I wrote a short post about Lucky Dog Hot Sauce the other day. In the post I mentioned that I didn’t know the owner of the company, Scott, very well. I figured I probably ought to do something about that as I suspect anyone who has the initiative to start his own hot sauce company is probably a pretty interesting fellow.
I got in touch with Scott and asked him to share what he has learned so far in his business venture as well as to learn a little more about him and his other interests.
About the Sauces
Why hot sauce? Where did the passion originate?
Scott: Started eating hot sauce as a kid – Dad always had many varieties in the house. While there are many I love, I never could find the perfect flavor/heat combo for my tastes. Really just started as a selfish endeavor to make something for myself, but noticed that there aren’t a lot of fresh pepper sauces out there. While more costly to make I think it’s worth doing for the gourmet quality & complexity of flavors.
How long did it take to develop your recipes? What was the hardest part?
Scott: All told about 7 years. The hardest part was getting the balance right between heat, sweet, “snappy” and salty. All 4 need to be in balance. And with a fresh pepper sauce you don’t have the lactic acid of a fermented pepper sauce (e.g. Louisiana style sauces or many Mexican style sauces) With the vinegar you have to be really careful to not overpower the sauce. Once I got the science of balance worked out, I was able to get the subtlety or “art” of it going. Only then did it started getting good!
It looks like there you have plans for three products; Red, Green and Orange. Do you have a personal favorite?
Scott: Not really – different moods for different flavors. I have recipes/plans for a 4th and 5th flavor as well, but I think starting with 3 and hitting the markets (direct web sales, farmer’s market, small grocers) is a good plan for launch. It also depends on what I’m eating – if I want a spicy steak sauce for a flavorful cut like a ribeye, I’ll reach for the Green Label as it doesn’t have habaneros, which have a fairly distinct taste. For something like a grilled chicken I might want a little more heat to compensate for the white meat. I’d happily use any of the flavors on any foods though, and all 3 kick ass on pizza and burritos!
I really like the wax bottle seal. What drove the decision to use wax?
Scott: Ha – I have short hair, so buying a hair dryer just to use the heat seals seemed silly. Plus I appreciate the style that the wax gives products. It’s intended to be an upscale hot sauce, and the wax really has a gourmet quality to it. I am hopeful that I can carry that forward into mass production. The funny thing is that I really just started doing it for fun but now it’s everyone’s favorite thing. But you know, that’s cool – it’ll cost a little more to do it, but if it passes the eye test better on a store shelf then it’s worth it. The paw-print was a customer’s idea. I suggested doing a seal on my FB page and one of my fans tossed that idea out. 5 mins later I had the stamp on order and was shipping a bottle of sauce to the guy as thanks for the idea. 🙂
What makes your sauces stand out from all of the other products out there?
Scott: As mentioned, it’s a fresh, fire-roasted pepper sauce with fresh roasted garlic. As far as I am aware I’m the only one going for that at the moment. My 1st two co-packers were convinced it would be too expensive to do it. My 3rd nailed the price and it’s do-able. Yes, more expensive than fermented sauces, but I’m not trying to compete with fermented sauces. I’m also not trying to “out-hot” anyone. I’d like to out-flavor everyone, while still maintaining a respectable heat profile. I think many of the savory sauces out there are lacking in heat, which is too bad as there are some fantastic flavors out there!
Can you give some insights on roasting peppers? How do you roast on a large scale?
Scott: When I do it I use a pretty big barrel style BBQ. I love coals and the even heat / sear they provide. I am not a fan of gas BBQs and I never will be. I use BBQ sauté pans, which are basically square stainless steel baskets about 4” deep that look like someone took a hole-punch to them. I generally stir the peppers in 5 min rotations, to avoid burning them while getting a nice char on all of them. When the peppers are uniformly cooked and charred I pull – about 15-20 mins total for something big like a jalapeño, but shorter intervals and total cooking time for something skinnier like a Serrano. This is one of the difficult issues with “going pro” – sourcing the right fire-roasted peppers. That’s what test batches are for though.
About going commercial
What type of issues did you run into when scaling up from small batch to commercial?
Scott: Oh man – many! pH testing to see if my sauce was stable (it is), Finding a co-packer (I’m on my 3rd) working with a graphic artist on label design, trying to figure out how to register a business with the state, ignoring the doubters, working with an IP attorney on the trademark – there’s a million & 6 “Lucky Dog” things out there from hot dogs to pet grooming so that was tough too. All told it’s been almost 2 years (though it’s not my FT job)
Did you have to change your recipes as you scaled up?
Scott: Yes – fortunately my co-packer is an experienced production chef, and had some great ideas. I don’t believe I materially impacted the flavor at all, but that remains to be seen.
How hard was it to find a co-packer that you liked? Any tips for someone who is looking for a co-packer?
Scott: Great, great question. The co-packer issue was the most difficult – it’s a balance between their capabilities and your scale. I’ve got a day job, so for me it was important to not exceed a certain minimum batch size. And therein is the rub…the mfgrs with start-up friendly batch sizes often won’t have the equipment needed on their production lines to make the sauce. The ones with robust production lines want you to be Heinz Ketchup and do 10,000 cases of each flavor. It’s just not realistic for a start-up. The smaller manufacturers don’t help you benefit from economies of scale like the larger ones do. For example, my current co-packer makes pasta sauces and does co-packing for other hot sauces and pasta sauces. Two of my prominent ingredients are roasted garlic & onions. Needless to say with that product line, they’re buying a LOT of garlic & onions, making it cheaper for everyone. They also do other hot sauces, so using a 5 oz woozy bottle is very affordable. Those are all important attributes to look for – you want to be able to benefit from both your co-packer’s capacity and existing business. You don’t want to be someone’s only customer for a certain container or ingredient or you’ll be paying top dollar for it.
What has been the biggest barrier to going commercial?
Scott: Time – it takes a lot of time to do everything, and with a day-job it is that much harder to get things done. For example, I need to publish my DBA in a local paper – I’ve had the docs back from the county for a week but haven’t had a chance to go in and do it. Everyone should have on-line services – it’s 2012 already! Sheesh! Also getting on the schedule – you don’t want to be with a co-packer who has no other customers, but a busy co-packer is tough too. We’re working on scheduling the 1st test batch, but with many products in production it’s been tough finding the window. It’ll happen though, I’m confident.
What have you learned in this process that really surprised you?
Scott: I’ve learned that I’m a lot more patient than I thought I was and that I get really motivated by failure. I’ve also learned that inspiration is infectious –when I get feedback from people that I don’t know saying things like “this is the best I’ve ever had!” or “better than [x-brand that I’m also a fan of] – it’s humbling and I don’t always know how to react, but those days that I don’t feel like working for 10 hours on a Saturday making prototypes seem so much more worthwhile when I get feedback like that.
The most surprising thing I’ve learned is that hot sauce people are extremely friendly and while there may be some uber-competitive types out there; for the most part big or small they’re just people like me who have a passion for hot sauce. I think evidence of that is the number of trades/barters I’ve done with them – I count about 2 dozen hot sauce makers (semi-pro & pro) as friends. They’re always very helpful & free with advice and I think that’s really cool. My hot sauce collection is beyond awesome at this point!
About the business
What are your long term objectives for your brand? Are you aiming to create a fun side business or are you planning on being the next Tabasco?
Scott: My mantra is “I’m gonna be bigger than Tabasco!” – but of course that’s just a mantra. I’m going to first launch with a limited effort and see where it takes me. If it sells, I’ll then move on to phase II.
Where did you learn everything you needed to start this venture?
Scott: Combination of self-taught, working with co-packers, and school of hard knocks. Believe me, I made a lot of bad sauces before I made good ones. And every now & then I’ll still get a stinker – but that’s how I get better, try new things, evolve.
You had a post the other day that you were finally able to determine a price for your sauce. I was curious if you could provide a rough estimate of the cost distribution. 25% ingredients, 25% bottles and labels, 50% manufacturing cost?
Scott: Tough to say exactly. Labels are cheap – pennies/bottle. Bottle costs benefit from economy of scale bigtime. Most of my costs are in the ingredients and service fee for the packing/manufacturing. Probably 55/10/35 if I were to apply your percentages to it. Fresh fire-roasted peppers, fresh roasted garlic – they aren’t cheap. It’s also why my sauce will likely have a $5 price point as opposed to Tapatio’s $0.99 but it is what it is. (and FYI, I 🙂 Tapatio!)
Can you share your sales plan? Online only, retail outlets, famers markets, looking for distributors, etc?
Scott: I plan to start with a limited number of small-ish gourmet-ish stores, (hopefully 50-70), do local Farmer’s Markets in the SF, CA bay area, and sell on the web. I’d also like to get into local restaurants. I’m a big believer in guerilla marketing & I’ve met the owners of a chain of Cheese Steak shops, and bar & grills in the area that are interested. Even if it’s at a loss I’d like to socialize the sauce that way. Also thanks to my brilliant graphic artist, my logo has been really popular so t-shirts have been frequently requested. That’s a work in progress as I just got the quote. If I can build a following and have moderate success with the sauce & t-shirts, then I’ll see about world domination. I should also mention that I’ve got a local distributor who’s been a huge help with referrals and resources for the last year.
Whose dog is on the label and what’s the dog’s name?
Scott: The dog on the label is not my dog. It’s a “generic lab” that my graphic artist came up with. Kind of the classic field Labrador, while my dog Lucky is actually a rescue mutt Lab/Border Collie mix who looks like a skinny lab. This is the “real” Lucky (the) dog. http://www.facebook.com/photo.php?fbid=297191613659259&set=pu.189634837748271&type=1&theater
What do you enjoy doing when you’re not making hot sauce?
Scott: Playing guitar and BBQ-ing. I have a very social group of friends and I’m a BBQ-ing fool, which really enhances my hot sauce hobby.
What are some things about you that you would like people to know?
Scott: Really that it gives me a lot of joy to know that people consider my hot sauce to be worthy of their food. I know how much people who love to cook put into making a great meal, so when I see them reaching for the LDHS over and over again it’s a really rewarding moment. If someone told me that I’d be in business for 50 years, but that I’d only break even the whole time I would absolutely do it.
Tell me a little about anysoldier.com.
Scott: Anysoldier.com is my charity of choice – it’s a great org, with everything going to the soldiers. I have a good friend who went into the service, and thanks to social media was able to tell me through FB how much base food in Korea sucked. heh
So I sent some hot sauce to him, and he shared it with his unit. After a few times I figured there had to be soldiers in other parts of the world who’d appreciate a little seasoning for their MRE’s, so I googled around and found anysoldier.com. They provide addresses (random or custom searches) in exchange for small donations to keep their site up & running. Since APOs are considered US addresses, the med-sized flat-rate USPS Priority package is perfect. I started sending care packages to the Middle East with every batch of sauce, and that’s probably close to 14 batches now. So maybe 25-30 care packages? A few times I traded hot sauce for cookies with a friend who’s a local chef, and other times I’ve hit up friends for paperback book donations. Or I’ll throw in a bag of local tortilla chips and some pickled jalapenos. And without fail, no matter how harsh the conditions for some of these guys are (think marine sniper unit, Afghanistan) they always take the time to send me an email or letter. One unit recently sent me their base’s flag when they broke camp after spending years in Diyala, Iraq. It’s $11 and a customs form – no matter how people feel about the war or politics, these soldiers are in a messed up place doing a messed up job – if I can help their day be a little better, it’s totally worth it. It’s my luxury tax for not being in that position myself.
Do you have any remorse for how the 49ers beat the Saints in the playoffs?
Scott: HELL no! I am a 49er fan, so that was the outcome I wanted. Plus regardless of who I root for that was in the top 5 most exciting football games in my lifetime. I had a house full of people, 14 lbs of marinated and/or dry-rubbed and BBQ’d tri-tip and all the beer & mixed drinks you could ask for. It was a glorious game. 🙂
Let me close with a great big THANK YOU to Scott. He is out there chasing his dream and sharing about his experiences. I learned quite a bit about going commercial and every little bit counts a LOT!
You can get in touch with Scott via Facebook or Twitter by looking for Lucky Dog Hot Sauce. When he finally launches make some plans to buy his sauce.