In today’s increasingly digitized markets, small businesses can go from mom and pop operations to household names nearly overnight. Take the food industry’s hot-ticket item of the moment, Sriracha. Changes are, anywhere from high-end sushi restaurants to specialty burger bars and everywhere in between, you’ve come across the sizzling, sweet chili-paste Asian sensation in some capacity. However in Sriracha’s swift global expansion, many consumers may have missed the underlying reason why the fiery condiment is readily available everywhere from supermarkets to gastro-pubs. The sauce’s popularity is key of course, however Sriracha’s founder, David Tran, opted not to secure a trademark before his business took the culinary limelight by storm, and now his signature flavor is being emulated by industry giants from across the spectrum. From Frito Lay to Heinz, Tobasco to Frank’s Red Hot, everyone is offering their take on Tran’s green-capped chili-made concoction, and Tran isn’t seeing a dime in royalties.
Many of the food-industry’s marketing heavyweights are left scratching their heads over the seemingly careless mistake by Sriracha’s founder, wondering what kind of delectable dynasty may have been squandered without a trademark to protect the product in place. With the market now being over-saturated by imitation attempts, many believe that without a trademark attached to Tran’s brand, Huy Fong Foods, the producers of Sriracha, will not be able to secure one this late in the game.
Ask Tran if he is losing sleep over what most insiders consider to be a huge misstep, his response would be quite to the contrary. In the last two years alone, the original product’s sales have jumped from $60 million to $80 million, confirming Tran’s belief that all the competing takes on the pungent pepper paste are just leading consumers to try the original and form their own opinion. Tran, a Vietnamese refugee who build his family-owned production imprint Huy Fong Foods, from the ground up, sees copy attempts as free marketing for a company that otherwise never had an advertising budget.
The question remains however: If Tran hadn’t failed to secure a trademark for his product, what kind of cash crop would this sweeping Sriracha-craze have the potential to be? Although Tran could begin the uphill battle to trademark his product, many believe that the term has become too diluted, and its ultra-common use now makes Tran’s sauce ineligible to trademark the name Sriracha. And although some brands have opted to partner with Sriracha rather than try to compete, Tran doesn’t charge these collaborators royalty fees either, he merely asks that they stay true to Sriracha’s flavor.
In the end, this may have not been a complete misstep on David Tran’s part. The bottle’s now iconic rooster logo and simple green cap are trademarked and protected, and although the scorching red chili sauce is free game for anyone to try and recreate, it doesn’t seem to be hurting Huy Fong’s profit margins at all. In fact at this point, it may just be critical part of the business model.
Via: LA Times