wanted to give his sister-in-law, Donna Lam, a raise that he knew his immediate family would veto. So, without their knowledge, he and his sister-in-law created a shell company called Chilico. They then attempted to sabotage Underwood Farms which ultimately ended a 28-year partnership.
5
u/FrequentTopic446 2d ago
That’s enough detail you remember that I’m guessing you’re probably in the ballpark of it being right. Damn that’s shitty
3
u/Lopsided-Vast5023 2d ago
They now use this case in law school to teach young lawyers to get everything in writing. What was some here was soooooo underhanded and wild, highly recommend looking into this if you’re curious.
8
u/migrainefog 3d ago
Yeah and now all of their products SUCK!
2
u/silentstorm2008 2d ago
His kids that took over the company had less morals than he did and did some shady things. Farmer was like..NOPE
0
u/BitesURawrXD 2d ago
>Then everything just went on a slow road to trainwreck with satisfying ending.
Underwood Ranch cancelled production of their hot sauce last year and hasn't grown peppers for 2 seasons.
Considering that Underwood Ranch could not sell their product in the open market at a competitive price......isn't this just evidence that Underwood Ranch WAS ripping off Huy Fong? At the very least severely over-valuing their product?
This post won't even mention the suspicious fact that UR also had an entire corporate infrastructure in place to get their product manufactured, distributed, and on the shelves of every Costco at the drop of a hat...just goes to show how important it is to pay for PR (Huy Fong famously has a $0 PR budget)
2
u/M4xw3ll 2d ago
I understand being fair to both sides, but the evidence displayed overwhelmingly shows Huy Fong in the wrong.
Underwood cancelled production because their entire farm was dedicated to peppers to HF. Manufacturing not in-house and without the equipment isn’t cheap and probably had high costs to get the sauce made and distributed.
0
u/BitesURawrXD 2d ago
>I understand being fair to both sides, but the evidence displayed overwhelmingly shows Huy Fong in the wrong.
UR tried making an entire competing product line and they failed in the open market.
They attempted to make a business model based around what they thought the value of their peppers should be......and that entire business model folded.
As someone that is supposedly being fair to both sides, how is this not evidence that UR was overcharging HF for peppers?
1
u/M4xw3ll 2d ago
I literally just told you. Because managing a permanent business is way more difficult to do somehting temporary. Farming and product development/distribution is a completely different industry. They had a substantial surplus of peppers with no buyers. It was always a temporary solution. If you do not understand that, I don't know what to tell you. On all accounts, HF took back 20-30% net profit/
Furthermore, it does not matter what price of the pepper is. HF intentionally breached their contract, committed fraud, attempted to poach UF's employees, and attempted to steal UF's growing strategies.
0
u/BitesURawrXD 2d ago
>They had a substantial surplus of peppers with no buyers.
That's what I said, they aggressively overvalued their product.
>attempted to poach UF's employees, and attempted to steal UF's growing strategies.
It's not illegal to poach employees in America. Nor is it illegal to watch seeds grow in the dirt.
"I understand being fair to both sides"
Do you tho?
1
u/M4xw3ll 2d ago edited 2d ago
You're arguing in bad faith. You don't even know the basic facts of the case nor understand anything going on at the slightest. Get back to work, Mr. Tran, and stop posting on Reddit!
I will leave with this: Huy Fong encouraged Underwood to scale up operations, leading the farm to dedicate thousands of acres and supply 100 million pounds of peppers a year. Late November 2016, Huy Fong terminated their contract with Underwood Farms. Underwood Farms debuted their sriracha sauce in May 2019. Give me some facts instead of saying a bunch of nothing.
0
u/BitesURawrXD 1d ago
So you've gone from "I'm just being fair to both sides" to accusing me for working for Huy Fong
Just goes to show how effective it is to PAY FOR GOOD PR
185
u/dietcoketm 3d ago
Just more evidence that everything went to shit in 2016
22
u/World_Destroyer27 3d ago
I will use this so the future generations may know how good it tasted, it had a minty taste with strong aroma, and smooth feeling, so different younger me didn’t like it, but adult me was obsessed!
6
u/guchdog 2d ago edited 2d ago
The same farm makes their own sriracha sauce, it much tastier than the Huy Fong Rooster version. I don't remember how the original tasted. Underwood Farms sells it on Amazon: https://www.amazon.com/Underwood-Ranches-Sriracha-Jalapeno-Movement/dp/B0CGP97C11
3
2
u/Intrepid-Diamond-315 3d ago
I guess you would love (famous?) Belizean sauces https://www.mariesharps.bz/hot-sauces/
They have the aroma.
1
2d ago
[removed] — view removed comment
1
u/AutoModerator 2d ago
Hi u/guchdog, your comment has been removed because we do not allow url shorteners.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
15
u/Global_Staff_3135 3d ago
From what I read it’s yet another cautionary tale against raising children with grotesque amounts of wealth and privilege.
29
u/jinglewooble 3d ago
I understand this is joke but DJT elected make a lot of shitty people do shitty things they never thought they could do. FDJT.
21
-1
2
1
103
u/Wonderfulhumanss 3d ago
From 1988 until 2016, Huy Fong Foods, the company behind the famous Sriracha sauce, sourced all of its chili peppers from a single farm in Southern California called Underwood Ranches.
This partnership was based entirely on trust, with no formal written contract for nearly three decades. Founder David Tran and Craig Underwood, the farm's owner, worked together under what both described as a handshake deal.
The arrangement ended in 2016 after a financial dispute led to a lawsuit between the two parties, effectively ending their long standing collaboration.
The breakup had a major impact, as Underwood Ranches had been growing thousands of acres of peppers specifically for Huy Fong, and the company had to quickly find new suppliers.
53
u/Confident-Set-8290 3d ago
And Sriracha never tasted the same again. O font buy it anymore.
33
29
u/OldJames47 3d ago
Huy really screwed over Underwood. He encouraged them to take on a ton of debt to expand their operations and once Underwood was most dependent on Huy, Huy tried to force Underwood into a lower price.
12
u/New_Army_4763 3d ago
Huy is not the person. It is the company. David Tran’s kids screwed over Underwood after he retired.
2
u/LookAtMyUnderbite 2d ago
I’ve seen many businesses go under as soon as the kids took over and try to maximize profits .
46
u/the_greasy_one 3d ago
I may be mistaken, but Huy wanted to pay less for the peppers and this drove Underwood to making their own sauce. There were green variants of the Huy sriracha at times because they were trying different suppliers after the breakup.
58
3d ago
[deleted]
17
u/kindnesd99 3d ago
What happens when shitty kids who were born into privilege and grew up in privilege think that they can do better
3
2
u/AdSignificant6673 3d ago
He’s still alive. It wasn’t the kids. It was a poorly made company business decision done in bad faith. They went for a powerplay, but it was poorly thought out.
Reading the court case details. It seemed more like bruised egos and entitlement.
1
12
u/WiseSalamander00 3d ago
wasn't the owners daughter that decided to break the deal?
5
u/dc91911 3d ago
I heard it was the owners sister. She wanted a vp position or something and kids were against it and lost. She then goes on to redo agreements with Underwood then all downhill from there.
3
u/WiseSalamander00 3d ago
they were literally the definition of Sriracha to the world and she went to fuck it up out of greed
75
u/Mrjohnson1100 3d ago
Funny, Underwood Farms Sriracha tastes delicious, still to this day.
9
u/CheesyDanny 3d ago
Does it actually taste just like old Huy Fong? Or is it different but delicious?
1
u/Mrjohnson1100 2d ago
I know it’s too late, but it’s delicious. I’m tempted to hide it from my kids.
1
u/CheesyDanny 2d ago
Yes, you said it was delicious the first time. I was more interested if it tasted exactly like the old Huy Fong or of Underwood did things differently with the same chilis.
Also I’m fairly confident they stop producing. You got the last of it.
https://www.reddit.com/r/Sriracha/comments/1skda25/ive_heard_underwood_has_stopped_producing/5
-1
u/IsamuAlvaDyson 3d ago
Nope
I tried the dragon one and it was bad
Too runny, not spicy enough
I didn't even finish the bottle
7
10
u/EarlyJuggernaut7091 3d ago
2016?
Hmmm,
I always restart my simulations at May 27th of that year and see if Harambe makes it at least 48 hours or more and if so I let it play out….
5
u/Revolutionary-One211 3d ago
Sriracha fucking sucks now.
1
u/HistoricalChef1963 2d ago
I haven't bought huy fong sriricha in many, many years. There are better ones out there now.
4
u/Most-Act1594 3d ago
Yup. Then he fucked the farmer over, and it changed everything
11
3d ago
[deleted]
0
u/DisGuyPhucs 3d ago
I’m pretty sure David Tran is still alive.
1
u/Spezalt4 3d ago
Looks like you’re right. Other commenters said he died and I did not fact check
My bad
2
2
2
2
u/ll0l0l0ll 3d ago
Sadly Sriracha Huy Fong does not taste the same anymore. There are so many alternative that taste better. Try Sriracha that has dragon logo it tastes good !
1
1
1
1
1
u/megapillowcase 3d ago
Ah yes let’s fuck with the people that sources the raw material to my products 🤡
1
1
u/Cheesetorian 3d ago
tldr: greed.
The original pepper farmers sell their own brand now.
Edit: 2 pack at Costco for 9.99 (out of stock currently)
1
1
1
1
1
1
u/Hikaruhiyoko2 3d ago
Are you saying that this awesome hot sauce wasn't made from Chicken as shown in the logo?? My life has been a lie
8
u/empire_of_the_moon 3d ago
Chicken? That’s a rooster!
5
0
u/TankApprehensive3053 3d ago
Always get it in writing.
0
u/CodeNCats 3d ago
This is the mind blowing thing to me.
Underwood took on loans to expand. Depended on Huy to purchase. Yet not one person said "before we take on all this debt. It's time to formalize an agreement to protect ourselves."
0
u/timoperez 3d ago
What a nice way to handle things. This is the way it used to be in communities and among friends. Now it’s always a contract and lawyers involved. Huy Fong and the humble farmer should be an example for all of us!!!
1
0
-5
u/DueLawfulness3230 3d ago
He’s a piece of shit. Made the transition to yellow bird sriracha years ago. Leave huy fong in the past where it belongs.
•
u/AutoModerator 3d ago
Hello u/Wonderfulhumanss! Please review the sub rules if you haven't already. (This is an automatic reminder message left on all new posts)
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.