Lawsuit Against Sriracha: Affliction or Blessing in Disguise?

It was 9:40 on Saturday morning, visiting cars had filled up the parking lot of Huy Fong Foods, Inc., in Irwindale, California.

“Good morning, please register here and wear the cap,” a staff person said before handing a red disposable bouffant cap to every visitor in line. Wrapped in the cap are a tour guide and free tickets for a 9-ounce bottle of Sriracha Hot Chili Sauce, a green Sriracha-themed T-shirt and a Sriracha flavor ice cream.

A banner reading “No Tear Gas Made Here” was hanged over the exit gate of Huy Fong Foods, Inc. The same slogan was printed on the T-shirt on David Tran, the founder and CEO of Huy Fong Foods, Inc., and on every other staff workers’.

Almost shut down due to the lawsuit on its sickening odor emission, Huy Fong decides to fight back by opening to the public and proving that the allegation is false. Unexpectedly, this move turns the company into a tourism landmark and harvests more than just support from visitors.

Since August 22, Huy Fong Foods, Inc., has expects over 10,000 visitors to its open house event on every Saturday.

“We didn’t have so many visitors even at the first one,” said David Tran, the CEO and founder of Huy Fong Foods, Inc. On October 4th, over 1,500 people flooded to the factory. From 10 a.m. till 4 p.m., the 70-year-old millionaire greeted visitors at the building entrance, signed autography, and posed for photos.

David Tran is taking pictures with visitors.

David Tran is taking pictures with visitors.

Tran used to be very cautious about the secrecy of his processing lines, but now visitors can see the whole procedure of making the iconic Sriracha hot chili sauce. From chili grinding, ingredients mixing, to bottle making, filling and the eventual packaging, visitors can not only stand by the processing line to take selfies, but also talk to the workers and get to know more about the popular rooster sauce.

Tran said opening to the public is his “last resort to run the business” in Irwindale.

Even though the lawsuit has been dropped, Huy Fong is still functioning under a court injunction that bans harmful odor-causing activities. The city can go back to court to enforce its shut down at any time. “So we want to prove ‘No Tear Gas Made Here’,” said Tran.

“I’m standing right here right now. I don’t smell garlic,” said Oanh Mai, a visitor, outside the factory, “My eyes are not burning, my skin is not wrong. Even when I was in the factory when they were doing the chili, it didn’t bother me.”

“I had the tour. I’m not crying. It’s fine. It doesn’t stink. I like the smell,” another visitor agreed.

When all the visitors had left, Tran was told that on Oct.4th, they earned over $6,000 by selling souvenirs in their gift shop, the Rooster Room. The number hiked to over $9,000 on Oct. 25th, the last Open House in 2014, when the number of visitors estimated as over 1,800.

“Can you believe that? By selling the T-shirts?” Tran himself had never imagined the tour would be so profitable.

Visitors are shopping in the gift shop, Rooster Room.

The first several years were very hard. From cleaning, grinding, to mixing, Tran and several family numbers had to do every step manually. He even filled every bottle of Sriracha spoon by spoon. After the whole days of work, both of his arms are full of the pungency of chili peppers. “It hurt my arms,” said Tran. Sometimes, it was so painful that he couldn’t sleep for the whole night. At that time, his kids were still young. Tran didn’t even dare to touch them in fear of the spiciness might get on his kids and hurt them.

Another problem comes from peppers. Tran uses red peppers to make Sriracha, but red peppers take longer to ripe, so farmers usually harvest pepper when it’s still green so that they can grow other vegetables on the same land. “Every morning I went to market to find red peppers. When I had peppers, I made the sauce. When I couldn’t find red peppers, I stop,” Tran said.

Tran’s Sriracha was constantly in shortage and banks noticed its promising future. Several banks reached out to him and offered him loan to open a bigger factory in Rosemead, CA. “I only had $100,000, the bank lent me $2,100,000,” said Tran.

By that time, David had invented machine to replace most of the human labor and signed contract with Underwood Ranches to make it solely provide red jalapeno peppers to Huy Fong Foods, Inc.

In 2010, the signature product, Sriracha hot chili sauce, was named as the “ingredient of the year” by Bon Appetit magazine and the product was sold overseas. While the fan base was grew both nationally and internationally, Tran decided to begin a new chapter of his business.

In February 2013, Huy Fong Foods, Inc., moved to a 650,000 square-foot brand new factory in Irwindale. But the happiness for moving didn’t last long. As early as last September, citizens in Irwindale started to complain that the strong odor from Huy Fong Foods was causing burning eyes and throats.

Last October, Irwindale Council Member H Manuel Ortiz sent an email to other council members that read,” I just received notive that the odor at this place is vert strong. We must proceed with SHUT DOWN immediately. Remember they have another 10 to 12 weeks of full operation, how can the affected residents put up with this health problem.”

Followed were about 60 to 70 complaints, some of which indicated that residents could smell the spicy odor on Sunday morning, when the factory was not working at all.

Later that month, the city filed a lawsuit against Huy Fong Foods trying to shut down its operation. But the chili-grinding season has ended by October, there was no longer any alleged strong odors emitted from the factory.

The city didn’t give up. From February, it holds public hearing to determine if Huy Fong is a public nuisance.

“My business runs smoothly for 34 years, but last year it had a lot of problems. I got great pressure,” the usually calm and smiling businessman sighed. At one of the public hearings, Tran was so furious that he shot at the city council members with his poor English, saying, “ You have no brains. Your noses have problem.”

In May 2014, the city finally decided to drop the lawsuit in closed session and Tran also filed written commitment to fix the smell issue.

“I feel it’s a little extreme. A little overreaction on the city’s part,” said Patrick Sun while putting Sriracha on his Sriracha-flavor ice cream. He visited the whole factory and glad to find “where it’s from and how it’s been made.”

“So it makes it more personal,” Sun said. “I think they have really good PR. (It’s) a really good company.”

Tran said he had never made any commercials for the past 34 years. But now by opening to the public he got inspired that the tour can be turned into a marketing strategy to demonstrate that his product is totally “Made in U.S.”

“Our products are made from fresh chili peppers grown in U.S. and customers can get more confident in our product,” Tran said.

Currently, there are over 50 trucks of peppers been sent from Underwood Ranches to Huy Fong Foods, Inc., every day. Each truck of peppers weighs about 25-30 tons. As the dispute ironically brought Huy Fong Foods, Inc. into spotlight. The demand for Sriracha increased for 20% last year.

“Our only problem is that we don’t have enough peppers,” Tran said. Underwood Ranches has dedicated over 2,000 acres to grow jalapeno peppers for Huy Fong, but it never meets the increasing demand.

“I am looking for more land to grow peppers,” said Tran. “My goal for next year is to produce 60 trucks of peppers per day.”

“And we will do our best to stable the price,” Tran smiled and shook hands with a line of visitors.

“I really love the boss. He’s super nice and super personable,” Oanh Mai, visitor, said. “ Who does that—-Comes out on a Saturday to meet all his fans and take pictures, and sign the autograph. That’s amazing.”