4 Reasons to Chill About Sriracha's Public Nuisance Ruling

Fans of Huy Fong Foods' spicy Sriracha sauce—possibly the hippest condiment in human history—got hot under the collar last week when the city where Sriracha is made declared the smell from the plant a public nuisance. But the ongoing chili-odor dispute between Irwindale and the rooster sauce maker shouldn't affect prices or supply. And competitors looking to take advantage of the company's latest regulatory troubles aren't going to find any new openings as a result of last week's ruling. Here's why everyone can chill out:

Image: Calgary Reviews

No one's saying the plant will be shut down.

OK, there have been some Chicken Little-style reports to that effect. But that's not what was said at the city council meeting where the chili fumes were declared a public nuisance. Huy Fong says the problem can be fixed by June 1, well before the annual chili grinding season. If not, the city has the option to send its own contractors in to install odor-filtration equipment and send Huy Fong the bill—not an ideal solution, but one designed to keep the plant operating and nearby residents breathing freely.

There are strategic Sriracha reserves in place.

Huy Fong and its distributors have had shortages in the past, including one last year after regulators ordered a 30-day hold of Sriracha before distribution to comply with state health laws. Now, though, Frank Shyong of the Los Angeles Times reports that Huy Fong has enough of Sriracha's chili-pepper base in storage to last a year and a half. Distributors who were caught empty-handed during last year's stoppage have been building up their own reserves, too.

Any resulting price hike shouldn't sting too much.

It looks inevitable at this point that Huy Fong will install the required filtration equipment, at an estimated cost of $600,000. That's not chicken feed, but any expenses passed along to customers shouldn't be much more than a blip. Sriracha is already so inexpensive ($1.75/28 ounces wholesale, about $3 retail) and sold in such high volume (20 million bottles sold in 2012) that rolling in the cost of air filters won't amount to a big price hike.

The latest squabble won't give the competition an edge.

A 3-pack of 28-ounce bottles of Sriracha sells for $14.80 on Amazon. For comparison, an 18-ounce bottle of Texas Pete Cha sauce, introduced last year by TW Garner Foods of North Carolina, sells on Amazon for $13.78. Mexican hot sauce Cholula has a similar cost per ounce, retailing on Amazon for $18 for two 12-ounce bottles. Even if Huy Fong Foods were to quadruple Sriracha's price (and no one's saying Huy Fong will), it would still be less expensive per ounce than Cholula and Texas Pete. The spicy rooster still rules the hot-sauce value barnyard.

It's all cool.

Bottom line: It looks like the pepper fume problem is on its way to being solved. There are enough ingredients stockpiled to stave off a shortage, and the price shouldn't go through the roof. Foodies, grocery chains, restaurants, and distributors can chill out about their favorite hot sauce—at least until the next feather-ruffling news comes along.

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Casey Kelly-Barton

Casey is a writer and journalist who follows the consumer goods, travel, and tech industries for The Motley Fool.

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