Good interesting read. Didn’t know Sriracha was an American brand, thought it was from SEA.
It’s surprising to know that in today’s age of social media wherein companies have huge marketing budgets, there is a brand which has hardly spent a dime on marketing and relies purely on word of mouth! Just goes to show how confident the promoter is for the past several years about the product and the customer taste!
I too was under the impression that it was a THAI brand but only after researching about the product I came to know that it originated in Thai but eventually reproduced and sold by Vietnamese - American immigrant.
Imagine the profitability from the product. Just as a thumb rule, 3-5% is marketing cost. For single product the marketing cost increases. Hence let’s assume 6-7% as marketing cost. Imagine the increase in margins because of the savings. This is the reason why PE and investors want to pay him a premium. Best part is his love for the brand and hence he is not even entertaining anyone.
But the question is how long ... he was born in mid 1940s ... he might survive for few years ... hope the family has the same passion as the promoter has else we will see the brand being sold to PE and won’t be surprised if the product being charged as competitors ie USD 30 as against current price of USD 10 ... the product would lose the charm of the ownership changes.
Even if a private company acquires, I do not think they can mark up to $30, those are mostly artesanal and gourmet prices. And current price for a regular sized Sriracha bottle at any Asian or normal grocery store is ~$4, not $10. Maybe $6-7 at a high end grocery store.
That is the best part about it. These are old school guys who are less attracted towards money and more inclined towards to global good. I won’t be surprised if things change and new generation takes over.
Good interesting read. Didn’t know Sriracha was an American brand, thought it was from SEA.
It’s surprising to know that in today’s age of social media wherein companies have huge marketing budgets, there is a brand which has hardly spent a dime on marketing and relies purely on word of mouth! Just goes to show how confident the promoter is for the past several years about the product and the customer taste!
I too was under the impression that it was a THAI brand but only after researching about the product I came to know that it originated in Thai but eventually reproduced and sold by Vietnamese - American immigrant.
Imagine the profitability from the product. Just as a thumb rule, 3-5% is marketing cost. For single product the marketing cost increases. Hence let’s assume 6-7% as marketing cost. Imagine the increase in margins because of the savings. This is the reason why PE and investors want to pay him a premium. Best part is his love for the brand and hence he is not even entertaining anyone.
But the question is how long ... he was born in mid 1940s ... he might survive for few years ... hope the family has the same passion as the promoter has else we will see the brand being sold to PE and won’t be surprised if the product being charged as competitors ie USD 30 as against current price of USD 10 ... the product would lose the charm of the ownership changes.
Even if a private company acquires, I do not think they can mark up to $30, those are mostly artesanal and gourmet prices. And current price for a regular sized Sriracha bottle at any Asian or normal grocery store is ~$4, not $10. Maybe $6-7 at a high end grocery store.
Agreed and not to mention what I also liked that he isn't in it for the money. Nor have they added or plan to expand their product line.
That is the best part about it. These are old school guys who are less attracted towards money and more inclined towards to global good. I won’t be surprised if things change and new generation takes over.
I didn't know it was a US brand too