The secret to Sriracha’s* hotness
*When we speak of Sriracha, at least in the United States, we often mean to attribute the name to Huy Fong Food’s variety of Sriracha, and in this blog when I speak of Sriracha , I too will speak of this variety.
The growth of Sriracha’s popularity, an Asian hot sauce, in the United States was almost unseen and almost unheard of. Without any paid advertising efforts and what had seem to be only word-of-mouth endorsements, today, the clear-plastic rooster-branded bottles produced by Huy Fong Foods, topped off with tiny green spouts that house the sauce have become iconic household images. Sriracha has creeped not only into households but has appeared in restaurants, snack flavors, and even T-shirts all across America.
Sriracha started off occupying a niche market in America. It targeted the Asian food market and started selling its product to only to Asian restaurants. The sauce caught on among both restauranteurs and patrons, and soon, some consumers started bringing in their own bottles of Sriracha to use at restaurants where it wasn’t available. Under the network effects in play in this scenario, the restaurant owners who observed this, saw a signal that the sauce was good, and now had incentive to started stocking their own restaurants with the sauce.
Still, the scope of the Sriracha popularity was still limited to a dense cluster within the Asian-food community. It would not be until more renown Asian restaurants with stronger ties to the larger culinary industry like the Momofuku noodle bar in New York and acclaimed chefs started citing the sauce as an ingredient for recipes (even recipes that weren’t “Asian” in nature) in their cookbooks. This newfound attention spurred into adoption of Sriracha by more restaurants (both Asian and non-Asian) and even caught the eyes of snack companies like Pop! Gourmet foods who licensed the flavor. Soon after, many internet recipes and blogs began referencing the sauce. These endorsements can also be seen as pointers such as in the hubs and authorities model in which the endorsements all point toward Sriracha. These endorsements are provide high signals indicating a product is good so that in the scheme of the larger network structure, nodes (restaurants or consumers) who had not decided to buy the product in the first place now did, and the product continue to spread and spread as more nodes “turned over” to the Sriracha side.
Perhaps another reason why Sriracha has been able to grow so quickly is its price marketing strategy. Sriracha is branded with the motto of “a rich man’s sauce at a poor man’s price,” and rings true to that promise with each bottle of Sriracha priced between $1.99 to $7.99, depending on the distributor. The low price means that it will be within more people’s reservation prices, and even if it is not, Sriracha’s strong network effect serves to win over consumers. Sriracha has been able to go over its tipping point and its sales are doing well, perhaps converging to some stable equilibrium.
Sriracha’s rise to become a dominant player in the hot sauce and chili market is an impressive feat no doubt, but its success, which hinges on the spread by word of mouth, is just one of many examples explainable using the principles of network science.
Sources:
https://www.entrepreneur.com/article/246728
http://www.referralcandy.com/blog/sriracha-word-of-mouth-marketing/
nice story!