The Dying Chinatown

At 6 p.m. on a Wednesday, things were desolate outside New Great Wall Books and Culture on North Broadway in Chinatown. In the past half an hour, one customer stopped into the bookstore, buying a 75-cent newspaper.

“It maybe the worst Chinatown in America. I think it’s already in the worst situation. Cannot be worse,” said Yupeng Yu, store manager.

Businesses are struggling, and residents are leaving. The now 75-year old Chinatown in downtown Los Angeles seems to be losing visitors as well as its Chinese taste. The question is why.

“Many stores close just after 6. We are waiting to die,” said the owner of NOM-HOA Fish Market, who refused to reveal his name.

Some local workers blame the downturn on a lack of parking, others focus on the competitive edge of Chinese restaurants and shops in the San Gabriel Valley.

“Young people are leaving,” a clerk in NOM-HOA Fish Market said, “Old people cannot drive. They are left here.” He has worked there over 10 years and witnessed the demographic changes in Chinatown.

According to an urban planning report released in 2013 by University of California, Los Angeles, in the 2010 Census, almost a quarter of Chinatown’s population is above the age of 65, significantly higher than the ratio of Los Angeles County’s (11 percent).

Inside NAM-HOA Fish Market is a huge poster that states, “ NAM-HOA Fish Market Inc. moving soon to 711 ¼ New High Street, LA, CA 90012.”

“We have rented the place over 30 years. The landlord suddenly wants to raise the rent. I don’t understand. We cannot afford it anymore. We have to move,” the clerk said.

The same thing happened to residents, too. On one hand, more and more Chinese new immigrants flood into Los Angeles. Chinatown with limited space cannot harbor them anymore, so they have to find other places to live. On the other hand, high rent and crowed apartments in Chinatown force original residents to find other affordable housing.

As early as 1970s, Chinese have begun to move eastward to the West San Gabriel Valley. According to Association of American Geographers, Chinese, Taiwanese, and Chinese-Vietnamese in Monterey Park, Arcadia, Alhambra and Rosemead have comprised 46 percent of the four cities’ total population.

“I live in Monterey Park. It’s cheaper to live there. And my children can have education from kindergarten to high school without moving,” Liya, who owns a fashion shop in Chinatown, said. In her neighborhood, 8 out of 10 households are Chinese.

Moving along with Chinese people are the businesses and services. Chinese restaurants, supermarkets, bakeries and KTVs are gathering in West San Gabriel valley, forming a “new Chinatown”.

“Even many Chinese people here hang out in San Gabriel Valley at night,” Yu said, “So the stores in Chinatown cannot get so many people.”

Compared to the “new Chinatown” in West San Gabriel Valley, the restaurants and services in Chinatown have limited choices but higher prices. Many Chinese are reluctant to make purchases here.

Liya says her customers are mainly Philippines, African-Americans and whites, but she barely has Chinese customers.

“My business is fair. But the shops near me are closing one by one.” Liya said.

There used to be a shoe store facing Liya’s fashion shop, but now the door is tightly closed. A glimpse through the dusty windows reveal an abandoned mess of shoes and shoe racks.

Last June, Empress Pavilion, a restaurant popular for dim sum, was evicted from Bamboo Plaza after running for 24 years. The eviction came after a combination of low sales and unaffordable rent.

Empress Pavilion’s leaving caused a chain of shutdowns in Bamboo Plaza. Now there are only two shops still open on the first two floors.

Los Angeles Chinatown Business Council refused to talk about the current situation in Chinatown and its future development plan.

Chester Chong, president of Chinese Chamber of Commerce of Los Angeles, thinks to improve the current situation, businesses in Chinatown should be more open-minded to welcome mainstream companies like Wal-Mart, which can bring in more visitors to Chinatown.

Chong is also working actively with city council members and Chinatown community leaders to develop more parking lots. “When you have convenient parking, people will come in,” he said.

Although facing fierce competition with businesses in other Chinese community, Chinatown, Chong said, is the only place that promotes real Chinese culture.





Mother Tongue, The Upper Hand for Some Los Angeles Startups

Online food ordering and delivery service is a highly competitive industry in Los Angeles. Some startups, however, smartly take advantage of their upper hand and successfully get into the market left untouched by many bigger players like GrubHub and Eat24.

Kirin Kang emigrated from China to U.S. six years ago. Until 2013, He worked as a sales man in a trading company. In his one-hour lunch break, Kang usually spent 40 minutes on ordering and waiting for his lunch, and then the rest 20 minutes on quickly swallowing the food. Kang later found his friends, colleagues, and other working class people have the same issue.

“How I wished to have a 10-minute break after my lunch,” Kang said, “ So I though if I can order food online and someone can delivery it for me, then my life would be much easier.”

In 2014, he decided to be person who provides the convenience. Since arrival, Kang has been living in the San Gabriel Valley, where the telephone area code is 626, so he named his company as ToGo626.

“I live in the 626 area and it’s also my major market now” said Kang, “I want to do something good: bringing Chinese food beyond this area.”

ToGo626 has partnered with over 90 businesses within 2 months. Most of them are Chinese restaurants.

“Speaking Mandarin helps me a lot in this process,” Kang said. “I communicate with the businesses owners in Mandarin and translate their menus from Chinese to English.”

As most of his customers are Chinese people, Kang had both Chinese and English version of

English Webpage of ToGo626

ToGo626: English Version

Chinese website of ToGo626

ToGo626 Chinese Version





In April 2014, the biggest online food ordering and delivery site, GrubHub, initiated public offering at the price of $26 per share. It raised $200 millions in total. As the CNN Money reporting says, the company estimated to worth $2.7 billion at the current price. On the website, there are 3564 restaurants in Los Angeles partner with GrubHub.

Valley Boulevard in San Gabriel Valley harbors many popular Chinese restaurants like Boiling Point, Shanghai No.1 Seafood and Szechuan Impression. But these restaurants on can barely be found on GrubHub.

Eat24, as another big player in this industry, provides a few more Chinese food options, but still, many popular Chinese restaurants are off its list.

“Language barrier might be the reason why they haven’t opened the Chinese restaurant market for so long,” Kang analyzed.

Another startup called RushOrder shares the same notion. Like ToGo626, RushOrder focus on the Koreatown area.

“A lot of our team members, including myself, were raised in Koreatown. I still live there,” said Henry Choi, leading the sales and marketing department of RushOrder. “So we have this advantage than the bigger players in the industry — we know the area, the language, and the popular restaurants.”

With the help of the mother tongue, Korean, Choi and his team members were able to bring in 55 Korean restaurants within 3 months.

“Overall we are planning to go live with about 300 restaurants in the next a couple of months,” Choi said. “One of our goal is to provide Korean cuisine to people that may not have necessarily known about it. So if they go to the restaurant and see the menu, they might be intimidated and they don’t even understand what it is. So what we can do is we can fully translated and explain to them.”

Americans are estimated to spend $70 billion on food takeout and delivery in 2014, according to BI Intelligence. $9 billion out of that amount will be spent on online orders. Grub and Seamless merged in August 2013, and they will altogether take up 19% of the share. The rest 81% is divided by different smaller service providers.

Annual U.S. Spending on Food Takeout/Delivery|BI Intelligence

Annual U.S. Spending on Food Takeout/Delivery       |       BI Intelligence


Uber, the ride sharing company, is also trying to get a slice of the cake. Since August, 2014, it has been testing a food delivery service called UberFRESH. Currently, the service cover two areas: Westside and Beverly Hills/West Hollywood. The ordering time for lunch is between 11:00 a.m. to 1:30 p.m.; for dinner is 5:30 p.m. to 8:00 p.m.

UberFRESH claims the meals can be delivered within 10 minutes, compared to 45minuts to 1 hour of other similar services. And the delivery fee starts from $3 no matter how many meals the customer order.

Just like requesting the Uber ride, customers can order food delivery service online.

EatStreet is also an online food ordering and delivery service provider. Marcus Higgins, VP of sales, told “The reason consumers prefer online versus traditional (phone or in-person) orders is because it offers instant gratification. It’s all about being able to have the convenience to go online, look at a menu, look at the items you want and not have to wait for someone,” he continued “There are also other benefits, such as order accuracy and price checking, the elimination of any language barriers, and the convenience of already having your payment information on file, instead of having to enter it every time.”


Benefits of Ordering Online     | Statista

Benefits of Ordering Food Online | Statista

Higgin’s analysis echoes with the survey done by Statista.

The convenience brings ToGo626 around 100 orders during weekdays. “There may be more on weekends,” Kang said.

Age Group  | Statista

Age Group | Statista


Thanks to the spread of Internet and smartphone, the age of customers using online ordering and delivery service is getting younger and younger. Most of the customers’ ages are between 18 to 45 for both ToGo626 and RushOrder.

“There are students, working class people, and parents that order food for their kids at home,” Kang said.

The online food ordering and delivery service not only benefits customers, but also helps bring more orders to businesses, and the service providers, in return, generates revenue from that.

“The way our business works is that the restaurant pays us depending on how many orders we bring to them,” said Choi from RushORder. For every months, “0-25 orders, is free. 26-100 orders, is 50 dollars. Anything over 100 orders is 100 dollars”

“We actually use a delivery company. The cost that the delivery company charging us, is what the customers paying for,” Choi continued. Therefore, the major revenue of RushOrder comes from businesses rather than customers.

Unlike RushOrder, ToGo626 has a 15-driver delivery team and some volunteer drivers. “But our delivery fee is only about $0.99 per mile,” said Kang, “So delivery is actually a supplementary service.”

Kang treats ToGo626 more as a platform to promote and advertise restaurants. Most of the restaurants provide sponsorship to keep the partnership with ToGo626.

However, not every business owner is aware of the influence of the Internet. Some of them are middle aged or even seniors. The big age gap made it hard for Kang to persuade them into joining the adventure.

When communicating with some traditional Korean restaurants, where orders are written on a piece of paper and orders can only be paid by cash, Choi encountered the same problem.

Accumulated popularity and fan base help solve the problem. Not only fans help recommend businesses to ToGo626, restaurants are also reaching out to Kang to get their name on the website.

As Kang promised, ToGo626 is helping restaurants with the online ordering and delivery service, as if they have branches in different cities.

RushOrder is trying to bring in more Korean restaurants. As Choi explained, one of their goals “is to provide access to non-Korean speaking people in Koreatown. Introductin them to the food, making it convenient for them…so they can try it out.”

Kang expressed the same feeling for ToGo626.

“This is only a start. A good start, maybe,” he said, “We will start from the 626 code area. After fully developing the market here, we will explore further, providing more choices, more restaurants and more cuisines to our customers.”


Chihuo: How Foodies’ Passion Becomes a Business

Where do most Angelenos go for Chinese restaurant tips? Yelp, maybe? But a local Chinese residents would probably say, nah, never, except for finding certain restaurant’s address. But what’s their source? And how do hundreds of Chinese restaurants in San Gabriel Valley get their name out?

Chihuo, founded in 2011, is a Mandarin-language website sharing food reviews, restaurant news, recipes, deals, and other recreational information like travel tips and upcoming events in Los Angeles. Within three years, the website along with its several social media accounts has attracted over 180,000 followers and become the biggest online food influencer for local Chinese community.

Front page of Chihuo

Front page of Chihuo

Chihuo stands for foodie in Chinese. Motivated by sharing food information with other foodie friends, the founder, Amy Duan, started to post food reviews on Weibo, China’s equivalent of Twitter. On June 15th, 2011, the first Weibo was sent out and it said: “ So for the very first post, let me introduce the ‘grand old man’ of Hong Kong style tea restaurant in Los Angeles—Tasty Garden. The one located in Atlantic Times Square opens until 4 a.m. Right next to AMC Theater, it’s a great place for late supper. Main dishes include Walnut Shrimp and Chicken Curry. Porridges and noodles are also highly recommended…”

Chihuo's First Weibo

Chihuo’s First Weibo

To Duan’s surprise, credibility and popularity accumulated quickly. By late July 2011, barely six weeks after its launch, despite posting only around 50 reviews, Chihuo had already drawn a lot of attention and support. “Chihuo now has 1000 followers,” Duan posted. “I am so excited! SO EXCITED! EXCITED!”

Screen Shot 2014-12-04 at 12.38.18 AM

As the fan base grows, Chihuo’s posts are also becoming more objective and formal. But what it’s doing keeps the same: sharing information.

Although Chihuo provides the similar service as Yelp does, its contents are mainly created by its own members rather than followers or fans. This feature hits home for many Chinese people. In general, Chinese people prefer to read reviews rather than generate them. That explains why many Chinese people have Yelp on their phones, but they still don’t trust it when finding a Chinese restaurant.

Chihuo’s success can partially owe to the rise of social media. Chihuo started from a Sina Weibo account and until now it still plays as a major platform to send new posts. Just like Twitter, followers can attach Chihuo in their own posts. As a result, there are a lot of interactions between Chihuo and followers and sometimes followers can contribute valuable food information.

Two year later, Chihuo had the website,, where the food reviews are preserved permanently.Download-WeChat

 Wechat, a free messaging and calling app like WhatsApp, also helps enhance Chihuo’s influence. In Wechat, Chihuo can send blog posts to every follower. As many Chinese people depend so heavily on Wechat to communication that they check the messages on Wechat every several minutes. So the posts sent via Wechat got circulated like virus.

 Within three years, Chihuo gets so influential that its food reviews can draw hundreds of customers to a restaurant, keeping them waiting in line for almost two hours only to try out the recommended dishes.

 Not only LA Chinese foodies take Chihuo as their go-to source, Jonathan Gold, the famous restaurant critic for Los Angels Times, also told Amy Duan that “I actually put your articles on Google translate.” And Gold once mentioned Chihuo and Amy Duan in one of his food reviews.

Businesses are also catching the trend. They provide sponsorship for publishing promotional food reviews on Chihuo. In 2013, Chihuo registered into a company and started to generate revenue by sharing information.

Recently, Chihuo launched another Northern California based website and started to cover food information in major cities like San Francisco.

Amy Duan, graduated from the communication management program in USC Annenberg, is now working full time as the CEO of Chihuo. Her goal is to spread the information sharing business and passion for food all over the U.S.

Indulgent Pet Parents Stimulate The Pet Industry

In Hollywood, there’s a luxurious hotel that provides three levels of modern and stylish suites, spa and wellness center, spacious playground and chauffeur service with luxurious vehicles like Ferrari, Lamborghini Gallardo, Bentley, Porsche or Rolls Royce. But it’s different from Hilton in that the customers here are all dogs.

The D Pet Hotel, opened 7 years ago, is one of the first luxurious dog hotels appeared in Los Angeles. Now it has developed into a chain hotel with two branches each locates in New York City and Scottsdale, Arizona.

The growing of luxurious dog hotel business, as an example of the pet grooming and boarding industry, is only one aspect of the overall prosperity of pet industry. According to American Pet Products Association (APPA), the total U.S. pet industry expenditures has grown continuously during the past few years. Even during the Great Recession, the sales in this section didn’t come across a decline.

Total U.S. Pet Industry Expenditures

Graph 1. Total U.S. Pet Industry Expenditures

Pet Ownership

Graph 2. Pet Ownership

The increasing number of pet ownership, the rise of household disposable income and pet parents’ willingness to pamper their pets, are the three main factors that drive the prosperous trend. As the second graph shows, bird, cat, dog and freshwater fish are the four main popular pets in households. The number of pets outweighs the number of households also shows that some families owns more than one pet. According to Alissa Cruz, the owner of D Pet Hotel, one of her customer has seven dogs in her family, and there are several others have 4-5 dogs.

Single-person households and aging population are the major forces to drive up the pet ownership. Gay couples and middle-aged housewives are also two demographics that tend to have a pet companion, the general manager of D Pet Hotel said. For gay couples, a pet is the perfect alternative to a kid. For middle-aged housewives, a pet can keep their life busy when their children are pursuing college education in another city. In July 2014, IBISWorld Industry Research Division released a study report on Pet Stores in the U.S., in which it predicts the number of pets ownership will increase at an average annual rate of 2.1% during the next five years, which also benefits the revenue of pet industry.

Graph 3. products and services segmentation

The same report shows that major spending in pet stores industry are made on the following sections, pet food, pet supplies, pet services, and live animals.

Live animals accounts for the smallest percentage as a pet is one-time purchase, but products in other segments will be purchased repeatedly during the whole pet’s life. In addition, more and more people choose to foster or adopt a pet instead of buying them from stores.

Although pet services only account for 13% percent of the total revenue, they “have been the fastest-growing product segment for the industry over the past five years”, says the IBIS report. Pet services include grooming, haircuts, baths, toenail trimming, tooth brushing, training, boarding, daycare and etc.

Thanks to the notion that pets are family members, pet parents are becoming increasingly indulgent. The rise of disposable income also enables pet owners to pamper their animal companions. That is how D Pet Hotel came into being.

Pet supplies include over-the-counter medicines, food bowls, collars and leashes, pet clothing, crushes and combs and various accessories for pets. According to IBISWorld report, this segment is mainly driven by the rising spending on over-the-counter medicine products, for the cost of pharmaceuticals and the standards of routine care has increased during the past five years.

As the largest segment in pet store industry, pet food has been experiencing a trend towards premium standards. All-natural and organic can no longer satisfy indulgent pet parents’ needs, various premium pet foods like raw diet food, weight-control food, specialized formulas for sensitive stomachs, and freshly baked cakes and cookies as treats have appeared in the market. The increasing number of pet numbers also contribute to the large chuck of revenue.

However, pet supplies and pet food segments are highly competitive. Supermarkets and mass merchandisers, like Walmart and Costco are selling  similar pet products  at more affordable price and offer the convenience of one-stop shopping, so customers are lured from specialty stores. IBISWorld report shows, from 2009 to 2014, due to the competition from supermarkets, and department stores and some online retailers, “the number of industry operators contracted at an average annual rate of 0.6% to an estimated 13,195 companies”.

Generally speaking, the pet store industry is mature. The estimated product saturation will be reached in 2019. But as pet owners tend to humanize their pets more and more, services will be further diversified and become premium. The estimated revenue annual growth in pet store industry will be 2.3% from 2014 to 2019.

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.”







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. Several golf cars worked continuously to pick up people from their parking spot and drop them at the entrance of the magnificent factory.

“Good morning, please register here and wear the cap,” a staff handed a red disposable bouffant cap to every visitor in line, wrapped in which are a Tour Guide, a ticket for Sriracha flavor ice cream and a ticket for a 9-once bottle of Sriracha Hot Chili Sauce and a free T-shirt.

Every Saturday since August 22nd, Huy Fong Foods, Inc. expects over 1000 visitors to the Open House event. On September 27th, there were over 1,500 people flooded to the factory. “We didn’t have so many visitors even at the first Open House,” said David Tran, the CEO and Founder of Huy Fong. From 10 a.m. till afternoon, the 70-year-old millionaire would wait outside the entrance to greet every visitor with smile and make pose for photos.

David 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 procedure.

The tour is free, but it brings extra revenue to the company. When all the visitors had left, David got reported that for September 27th they earned over 6,000 dollars for selling souvenirs in their gift shop, the Rooster Room.  Neither for branding nor for higher sales, David confessed opening the door to public is his “last resort to run the business” at current location.

Started in 1980, Huy Fong Foods, Inc. has been making hot sauce for 33 years. Their signature product, Sriracha hot chili sauce, was named as the “ingredient of the year” by Bon Appetit magazine in 2010 and has a huge foodie fan base nationally and internationally. But the company was not known by many people. In February, 2013, Huy Fong moved to a 650,000 square-foot brand new factory in Irwindale, hoping to begin a new page of business. But later that year, the Irwindale city filed a lawsuit against Huy Fong Foods, Inc. claiming strong odors emit from the factory have affecting residents’ lives and threatening to close the factory.

In an email from Irwindale Council Member H Manuel Ortiz sent to other council members on Oct 10,2013, Ortiz writes: “I just received notice that the ordr at this place is very 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.”

David recalled that among the 60 to 70 complaints, several indicate residents can smell the spicy order on Sunday morning, when his factory is not working at all. A little bird told David that someone was shooting pepper guns in front of some residents’ home and try to put the blame on Huy Fong.

The Irwindale city used to greet Huy Fong with warm welcome event, being considered as an example of business-friendly government by California Community Redevelopment Association and the Los Angeles Business Journal. But several months later, the government tried hard to shut down his factory without any sound proof that the odor comes from Huy Fong. What’s worse, David said the city also delayed the license for his new factory with no reasonable explanations.

In April 2014, Irwindale City Council voted unanimously to declare the spicy smell of Sriracha hot sauce production a public nuisance. At the public hearing, David was so furious that he shot at the city council members with his poor English that ” You have no brains. Your noses have problems,” he recalled. But eventually David cooperatively worked with South Coast Air Quality Management District to improve the placement and effectiveness of odor control filters.

The city holding its right to install the improved equipment itself if the order issue didn’t get better within 90 days, for David, is a dormant volcano, which can erupt at any time especially during the chili grinding season during June to November. “If they wait to install the equipment until the harvest season, I have to stop all my operations and the pepper will be wasted. I will go bankrupt,” David said.

David is highly suspicious that some scheme may be behind the whole dispute. Concluding from the sudden turn of city government’s attitude and all the troubles he has faced in the recent two years, he said maybe Sriracha’s growing demand has threatened other big companies’ market share, so they want to take me down and take away my business.

“(Huy Fong) is my second wife, my lover. I can’t love it enough. How can I share it to others?” said David. To save his business, David finally decided to open the door to public, and prove that “no tear gas” is produced in his factory.

David sent 30 VIP invitation to Irwindale city to invite all the complaints to his factory and check the odor themselves. But none of them had showed up so far. Oppositely, until September 27th, there has been over 10,000 people outside Irwindale, the city with around 1,400 residents, attended the Open House and their feedback were all positive.

“My business runs smoothly for 33 years, but last year it had a lot of problems. I got great pressure,” the usually calm and smiling businessman sighed while confessing his true feelings.

During the past 33 years, David worked hard to improve the quality of his products while keeping the price low. When he started the business, a 28-ounce bottle of Sriracha was sold at $2, but now it’s $1.75.

But the dispute ironically brought Huy Fong Foods, Inc. into the spotlight. The demand for Sriracha increased drastically. David said last year the sales of his products increased for 20% and it continues to grow.

A Fresh and Clean Game Played by Dirt Dog

Longing to have his own restaurant for years, Philip Ozaki happily left his head chef position at Plan Check Kitchen when Richard Larios and Timothy Cam made him an offer he couldn’t refuse—-shared ownership of Dirt Dog.

photo (26)

On August 1, the three welcomed the opening of Dirt Dog, whose mission is to “provide the best and unique tasting bacon wrapped hot dogs in a community oriented social environment.”

Dirt Dog locates on Figueroa Boulevard, right north to University of Southern California. What Ozaki, Larios and Cam did is simply turning the famous Los Angeles street food into an indoor business.

“It used to be street food. People have it at midnight after partying. But now we are providing the bacon-wrapped hot dogs here all day everyday,” said Philip Ozaki, Head Chef and Chief Operations Officer of Dirt Dog.

Compared to the hot dogs served by street-side vendors, Dirt Dog is using a higher quality of ingredients and coming up with more choices of flavors. It guarantees that its hot dog is made from “100% premium all beef Nathan’s 5/1 dog, wrapped in center cut bacon, topped with grilled onions & red and green bell peppers.”

photo (28)

House Sauce Dirt Dog with Dirty Fries/ By Jingyi Wang


Within the first month, more than six websites have reached out to Dirt Dog and wrote about them, including LA Weekly and Cue The Critic. This Wednesday, Jack F.M. (93.1) will also join Dirt Dog to give free hot dogs.

Bacon-wrapped hot dog has never drawn so much attention before, however, it does not make any difference to the condition of traditional hot dog vendors.

Los Angeles Times published a story suggesting that the weak economy forces more Angelenos become street vendors.

According to the research group, Economic Roundtable, 43 percent of the vendors in Los Angeles prepare and serve food-related products. Their sales can add up to $42 million a year.

Unfortunately, street vending is still fighting for its legal permission to come out of the shadow. 271 citations were issued against sidewalk vending during last fiscal year, however, the number surged to 286 only for the first quarter of 2014.

Officials’ opinion varies on legalizing street vendors or not. The major concerns are the potential costs of the enforcement system, the upcoming costs for maintaining the clean streets where street vendors operate their businesses, and also the potential tax revenue.

Prices of the merchandise sold by street vendors are usually negotiable. Therefore street vendors become the major shopping destination of many low-income families. The Economic Roundtable also suggests that every dollar earned by LA street vendors will finally generates economic impacts of $1.6 on the local economy.

Enjoying the legal permission to make street food, the three owners of Dirt Dog haven’t forgot to repay the community that supported them.  They decide that for each quarter, 10% of their profits will be put into community services.

Similar to investing the community, Ozaki firmly believe that investing the workers in the restaurant is going to reward more than what you expected.

photo (27)

All the workers at Dirt Dig are part-time workers. They work 24 to 40 hours a week. / By Jingyi Wang

“If you are treating them well, they will treat your customers well. Then more customers will be happy to eat here,” Ozaki said.

When new customers step in Dirt Dog, they will never feel lost in the menu. A waitress is always holding a menu and ready to explain everything on it. Many customers would like to spend several minutes with her before placing the order, and end up having the most satisfactory choice.

On Yelp many reviews mention their superb customer service, one of which even writes: “Customer service at its finest!”

Screen Shot 2014-09-16 at 4.57.53 PM

Ozaki, Laoris and Cam are glad to see that their investment is paying back. “It took us 2 months to hire people,” Ozaki said. “We interview 3 or 4 people everyday,” Laoris added.

Finally they hired 15 workers, and offered them salary all above the minimum wage.. When talking about the possible rise of minimum wage from $9 to $15, he admitted that the major cost of Dirt Dog is on labors. The cost on ingredients and marketing only account for about 10% of its whole spending.

“But we are ready to pay them more and we have already paid them more than most of the businesses here,” Ozaki said. He said after the workers in nearby businesses getting to know that they offer a better salary, there are new workers come in everyday to seek their job. And he has already hired more than four workers who used to work for their neighbors in the plaza.

“Even the manager of Five Guys wants to come here,” Ozaki said proudly.

Dirt Dog now opens from 11 a.m. to 10 p.m. but in two months, Ozaki said they will start to open at 7 a.m., serving breakfast and getting license to sell liquor for the late night hours.

No matter how the economy changes, the three owners are very ambitious and confident about Dirt Dog’s future.

“We definitely have a backup plan and but for now we are doing alright and the sales is getting better and better,” Ozaki said confidently.



Durable Goods Orders, a Barometer of Economic Confidence

The Advance Report on Durable Goods Manufactures’ Shipments, Inventories and Orders is a monthly report released by U.S. Census Bureau, part of which indicates dollar value of new orders of durable goods made by more than 4,000 manufacturers. These goods are expected to have a useful life of at least three years and higher prices. They include defense aircraft, automobiles, furniture, computer equipment and etc.

Businesses are not doing that purchase so often. Once paying a huge amount of money, manufacturers are expecting a long useful life from these goods and showing confidence in the economy, otherwise they will held the decision until the economy is promising enough.

The orders of durable goods placed by manufacturers can cause a chain of economic changes. Since the durable goods are often purchased to replace the old ones or as supplements, a higher efficiency and more supply can be expected. As supply produces it’s own demand, consumer purchase usually rises while manufacturers providing more goods. Workers in the supply chain will have more working hours and lead to the change of non-farm payrolls. In a long run, when the supply-and-demand balance has been affected, it will further place an influence on inflation or deflation.

Similarly, shipments of orders will increase the need for transportation businesses. In addition, the change of shipment/inventory ratio will also affect the supply-and-demand balance.

The index of durable goods orders has long been used as an important barometer of economy. As the graph below shows that the Durable Goods Orders are correlating to the changes happened to GDP.

Consumer Durable Goods New Orders and Real Gross Domestic Product

Consumer Durable Goods New Orders and Real Gross Domestic Product

When the unemployment rate is reverted, it shows correlations to durable goods orders. It’s easy to find that durable goods orders usually drops earlier than the upcoming recessions, while the unemployment rate will lag the rise of durable goods orders after suffering from the hard times. As a result, the durable goods orders indicate the confidence in the economy and often predict significant economic changes.

Consumer Durable Goods New Orders and Unemployment (Inverted)

Consumer Durable Goods New Orders and Unemployment (Inverted)

The data of durable goods orders are collected and released month by month, so it’s a timely feedback and indicator for many to make their right investing decisions.

Despite all the strengths, durable goods orders are volatile due to some unexpected purchases made for transportation and defense.

For example, according to the U.S. Census Bureau, orders for manufactured durable goods in July has increased $55.3 billion or 22.6 percent to $300.1 billion. But this surge mainly comes from bookings for civilian aircraft. Boeing has said that it received 324 aircraft orders in July. The following news from Bloomberg shows how the unexpected orders affected July’s Durable Goods Orders.

Screen Shot 2014-09-03 at 1.37.45 PM

So “excluding transportation, new orders decreased 0.8 percent. Excluding defense, new orders increased 24.9 percent” for July.

Therefore, when making predictions, defense and transportation orders are often leave out. The graph below, contrasting durable goods orders with those excluding transportation and defense, shows the substantial volatility of transportation and defense.

Core Capital Goods New Orders (ex Transportations &Defense) Percent Change Since 2000

Core Capital Goods New Orders (ex Transportations &Defense) Percent Change Since 2000

As a result of the constantly fluctuating and unexpected orders from transportation and defense, the number for a particular month may not wisely suggest the change for the whole market. While, the annual changes may be more worth noticing.

Screen Shot 2014-09-03 at 11.55.52 AM

Annual Changes In Durable Goods Orders