How to Start a Hot Sauce Business

Did you know that January 22nd Is National Hot Sauce Day in America? No? Well, now you know. The history of hot sauce dates back to the ancient ages when chilies were used for nutritional benefits and to enhance the taste of food. However, back then, chili peppers would be consumed as whole corn with water and maybe a bit of herb. A bit later on, the hot sauce was invented and since then several different brands are now producing this product each with their special tastes

Here is what you need to start your hot sauce business;

Test Your Recipe

To start a hot sauce business, you first need to have a solid recipe. It could be a recipe that you randomly came up within your kitchen that you have been using for a while. Or it could be your mum’s or grandma’s favorite hot sauce recipe that you all love then you’ll have to go ask them to share the recipe with you hoping they’ll agree to it.  At first, you will want to produce a sizable amount of the hot sauce and share it with a bunch of people to get their reviews.  Once you are okay with the feedback you then need up the amount you produce to test out a couple of things;

Ingredients

Producing on a large scale means that you will need more ingredients. Therefore, you need to ensure the ingredients you use are sustainable and easily accessible throughout the year.  

Consistency

Producing on a large scale does not mean lowering the quality of the product. The taste, texture, and color of the hot sauce should remain the same all through therefore you must be precise with the measurements of ingredients and the timings.

Costing

Do market research to find out how much other brands are selling their hot sauce at then set your price. Remember, the price should not be too high as this will hinder buyers from picking your products at the store neither should it be too low since it means you will hardly be making any profits.

The cost of the finished product is influenced by several factors such as; the cost of raw materials, packaging, overhead costs amongst others.

Product Branding

Branding plays a very powerful role in every business since it is the very first contact a business makes with its clients. If you are being honest with yourself, you’ll admit that at one point you might have bought something just because of how beautifully it has been presented; I know I have.

Branding is all about the name, design, logo, color schemes, and packaging bottles. Your presentation should be able to tell a buyer what you are all about at a glance. If you can hack all this by yourself, well and good, if not, you can always hire a graphic designer to help you create a memorable brand design. All they’ll need from you is an idea of how you want the final product to look, the inspiration behind your work, dimensions you will be working with, and their sample bottles.

Get Proper Permits

Products meant to be sold for public consumption have to meet certain health and safety standards. In the labs, the sauce is checked for ingredients, nutritional value, calorie count, etc. The requirements differ from one state to another therefore you need to check with your local health department to find out the specifics around your state.

For instance, in most states, you cannot make products for commercial sale at home. In such cases, you can opt to find a commercial kitchen where you will be working from or you can partner with a food processor to manufacture and package your hot sauce. However, in other states, you are allowed to make small quantities at home for sale for example at a farmer’s market.

You will also need to get a certification from the FDA for processing and packaging acidified foods. FDA certifications are highly specialized with some exemptions therefore, you will need to do extensive research and consultation to find out what best applies for the business you intend to set up.

Register and Insure your business

Register your business with the State Department of Revenue and with the Internal Revenue Service to make your business recognized and legal.

Next, you might need to copyright your hot sauce. This can be done at your State’s Copyright Office. Without this, anyone can steal the recipe and proceed to mass-produce and sell it giving you a run for your money.

Finally, it is advisable to get insurance for your company. This helps to cushion you in case of any eventuality such as someone getting a bad reaction after consuming your hot sauce. Insurance will help pay for their medical bill without having to financially setback your business.

Find the right distributors

With everything else in place, you now have to get your hot sauce out in the market. Distributors are great at helping you get your product at local stores.

Another way of making sales is by opening an e-commerce store where you can directly sell your hot sauce to clients. Also, you can list your hot sauce at already established e-commerce stores such as Amazon. This is great for business since such stores have huge traffic every day hence increases your chances of making sales. With this, you will need to pay a certain percentage of each sale made.

However, finding distributors and listing your hot sauce is not enough. You will need to market your product extensively. Pitch to local restaurants, you can even offer them free samples to test. Set shop at farmer’s markets and offer free sampling to your clients. Marketing on social media is very effective, especially with free giveaways. Clients who like your hot sauce will contact you to buy more.

If you can, you can also run adverts on various platforms such as on YouTube, on a billboard, on television, on Facebook. You can even hire a social media influencer to advertise the product for you. People these days are always on their screens hence they are likely to come across your advert sooner or later.  

Improve your product

The market is very competitive with new entrants donning it. It is therefore very essential that you test and upgrade your recipe once in a while. Improving the product sometimes can be as easy as switching up to something as simple as the packaging bottles.

Nothing too drastic otherwise your clients might not recognize your products anymore.

Bottom line

The hot sauce niche has always enjoyed a loyal and growing fan base of people who like their food extra spicy. It is estimated that the hot sauce industry grew by 150 percent in 2017 and is projected to continue increasing. The best part is that the major players like Tabasco only account for a small fraction (one third). This means that there is plenty of room for new entrants in this industry.