Bringing the Heat

Gen Z and millennials are currently driving strong demand for hot and spicy flavors. The Specialty Food Association and Instacart (with the Harris Poll) are among the organizations that have identified hot and spicy as one of the key flavor trends of 2023. Research and Markets predicts the global market for hot sauces and condiments will increase from $172.8 billion in 2021 to $240.7 billion by 2028, translating to a compound annual growth rate of more than 4.8%; other researchers forecast growth of more than 7% per year over the next several years. And McCormick, owner of the Frank’s RedHot and Cholula brands, says demand for its heat-centric products is outpacing demand for its other flavor profiles, accounting for 20% of company sales in 2022.

Not surprisingly, hot sauce brands, many of which have long-established licensing programs, continue to add partners and expand into new areas of business. Their programs focus mostly on food and beverage categories, in partnership with both retail and foodservice partners—often utilizing the core product as an ingredient—as well as some non-food merchandise, especially apparel and novelties.

Some of the leading players include:

• The McIlhenny Company’s Tabasco brand. Last month, McIlhenny announced that it had retained IMG as its agent to add new licensed consumer goods and experiences to its existing array of licensed products. Some of the brand’s recent deals have included spicy high-protein pizza with Banza and spicy cheddar popcorn and cheese balls with Pipcorn. The brand has also lent its name to George Dickel and Southern Comfort whiskeys, Vlasic pickles, Slim Jims, Mezzan potato snacks, menu items at the Krystal sandwich chain, and many more. As for non-foods, products have included Snackles collectible toys with Zuru and apparel from Isaac Morris and Mad Engine, along with key chains, ornaments, novelties, and the like.

• Frank’s RedHot. In 2023, this McCormick brand paired with Campbell’s for spicy Spaghetti-Os (marking the latter’s first flavor collaboration) and Sabra for hummus. Other food partners have included Campbell’s Pepperidge Farm brand for Goldfish, Thanasi and Conagra Brands for salty snacks, Foundry Brands for canned bloody Mary cocktails, and Completely Fresh Foods for frozen snacks such as chicken wings. It has also paired with foodservice companies such as Hissho Sushi, Dunkin’, J&J Snack Foods, and Pizza Hut. Lifestyle products, meanwhile, have ranged from cycling apparel with Hill Killer to neon signs with Yellowpop.

• Cholula. A part of the McCormick corporate family since the parent company’s acquisition of French’s in 2020—Spicy Liquid still owns the underlying trademark—Cholula expanded into salsas and taco seasonings this year, representing the first category expansion for the brand. Its external partnerships have focused primarily on food service companies including Golden Chick, Dog Haus, Umami Burger, Qdoba, Del Taco, and Salsarita, among others, as well as lifestyle products such as cycling apparel with Hill Killer and, most recently, a five-piece, limited-edition streetwear collaboration with Uprisers, timed to celebrate the new salsas and seasonings.

• Huy Fong. Sriracha marketer Huy Fong’s many collaborators in the food space have included Aces Foods for instant ramen, Emerald City Promotions for sea salt and chocolates, Red Gold for ketchup, Spiceology for dry spices, Pop! Gourmet Foods for salty snacks, and In-N-Out Burger for menu items. Non-foods products have ranged from a card game produced by DSS Games to a scooter from Razor. (Huy Fong is credited with inventing sriracha and has dominated the market, but it did not trademark the sriracha name. This has lead other brands to enter the market—without its famous rooster logo—and take some of its share, especially since 2022 when Huy Fong started experiencing shortages due to crop and production issues.)

• Tapatío. Represented by Brand Central, Tapatío has built an extensive licensing program. Earlier this year, it paired with Straight Up Nuts for Tapatío ketchup. Other launches, some limited and some ongoing, over the past several years have included a spicy chelada drink with Bud Light, tomato juice available exclusively at Walmart from licensee Refresco Beverages, protein snacks with iWon Organics, tuna with Starkist, Dorito’s chips with Frito-Lay, pickles with Van Holten’s, noodle soups with licensee Tapatío Ramen, smoked sausages with FUD, and spicy hot chocolate ice cream with Van Leeuwen. The brand also has offered non-foods products ranging from HipDot makeup to Funko Pop! figures.

While this list features most of the key brands in the space when it comes to licensed extensions, there are some newcomers. Lola’s Hot Sauce, a small but fast-growing brand based in Iowa and sold largely in the Midwest, paired with convenience stores Casey’s in 2022 and Kum & Go this year, the first for a line of spicy nuts and pretzels and the latter for new menu items in its foodservice program. Both chains also sell the core product. The company has also sought out manufacturers to produce core extensions such as jerky and seasonings.

Raugust Communications’ monthly e-newsletter is set for publication this coming Tuesday, December 19, 2023. The Licensing Topic of the Month will examine recent news illustrating the evolution of the trade show landscape. The Datapoint research spotlight will take a look at licensing in the vibrant graphic novel sector. If you do not yet subscribe to this free publication, you can do so here.