Hot sauces have long been an active area of interest for licensing, with properties from chefs to celebrities to colleges dabbling in the category. Recently, hot sauces’ availability for outbound licensing is expanding a bit as well, especially in the food and beverage category, as the brands and their licensees take advantage of an ever-growing consumer taste for spicy and ethnic foods.
Tapatío is one brand moving into food and beverage licensing, signing Brand Central in October 2014 for this category. The company, a family-owned business in California, already works with Firefly on non-foods products such as lottery scratch-off tickets and socks.
Huy Fong Sriracha, maker of the original “rooster sauce,” partnered with tomato sauce specialist Red Gold on sriracha ketchup in May 2015, through Pop! Gourmet Foods, which also works with Huy Fong on sriracha-flavored popcorn and other crunchy snacks. Sriracha, an Asian hot sauce developed in Thailand, is an interesting case since the sriracha name is not trademarked and can be used by any company. Hot sauce manufacturers from Tabasco to Frank’s Red Hot market sriracha sauces, while Inventure Foods has sriracha-flavored products in its licensed TGIF line. Huy Fong’s product, however, is the market leader and is identified by its rooster logo.
Of course, hot sauce licensing and ingredient sales are not a new phenomenon. Frank’s Red Hot, owned by Reckitts Benckiser’s French’s division and represented for licensing by Equity Management, has long had a line of flavored steak strips with Thanasi Foods and has had other deals over the years, such as with Completely Fresh Foods for frozen chicken and shrimp appetizers. Meanwhile, Cholula Hot Sauce, made in Mexico by Salsas de Jalisco Cacu, partnered with Jack Links for jerky in 2011. And McIlhenny Foods’ Tabasco brand, assisted by IMC for licensing, has a wide variety of co-branding deals, with partners ranging from Jelly Belly to Hormel and products ranging from meats and marinades to sauces, spirits, and crunchy snacks.
Ingredient sales are typically a key component of these deals, and the product is billed as “made with,” rather than being branded. In fact, ingredient sales, along with the added exposure in new aisles of the supermarket or convenience store, are more important to the licensor than any income from trademark licensing, with the trademark often being used royalty-free.
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