Hot Takes, Hot Sauce & Wholesaling (And Whale Sperm) At Summer Fancy Foods

0:00This week on the Nosh Podcast, what trends the team sought fancy foods, why whale sperm may be coming to the salty snack aisle and how Hot Ones is heating up the condiment category.

0:22Hi everyone, I'm your host Carol Orton Byrne. On the NOSH podcast, we go inside the business of natural, organic, sustainable, and healthy food. Today, the team is back from the Specialty Food Association's Summer Fancy Food Show and reporting in on what we saw from the show floor. Joining us today are reporters, Lucas Southard. I'm happy to be back today. Happy to have you, Lucas. And Adrienne DeLuca. Good morning, Carol. Morning, Adrienne. And then finally, special guest, Shauna Golden. Wow, I'm flattered that I'm a special guest. you're always a special something to me shauna thanks you can join in anytime you want shauna i mean you know we're always recruiting four's a party and five's a crowd i don't know how those that goes i think their numbers are off there lucas i don't like lucas and shauna being on this podcast because there's too many people to roast me prepare yourself do i not roast you enough to earn that title adrian i guess i should step it up nope today is the day considering i was the one member of the show not at fancy foods i think my role will just be to roast you throughout the episode stay tuned everyone i'm excited you all are fired well lucas shauna you both attended the show with me uh how are you holding up i think i still haven't fully digested all the cheese I consumed to be totally honest I'm just surprised that I um you know didn't consume anything I'm allergic to for the most part I am happy to still be alive and well I heard you may have eaten some granola that was going to kill you um yes I also um yeah there were several things but it's okay I'm with you uh Carol I I definitely I went on a search for vegan cheeses in the the upstairs which i feel like was mostly only cheese and yeah it just was me walking around just eating a little bit of cheese and charcuterie from like every one of them and let's just say the train ride home uh that evening was uh my stomach was not happy with me i was i was in pain instead of like mints they should just leave like little packets of lactate like out in that whole aisle.

2:51This is what fancy food will do to you. You eat way too much dairy, or if you're Shauna, you have to look at every single label unless you want to dive in a, you know, allergic reaction. It's a minefield out there. And yet she still texted me, I ate something I shouldn't have, but don't worry, my throat's only a little itchy. In addition to way too much dairy, I might attribute the stomach pains to about the 200 chili crisps I consumed on the show floor. I'm kind of calling it the fly-by Jing effect, not in reference to Me Too products, just that I think companies were emboldened by the fact that Jing has made a regional staple so popular.

3:34And now they're looking to do the same with their respective condiments. So Homia had their Sambal Chili Crunch. Then we had Salsa Matcha from Chingonas. and finally even Thai chili crunch from Curry Love. So lots of options on the show floor, all of them pretty tasty. Does make me wonder how much space on the shelf there is and where this category is going to eventually wind up slotted in. Yeah, I agree. I had some good chili crisps condiments as well. I really liked a brand called Capitana who make salsa matcha. They're based out of, I think it's Norwalk, Connecticut. And this is, they're kind of, the founder, I believe her name was Alma, was telling me that there hasn't been until recently as much of a market for like an oil-based salsa.

4:32Although it's a very common thing in Mexico and other Central American countries. Though she is, you know, mixing things up a little bit. I think she had one with cherries, one with figs. That sort of begs the question, you know, how authentic do you go or how her slogan is authentic and artisanal. So how far do you kind of go adding unique ingredients that maybe make you stand out, but at the same time are not typically found in a salsa matcha? I think in terms of like where how much room there is in in CBG for these products. I mean, I think being a condiment, although, you know, you might not find the use case all the time, you can kind of pair it with a lot of things.

5:17Like she was serving hers with, you know, chips and guacamole and just putting a little on top. And I was like, that's great. But you could also put it on, you know, on a taco. You could also put it on your mac and cheese. you can really use a kind of chili crisp or salsa matcha or any of the kind of different iterations in a variety of different foods. And I think that brings that use case out into a lot of different avenues. Yeah, I agree. That's exactly kind of what I was gonna say, Lucas. Oh God, I got to it first. Yeah, you did. You stole the words right from my mouth. But I do feel like adding unique ingredients like cherries or figs, it's just another way to differentiate yourself because how many real ways can you make an authentic salsa matcha without adding something a little special?

6:07And to Lucas's point, you can use it on a wide variety of foods as a topping. So adding a little twist definitely probably draws in consumers and inspires them, I'd say, for new use occasions. It's funny you mentioned, though, Lucas, that oil-based condiments are gaining in popularity because we actually had a salsa matcha in the pitch slam. I think it was during COVID. So it was one of our remote pitch slams. And the judges, their feedback was, well, when you say salsa, I think of like the tomato based salsa. And this is something unfamiliar. I'm not used to it. How familiar are consumers going to be aware of this?

6:48So certainly times can change. I'm excited to see the trend continue to evolve. Certainly. There's just this idea I noticed i mean you've said this to me in the past though that like you know hot sauce is always a there's always a hundred different hot sauces out there and it's hard to kind of make your name in that but i think there is an aspect of how many different kind of spicy products we're seeing and that i saw on the floor um last week that that there seems to be a kind of maybe a slight changing of american consumer taste in that like people are open to having more spicy foods and it's not just kind of your traditional you know frank's red hot as the the hot sauce or tabasco on on the table but all these different types of spicy foods that have different use occasions and applications um especially as you open it up into all these different global flavors the question though is how many of these are you going to keep open right a lot of the uh producers told me, yeah, you should keep this in your refrigerator.

7:52You know, how much shelf space does one consumer want to allot to spicy products? If the answer's me, it's a lot of shelf space. That was the hand raised. How much shelf space do you have, Carol? Revisiting a past episode of this Nosh podcast where Carol did admit she has a whole shelf dedicated to hot sauce. I do, but I wouldn't say I'm the average American. I'm a hot sauce nerd fully admit it definitely not the average american consumer as well well adrian we can't all have a pantry full of kelp i wish my pantry was full of kelp i did have some good kelp products though i i missed my um uh my date with the the kelp caviar and non-alcoholic champagne because i got pulled into a long conversation with a different booth and realized i had missed it but But there was a lot of kelp around.

8:48I'm sorry you missed all the kelp products that I saw. Having post-show kelp FOMO. Lucas, there certainly were a lot of hot products on the show floor. And while that's been kind of consistent over the years, I do attribute a lot of that to the rising popularity of YouTube sensation Hot Ones. Though it did kind of seem like brands bifurcated in one of two ways. Either they went super hot and they were just like, can you handle the heat, you know, number 10 in the lineup of hot ones sauces? Or they were much more interested in creating a flavorful kind of culinary driven sauce that paired with food.

9:35You know, maybe that is to your point about trying to get consumers to follow my lead and have a hot sauce shelf. If it pairs with food, there's more opportunities and just a lot of brands promoting at their booth that they were on that show yeah the that show actually just hit its 300th episode today i think with john mulaney to celebrate that achievement they're launching a pop-up hot ones delivery with grub hub which is kind of interesting um so fans in different parts of nyc can get i think it's three different hot sauces that they can try in a six-piece or 12-piece in Manhattan, Brooklyn, and Queens.

10:18Do they just bring you the hot sauce? Yeah. No, sorry. What pieces are we getting? It's on the wings. Have you not seen the show, Adrienne? I have, but, you know, I have to clarify. This is outside of the show. Okay. You need all the details, Carol. Oh, I thought I was going to get to roast you for something. Nope. Unroastable. Like a firewall. I wouldn't go that far. Definitely not. Well, moving on, guys, let's get back to where we started. Fancy foods, hot ones. One brand actually told me that 82 % of their business was in products featured on that series, and another told me that their hot ones featured sauce outsells their other products by six times.

11:03So that volume, really key because hot sauce doesn't have the fastest turns. Other brands told me also it's really hard to get consumers to be brand loyal in the category. So being able to make up those numbers in just straight sales can really help a brand stand out and stay on shelf in retailers. So Hot Ones is essentially a hot sauce accelerator program. Yes, Adrian. Okay. i think my favorite part of observing carol talking to all these hot sauce brands was her telling them so on their booth they would have like oh this ranks like a number six on the show and carol would be like no this is a three sorry i'm not sure we can trust carol's opinions around hot sauce just putting that out there she just seems so like not an average hot sauce consumer well apparently it stems from her growing up in louisiana yeah i mean there's there's a lot of hot things that you grow up with it's not like growing up in boston which seems to avoid all spices and seasonings you're not wrong enough of my hot takes guys or hot roasts on your part lucas you spotted an interesting trend with food service at the show tell us a bit more yeah i talked to uh a couple different brands that along with their retail CPG products have found that there was enough of a market to kind of lean into wholesale and food service, which is obviously not a bad play from a business standpoint to diversify and have a couple of different revenue outlets or paths to profitability, maybe.

12:52And, you know, so we we've talked about Dumpling Daughter in the past, I think, on the podcast. But I talked to their founder, Nadia Spellman, who was showing me that they had actually released some wholesale formats of like their their sauces. And they didn't have them at the show, I don't think, but boxes for their dumplings because she had found that there was a big market for her products in kind of the Midwest and like Michigan area where I guess it's harder to find. There's a dearth of dumpling options. Yeah, I guess there's just harder to find good dumplings out there. Nadia was hearing through one of her distributors in the Midwest that there was a number of chefs that were going to stores and actually clearing out the shelves of both her dumplings and her sauce to cook in their like restaurants and country clubs.

13:52And so she, you know, because she has some of the means of her production, although they're expanding into co-packer, started doing wholesale to some of those clients, some of those customers. And she's found that it's been very lucrative for the company. Lucas, though, you said they did have to figure out some new manufacturing processes in order to support this business. Yeah. So when I had talked to the company a couple of months ago, when they were kind of expanding into retail a little bit more, they were in about 300 stores, I want to say then. Since then, she said they're more like at like 600 to 700 stores plus the food service plus the food service so when i asked her about if she still is you know doing her own production um she said they are but they've also um been they've also have some co-manufacturing because they just have too much demand and they can't keep up with it on their own production level i think that's a smart way to go you know rather than invest in ramping up her own production, try it with a co-packer, see if they can keep up the volume.

15:06Certainly, you know, we just wrote about Ample Hills and part of what sunk them was that they built this huge factory and then realized they didn't have the volume to really make it work. So that's an expensive decision to make and you really have to make sure in advance because it takes so long to set up new manufacturing facilities that you've got the volume to make it work. Definitely. Yeah. And I think that was kind of the idea is that they didn't, they weren't quite ready to go all in on saying our production volume or our capacity always has to be at this level. It's more like right now we're doing really well and we've got all these kind of wholesale accounts that are coming on.

15:49if this is working, maybe in the long term, they'll invest in it. But for the time being, I think the smart move was, yeah, just get a co-packer that can keep you above water with your capacity and see how fast it grows. I mean, the flip side of that is that Dumbling Daughter gain notoriety for the quality of their products. When you move to a co-packer, you have to make sure they're keeping up those standards. There's a lot of dumplings that are produced by co-packers and if Dumpling Daughter can't stick to those roots, how do they differentiate themselves from everything else on the market? Yeah, it's a real concern, but I mean, I would imagine because they are so invested in their authenticity and in the process of how they make them that, you know, they're pretty discerning on what partners they choose.

16:45But yeah, it's definitely something to keep in mind as you relinquish control of some of your production, you do have to sometimes make those concessions. Dumbling Daughter is pursuing food service now, but as you alluded to, Lucas, this whole idea came out of the concept of diversifying their revenue streams beyond the restaurants themselves. And other brands were doing the same thing and showing that off at fancy foods. We saw Magnolia Bakery. This was one of their first trade shows highlighting their banana pudding cookies. Those have actually been doing so well that they showed me they pulled out from under the booth the Costco box that's going to be going into club markets.

17:27They're already starting to think about, you know, what other products they could, let's say CPG-ify. And then you had Crumbs, who we did a podcast with last year. They're not even touching having their own bakeries again, they're focused squarely on CPG. One thing I loved was they've crafted these little plastic jars that look just like a bakery counter jar, but they actually nestle inside of themselves to stack on a shelf. Super cute for boutiques. A little curious to see how that does in brick and mortar retail where, you know, you can't really stack too many of them on a shelf, but certainly really eye-catching to, I think, Shauna and myself.

18:15I wish I had seen that, you know, little glass jar packaging. I feel like I'm already visualizing it, you know, merchandised in various areas of a grocery store. I could even see it like they have bakery sections. Definitely gives crumbs like some room to play there. And knowing you, Adrienne, you would repurpose it for something really cute. Oh, of course it would be, you know, back up on the shelf with like, who knows, plants in it probably. Is this considered pantry porn? What was the one? Yes, definitely. Catching on. I know. I've got all the alliterative cool terminology. But I do think, you know, as you mentioned, Carol, it's interesting to see these bakeries looking to, as you stated so eloquently, CPG-ify.

19:03their products because you know during the pandemic we saw no one was going into these storefronts and bakeries and yes online ordering may have kept them afloat for a little bit but having just these different revenue streams in cpg and food service and delivery definitely will help you know a smaller bakery not that magnolia or crumbs is considered a smaller bakery but you know someone that's known for one specific product continue to evolve and grow their business. So I think it's definitely been a consistent trend that I know I've seen at past few fancy food shows I've attended, even across categories outside of bakery.

19:43Yeah. If you can hand that over to co-manufacturers like Dumpling Daughter, that even removes a lot of the heavy lift off of you. Other products like some of the salsa matchas were made by restaurants who express that, you know, making a big batch of salsa matcha, is it too difficult to scale up that recipe? It has a long shelf life so they can do it every couple of months, make a ton of jars and then just float those through retail. I will say I was having a lot of FOMO scrolling through social media, watching you all post about what you were seeing at the show. I'd say some of the products I saw had brought a bit of shock value to them.

20:27Do you guys, what was like the wildest thing you saw while walking the aisles of this fancy foods? I mean, I'll start because I think I was most enamored with vegan Rob's questionable new product. It's not on the market yet. They said they were hoping to release it in the fall. Although as I've heard from Carol, they've, they've tricked her in the past. They've got me. Yeah. Yeah. So this might've just been them trying to draw attention to their booth for their, you know, their puffs and whatnot. But they were prominently showing and tasting a new tortilla chip that were called whale sperm chips.

21:08And so, again, I have not fact checked this, but supposedly whale sperm is used in a lot of collagen based products. and Vegan Rob's is making a vegan collagen tortilla chip that they are playfully calling whale sperm chips, which, you know what? It drew me in. So they won on that front, even if it's not going to hit store shelves. I thought it was sperm whale chips, but you corrected me, Lucas. Yeah, no, it's actually whale sperm, which - Vegan, vegan. Vegan, vegan whale sperm. That's my question. Is whale sperm considered vegan? A whale is a creature that's alive. Well, they said that they are using vegan collagen, but they're utilizing the marketing, the good or bad marketing ploy of calling it whale sperm tortilla chips.

22:06But I feel like to Adrian's point, like that must, that might be misleading if it's being marketed as vegan. I think the whole thing's misleading, to be honest. My mind immediately goes to like the is honey vegan debate. Not that, you know, honey and whale sperm are the same category, but like, you know, produced by something alive. I, you know, I think we would have to talk to Rob Ehrlich about this. But, you know, as as he was explaining to me, a lot of people don't know that collagen comes from whale sperm, myself included. I did some very, very rudimentary Google searches and wasn't able to really back up some of his claims.

22:53So I really don't know how much of this is just a shock value marketing boy, but it worked. And to be honest, whether the chips have vegan collagen or true whale sperm in them, it was a good tortilla chip, you know. So they got that going for themselves. I gotta say between working on the newsletter today and then prepping for this podcast, my search history is like egg puns. Where does Spongebob live and whale sperm? So you had to Google where Spongebob lives. That's embarrassing. You got some weird cookies floating around on your on your browser right now. Can't wait to see your Instagram ads this evening.

23:34Oh, yeah. Hopefully BevNut does not monitor this. And if you're wondering what I'm talking about, you should subscribe to the Nosh newsletter for Spongebob references and egg puns. If that doesn't entice you, I don't know what will. Or, you know, collagen driven from whale sperm. Okay, on that note, I'm going to switch over to another social media product I saw at the show. I think we got enough on whale sperm to last me a lifetime. Dave's Gourmet was highlighting their pink sauce. I know we covered this on Nosh before. It's finally hitting store shelves. For those of you not familiar with the controversy, there was this chef on TikTok.

24:25She was making pink sauce, selling it out just online, making it in her kitchen. Long story short, that was not a good idea. The nutrition facts were wrong. People were getting expired sauce. I think there was some exploding sauce. Dave stepped in. They wanted to make it very clear they did not partner with her. She is not involved in the recipe development of this sauce. I don't know why. But instead, they were sort of inspired by her and are using her as a spokesperson for the pink sauce they have launched at Walmart. And it is quite pink. Is it? Well, first of all, does it taste good? And two, or B, what is in it?

25:15I meant to go by their booth and it slipped my mind. I didn't put a note in my notebook. But I meant to taste it because I've been interested in just tasting what this tastes like. Cause you know, I, I rudimentarily, uh, you know, was following it through our reporting, but I don't have like a flavor profile that I can imagine in my head. I'm going to be honest. I didn't taste it myself. Maybe that makes me a bad, uh, editor. However, I did learn that the pink is from dragon fruit. Uh, so I'm going to guess something fruity, uh, is part of it. It's definitely like, I would call it like a fruity aioli.

25:53Nope. Yes. That's how I would assess. Glad I didn't try it then. I'm already out. You know, just it doesn't sound like something that Lucas would like to eat. And especially with all the little bites of everything that we have to eat at these food shows, I think that would just be a recipe for disaster. I mean, also that Dave's parent company owns a lot of brands right now. So they've got Dave's Gourmet, which is pasta sauce. They have Dave's, which is hot sauces and creamy sauces. Then they just acquired and apologize for my very rudimentary French, Le Balm Margot, which is like a chutneys and jam brand.

26:33So adding pink sauce on top of everything else I had already tried. Yeah, it just couldn't happen. I will try to pick up a bottle and report back. They also were sampling or at least featuring their hot sauce made by AI. So they asked chat GPT, what would be in the ideal hot sauce, asked it to make a recipe. And that's what they made. Dave's was also the booth that, um, uh, everyone's favorite early 2000s, um, reggae sensation. Uh, I'm trying to, I'm trying to figure out how to phrase this properly. Uh, Sean Kingston's mom had a, had a hot sauce there, right? uh, Mama Kingston. Wasn't that those days, right?

27:22Yes, it was Dave's. I'm intrigued by, you know, just Dave's strategy overall, because talking to them at the last fancy food show, we, you know, had chatted about the pink sauce a little bit and they were going on about how they were just, you know, really excited to be able to help out chef P I think her name was, um, be able to bring this product to market. And now seeing partnering with Sean Kingston's mom, I feel like, I don't know, there's, is there space for just like influencer sauces and for someone to be the creator of those? Stay tuned for a story coming on Nosh, but I did an interview with the CEO.

27:59And what he explained is that it's a great way to get volume really fast. So you sell a ton of this sauce in Walmart, you make, or whatever other retailer, you make a limited batch out of it. It drives a bunch of sales. And when you've got products with slower turns like chutneys or hot sauces, they also just launched an olive oil. That kind of balances out your revenue stream and helps you out there. But definitely more to come. It was a super fascinating conversation, Adrian. I can't wait to tell you all about it. I'm looking forward to reading it, Carol. Nice tease there, Adrian. I don't even think you were expecting that.

28:38Totally unintentional. Just so in it with the hot sauce category. I also talked to Dano's Seasonings. So I think there'll be a story about that. They use TikTok to sell their seasonings. They have like millions of views. And we talked about how TikTok actually helps them with retail buyers and driving sales as well. They're launching single serve packets in dollar stores. and the hope is that that drives trial from people who see it on social media and then they go by the large shaker. So everybody has got different strategies for how to put the power of social media to work, it seems like. Now, I know, Shauna, you had something that you posted on our Slack that you were really excited about that I only saw as I was like kind of leaving the venue.

29:30So I missed it, but it would be something that I would like to try that's not pink sauce. and certainly instagrammable i'd say oh 100 so if anyone saw my instagram story i think i posted this gelato is so good i could cry so it's this brand called salato i believe is how you pronounce it um rhymes with gelato that would make sense correct um it's like a think of a k cup but for gelato and ice cream so it's this machine mostly using food service right now also some offices i think too was another big one for the offices but some of their big partnerships yeah we have this discussion wait wait for it i have repeat i was repeatedly saying that throughout the conversation yeah actually i think shauna just wants one in her home to be totally honest but anyway shauna sorry tell us more about this machine so anyway these little refrigerated pods go into this machine uh it takes about 60 seconds and then it spits out this gorgeous delicious gelato what what kind of what kind of flavors are we talking about here we got pistachio in there we got pistachio we got chocolate vanilla i believe there was a hazelnut which i cannot have but the vanilla amazing chocolate amazing i think i basically ate my body weight in gelato that day I think this is my, I'm having full on FOMO now because, I mean, the chocolate and vanilla are great.

30:59Yeah, but hazelnut and pistachio, whoo. You had me at hello. There also were plant-based flavors. I believe those were mango and coconut. I was really sad though because the machine comes from Israel and all the Israeli flavors were so exciting. You guys know another favorite of mine. They had a tahini-based flavor. I was going to say, do they have a hummus or something? We didn't get it in the States. and Adrian, you would love this. They're actually focused on packaging. So once the pod, it's bigger than a K cup. It's like a small kitty cup of gelato. That was my next question. Yeah. Once that runs through, you take the cup, peel off the lid, and that's what you put the finished gelato into to eat out of the bowl.

31:46This is incredible. And it just makes it so much better that you guys are like, this is really good gelato too, because it's reminding me, I don't remember the name of it, but do you guys remember those like ice cream machine, like vending machine? Mubella. There was Mubella. And we had one of those in my high school and it, we were all so excited when they announced that they were like putting this ice cream machine in the high school cafeteria. And it was horrible. Like, I think it lasted maybe a month. The thing never had anything in it. And it just tastes like shaved ice, like with milk drizzled on top.

32:19It was not it. Adrienne, that was a point I raised to them, though, which is I don't know if you normally associate pod-based or instant products as being high quality. So there is certainly a little bit of risk-taking on the part of the consumer. That said, by going after offices, they said airport lounges are a big play for them. The person who's trying the ice cream doesn't have to pay for it, right? So they learn that it's great quality. And then maybe later when they see it in a coffee shop, they already know that it tastes good and has that premium appeal to it. But yeah, that is certainly a hurdle they have to get over.

33:05In terms of pricing, though, really interesting structure as well. Unlike some of these other machines where you have to pay a rental fee for the machine each month, they actually put the machine in offices and locations for free. What you instead do is agree to a certain amount of volume of cups per month. And if you don't hit that volume, you have to pay for it no matter what. They have different plans for small, medium, and large businesses. The price per cup remains the same. I think it was around$2.15 a cup. Meaning if you sell them in a coffee shop, there could be room for a great margin on that.

33:45But it's just a matter of how many cups per month do you have to buy? Sorry, I really got, and sorry, I got really excited about this gelato machine. All the data is stored in the cloud. So they can tell offices like how much ice cream their employees are eating. What time of day are they eating ice cream? What's the most popular flavor? I was kind of sad because I think they said like vanilla was still the most popular flavor. Come on, people. Be a little adventurous. Get into that pistachio life, you know? Some of us can't, Lucas. Even if it's pistachio flavored? It was definitely had pistachios in it because Shauna almost got killed at this booth several times.