How I Disrupted The Hot Sauce Industry [Sold In Over 8,000 Stores]

Dave Hirschkop

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Published: September 9th, 2021

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Dave Hirschkop

Founder, Dave's Gourmet, Inc.

Founders

Employees

Dave's Gourmet, Inc.

davesgourmet.com

from San Rafael, CA, USA

started February 1993

Founders

Employees

Discover what tools Dave recommends to grow your business!

Constant Contact

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SurveyMonkey

Discover what books Dave recommends to grow your business!

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Hi, my name is Dave Hirschkop and I am the founder of Dave’s Gourmet and creator of Dave’s Insanity Sauce and many other products. Dave’s Gourmet is a premium pasta and hot sauce company that is a 28-year-old overnight success.

In our first year, we were banned by the National Fiery Food Show and became a media darling with the New York Times and many other media outlets eventually calling me “legendary” in the hot sauce world.

We actually sell more pasta sauce than hot sauce currently and have our sauce sitting in millions of pantries and refrigerators. The number of funny and amazing consumer letters, stories, and videos numbers in the tens of thousands. These vary from people showing how hot they can take it to fraternity and military initiation rituals with our sauce to incredible gourmet recipes using our products.

You can find us in over 8,000 stores including Whole Foods, Wal-mart, Costco, Safeway/Albertsons, Kroger, Sprouts, Wegmans, The Fresh Market, Amazon, and so many other incredible retailers.

how-i-disrupted-the-hot-sauce-industry-sold-in-over-8-000-stores

What's your backstory and how did you come up with the idea?

The company actually started while I was working in my restaurant, Burrito Madness. You can see the crazy theme that runs between the two ventures. At Burrito Madness we had way too much free time, so I played with hot sauces. I discovered Chileheads, people who loved all things chile and could handle super hot heat, and I also was consistently irritated by drunk patrons. With both in mind, I went on a personal mission to create the world’s hottest sauce.

The funny thing is that I was able to do it, and that sauce became Insanity Sauce. I used it initially to “control” drunks and delight Chileheads for my own enjoyment. The surprising part was that tons of people were requesting cups of the sauce. I decided to bottle it and it took off like a fiery rocket.

Confirmation bias exists and can ruin your results. Nobody wants to hurt your feelings, but you can see and hear true enthusiasm and that is your goal.

Since that time, we have launched many dozens of items. Initially, we focused on various spicy items, such as, temporary Insanity Sauce, Olives in Pain, Demented Dills, Joltin Jellies, Insanity Salsa, etc., which did okay. Then we tried buying a line of dressings, buying a line of jams and rubs, buying a line of flavored mayonnaise, and creating a line of overnight oats. None of these were commercially successful.

What was successful was when I created a line of premium pasta sauces. I looked at the pasta sauce world and saw a sea of red sauces that each tried to show they had better Italian credentials. My thinking was, why is red or Italian better? What actually tastes good with pasta and what would really make the best tasting sauce? With this in mind, I created sauces with heirloom tomatoes, wild mushrooms, butternut squash, and other amazing ingredients. My sauces were red but also orange and yellow and even brown. We used organic as much as we could afford and won a ton of awards and consumer praise.

While running the same business for 28 years involves periods of excitement and engagement and periods that feel like work, I am incredibly grateful for the success and know that luck definitely plays a part. I have come to appreciate the financial rewards, the awards and consumer feedback, and instances where there was a challenge that was overcome equally. I have come to learn that I am a competent business person and manager but am really more passionate about and excel at ideation and problem-solving.

Take us through the process of designing, prototyping, and manufacturing your first product.

One of the fortunate aspects of the food industry is that for many food items, it isn’t too challenging to create prototypes and find people to taste them. The key is to have some discipline in the process and to make sure that you are asking the right audience, and the right amount of consumers to test your product.

I used my restaurant patrons initially as a focus group and was lucky to hit the right formula. It is critical to make sure and figure out who will buy the product and have them taste it and answer questions. If you do a few hours of research on market research and questions to ask, it will have a huge payback. Confirmation bias exists and can ruin your results. Nobody wants to hurt your feelings, but you can see and hear true enthusiasm and that is your goal.

There are two items in r&d that are critical and will make a big difference for any business. The first of these I got right and that is to have a high standard. Don’t settle for good or good enough. You will have to push a product like that and it will cost a fortune. The second item, which I did poorly, is to have a system so you don’t work on an item endlessly. R&D should be grounded in strategy. What is the strategic reason for this item and what is the goal? How much time and resources will you put into this item before pulling the plug. You might want to read about Stage-Gate as a method for reference.

Describe the process of launching the business.

My business was an entertaining creative whim that became a paid hobby that became too big and became a business. This is definitely a different approach than when you start with “I want to have a business”. I didn’t have a business plan for the first year or two and the initial cost was probably less than $10-15k to start the company, which I put on credit cards.

For the first year and a half, I worked full time and did the business on nights and weekends. This was great as the business didn’t have the pressure of having to support me but it definitely was long hours. I initially used craft fairs as a source of cash and word of mouth and free media and trade shows to get the word out. I have always used contract manufacturers to make my products. This was 1993 so we didn’t have a website until 1995 and didn’t start social media until a few years after that.

You can enhance and help grow a business with these tactics, but having an outstanding product that is properly positioned and packaged is much more powerful.

The amazing part of starting a business now is there are so many affordable tools to design logos/websites/marketing documents, do market research, fundraise, create business plans, get expert advice, etc. While I bootstrapped and definitely recommend that approach, it isn’t right for every type of business and generally will build a little more slowly. Some businesses need much more expensive and involved r&d or government approvals or facilities and equipment upfront and therefore need angel investing.

Since launch, what has worked to attract and retain customers?

“It is the product stupid”, has been my internal mantra over the years. I sometimes forget this. Initially, word of mouth helped by PR/free media was how we attracted customers. Since then, we have tried influencer marketing, some email marketing, digital and non-digital advertising, trade spends (in-store discounts and promotions), and probably several other marketing tactics.

The thing about all this is that it all can and does work in varying degrees depending upon your product and how creative and disciplined you are at applying and executing it. The base of my abilities and company is on creativity and on creating outstanding products. We can execute sales and marketing tactics but we lack the discipline and commitment to do it really well. I should mention that I have ADD and I also find the detailed work of this to be mind-numbingly boring.

With this in mind, I always come back to my belief that in most instances, you can enhance and help grow a business with these tactics and I think you should but - having an outstanding product that is properly positioned and packaged is much much much more powerful. Use constant improvement and feedback to make sure that you work towards having that product. Look at data and do surveys and tweak what you have. If that doesn’t work, then do some deeper thinking and maybe research and you might need to pivot. I have seen so many businesses pivot and then skyrocket.

People, too, are also critical in attracting customers. Having the right team members that can really bond with store buyers and distributors puts you in a much better position to reach consumers. Having the right team members to talk to the public via social media, festivals and the right voice in ads is also super helpful.

How are you doing today and what does the future look like?

We have been profitable since the first year and have always run in a profitable slow to moderate growth way. In some ways, we are old school with the marketing methods we have focused upon and in some ways we are modern. We have been a virtual organization since before the pandemic, have always focused on innovative products, and have always done small digital experiments.

At this point, we are transitioning into much more of a commitment to a robust coordinated digital strategy that has some combination of unpaid social content, paid digital advertising, online sales, and online collaboration. We will digitally focus on compelling content and testing to find the most effective mix in terms of ROI and sales. Our Amazon sales have been growing quickly as have our sales on other retail sites. This will lead our strategy, but we will also be variously focused on supporting our brick-and-mortar retail sales with digital marketing. Over 90% of our sales are still in physical stores.

Through starting the business, have you learned anything particularly helpful or advantageous?

The lessons I have learned are long. Know what your goal is with the business. Know or learn your own strengths and weaknesses and what you are or are not willing to do. What is your real commitment level? Write up a plan but include contingencies if you go way off course. Think through who you want on the journey with you, who will find them, and maybe visualize what the journey will look like. Also, think through how all this might change if your life circumstances change (get married, have kids, become ill, etc.).

I am a fairly laid-back guy who doesn’t really like to manage people or spend too much time focusing on details. This meant that I needed to hire an operations person who could handle the people's side and the details of the business, so I could focus on strategy and creativity more. I also became more risk-averse over the years, which put us on more of a steady path with less ability to pivot.

There are many ways to succeed and many types of entrepreneurs who succeed in different ways, but the profile that gives you a really good chance is the committed listening scientist. This is someone who will do what it takes and will constantly talk to customers and look at data and consistently, quickly, and inexpensively tweak and improve their service or product. When they see the winning data results, then they drive hard and ignore uninformed naysayers.

What platform/tools do you use for your business?

I don’t know that we use any best-in-class tools and that is how we have learned what many of them are. We certainly do use and like Survey Monkey and Constant Contactand will probably switch to Shopify at some point.

What have been the most influential books, podcasts, or other resources?

I really don’t have one source that I use consistently but I think that the key is to consistently read about business in some way. As important as that is to allow time where you can think and brainstorm. I find that running, walking or swimming are great times to do this. I would even schedule a time to do this regularly and schedule some questions to ask yourself.

Advice for other entrepreneurs who want to get started or are just starting?

Get clear on what you want. Have a clear written plan on how you will get it. Plan to make constant adjustments to how you will do things and to your service and product. Remember you can’t do everything, so what are the 1-3 things that you or someone you can find can do really well and will get you to where you want to go.

Are you looking to hire for certain positions right now?

We are all set on our team right now, but maybe soon we'll be adding. Our internal team is small as we contract out most of what we do. That way we can focus on making amazing sauce.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!