One of the greatest falloffs in company history - Sriracha

Added: 2026-05-25

[00:00:00]Hello YouTube. Welcome in. Welcome in.

[00:00:03]Sriracha hot sauce. Where does it go?

[00:00:06]Where did it go? I I honestly I didn't know that it's disappeared. Honestly, I kind of confused. So, what's going on here? Once again, Fat Files, all the fun stuff. Let's Let's go get to watching.

[00:00:19]>> I'm slowly coming to accept the fact there's absolutely nothing I can do without falling into a rabbit hole. I quit eating hot sauce like 10 years ago.

[00:00:25]Went and bought a bottle of my old favorite hot sauce and it tastes different. And now now I'm reading appeals from the second appellet court district of California.

[00:00:35]>> My god, man.

[00:00:38]You should get rid of the rubber duck and just get yourself a fox mascot or something like that cuz you just keep on diving into those rabbit holes.

[00:00:44][laughter] >> Today we're talking about Sriracha.

[00:00:46]Okay. Like 10 years ago, it used to be my favorite hot sauce and then one day there was some huge shortage of Sriracha. Nobody could get it. There was like a drought or a lawsuit or something and the only place you could find it was on eBay for like $300 a bottle. It was insane. So, like a normal person, I switched to a different product and haven't really looked back since. And then 3 days ago, I got a wild hair up my ass for whatever reason that I wanted some Sriracha. The drought or whatever was causing it to be messed up 10 years ago is probably over and I could probably just go to the store and buy a bottle of Sriracha. So, that's what I did. So, I go, I find it on the shelf. I find what I know to be Sriracha. You know, the green little cap with the squeezy bottle with the chicken on it.

[00:01:20]And then right next to it is like five other bottles of hot sauce that are all claiming to also be Sriracha. But I am telling you right now, that [ __ ] that [ __ ] back there is not real.

[00:01:33]>> Okay, that's weird. Usually like knockoffs, you're allowed to knock off a product, but you have to like call it something different. You can't just be like, I'm going to make a knockoff of Coca-Cola and call it Coca-Cola. You're going to get sued into oblivion.

[00:01:43]>> I'll just call it Cola Coke. It'll be fine. [laughter] >> Why is the term Sriracha not trademarked? But you know what? Doesn't matter because I know what the real Sriracha is. So, I grab a bottle of [ __ ] Sauce. I go, I check out. I TAKE >> [laughter] >> WHAT DID you say there?

[00:01:59]>> Because I know what the real Sriracha is, so I grab a bottle of cocka.

[00:02:03]>> There it is. Got it. Editor note. What the [ __ ] YouTube reviewer note. A term for a chicken. P.S. Proof in the post credits. [laughter] I'm excited for the post credits. Good to note. Thankfully, there's something at the post.

[00:02:17]>> Boss, I go. I check out. I take it home.

[00:02:19]I eat the Sriracha. This is not Sriracha. I don't know what it is.

[00:02:23]Doesn't taste the same. Okay. It's been 10 years. Could my taste buds have changed? No. I'm fat. And >> I mean, yes, taste buds do change over years. I think it's like every seven years your taste buds will change or something like that. I don't know. It's weird.

[00:02:37]>> Elephant never forgets. I know what Sriracha is, and that shit's not Sriracha. Okay, something's gone horribly wrong, and I need to figure out what it is. My initial thought was, okay, over the course of the past 10 years, some investment firm, some venture capitalist group bought out Sriracha, added a bunch of preservatives, changed the recipe, made it worse so they could improve profit margins and make a bunch of money, and ruined a perfectly good product, [music] per usual. That's probably what happened. Then I look into it. I was wrong. It's way worse. Let's just get to the ad. How can be way worse than that?

[00:03:05]What? The only thing I could kind of assume it would be is like it's like um the ban the banana situation, right?

[00:03:13]like bananas uh for the candy flavored banana that you see on the shelves and all that tend to taste nothing like a banana. And when you go and eat a banana nowadays, like any banana flavored thing tastes nothing like banana. And and that's mainly because they're their flavor is actually based on a type of banana that went extinct x amount of years ago. And now it turns out that that same situation is happening to the current day banana. So we might not have banana these bananas that we know now in a little bit we'll have a whole new set of banana which is [laughter] even further removed.

[00:03:54]7 years is how long it takes to uh takes for every cell in your body to be replaced with a new cell. So every seven years you no longer are the same collection of microorganisms. Yeah, there it is. That's the thing.

[00:04:04]Build a time machine and save the old banana. Yeah. Yeah, that's an idea.

[00:04:08][laughter] Banana candy flavor is based on the real banana that went extinct. Yeah, modern bananas were uh were either genetically engineered or selectively bred from plantains, I think. Yes. And they are currently going uh from what I heard, I'm pretty sure they are currently going through the same situation that the original bananas were going through. And they might actually go extinct pretty soon.

[00:04:31]>> I'm upset, >> children.

[00:04:34]>> Mom. Hey, Dad. Um, mom wants to know why there's 50 of these in the kitchen.

[00:04:39]>> It's It's a long story. Just tell her I needed it. Okay, just give me that.

[00:04:44]Fine.

[00:04:46]>> Anything else?

[00:04:47]>> So, she she doesn't know why there's 50 of the hot sauces in the kitchen.

[00:04:53]>> Yeah. Well, neither does the audience yet. We're getting to that part.

[00:04:56]>> Um, >> yeah.

[00:04:57]>> Yeah, we got to tell them the whole story first.

[00:04:59]>> But tell us what why there's 50 of those hot hot sauces in in the kitchen. I will, but you got to watch the whole video. Now, look at the camera and say, "Delete me."

[00:05:08]>> Delete me. [laughter] >> Love you.

[00:05:12]>> See you later. This video brought >> uh Get the whole family involved with your job. It's better that way.

[00:05:19]>> You might delete me. Okay. Super simple, straightforward business model. You give them money. They turn around and make sure the data brokers aren't selling your personal information on the internet. Okay. What does that even mean? I'll break it down for you. All right. Everything that you use or pretty much everything that you use on the internet that's free isn't actually free. They're turning you into a product. You see, pretty much anytime you check that little box that says, "I agree to the terms and conditions." What you're allowing that company to do is harvest all of your personal data. They turn around, they data brokers, and then the data brokers turn around, throw it up for auction for companies to bid on so that they can target you with hyperspecific ads 24/7. But when you have Delete Me, they monitor all the big data brokers, and anytime your personal information pops up for sale on one of their websites, Delete Me automatically fills out an opt-out request.

[00:05:59]>> Is there a Canadian version of this?

[00:06:00]because I think I've looked into delete me and it doesn't actually work if you're Canadian.

[00:06:06]I know that a lot of people uh are like, "Oh, you're Canadian? Well, that doesn't matter then." Like, but I I I'm still being sold. I'm still being sold, I think. Help me. Help me. Help me, please. [laughter] >> Which they have to abide by and stop selling your information. And then, Delete Me continues to monitor these sites in case they acquire that information again, they will resubmit the opt- out request again. Simply put, a subscription to Delete Me is what actually makes everything that's free on the internet truly free. In my opinion, it's definitely worth it. I've been using them since before they were paying me to talk about them, and I'm going to keep using them after they quit paying me to talk about them. If you want to give it a try, I'll have a link and a discount code down below. Let's get back to the video. All right, we're just going to take it from the top. Our story begins in 1975. The comm >> in a lot of situation. Uh oh, sorry.

[00:06:51]It's likely that Delete Me focuses on information that is public record in the US. Uh, I don't know how citizen records work in Canada. Pretty much the same.

[00:07:01]Let's be perfectly honest. The very There's not a lot of difference between Canada and the US.

[00:07:06]Canada just has maple syrup [laughter] and Tims and we're cold. That's pretty much the extent of the differences.

[00:07:16]Maybe we'll uh we'll check out some copy and uh learn some actual differences.

[00:07:20][laughter] Uh, nearly all of a person's information is public is public record. Uh, true enough. Yeah.

[00:07:31]And a lot of the US has Tims now. Yeah, that's true.

[00:07:34]>> We don't even have that anymore.

[00:07:35]>> Living inside of Vietnam at this point in time is a 30-year-old man of Chinese descent by the name of David Tran. And as far as I can tell, David Tran is just a normal dude that has a hobby of making hot [music] sauce in his free time.

[00:07:46]Okay. Ethnically, he's Chinese, but he was born in Vietnam. He spent his entire life in Vietnam. He's Vietnamese by all accounts, okay? But the communist government over the course of the next couple of years starts adopting anti-Chinese policies. And eventually he is forced to flee his home country of Vietnam and board a ship with 3,000 other Vietnamese [music] people of Chinese descent. And that ship's name is the Hoyong. Now, the Hoyong is supposed to be taking all these people to Hong Kong so they can be refugees. But Hong Kong at this point in time is being run by the British. And the British are like, "No, no, we're not [ __ ] taking you." So, they're stuck out on this ship for over a month, not knowing where they're going to go. And finally, America steps in and is like, "It's fine. Bring them here. We'll take everybody in as refugees." So, now D, 33 years old, finds himself in California.

[00:08:30]Doesn't speak English well, if at all.

[00:08:33]He's here through [music] absolutely no fault of his own. And he's got to figure out how to make a living. And the only thing he's got is hot sauce. He doesn't need to speak English. He doesn't need to have technical skills because everybody appreciates a good hot sauce.

[00:08:44]if he can make it and sell it. That's going to be how he makes >> especially American.

[00:08:49]And if you want want to really show uh show someone a good hot sauce, you know, make a good hot sauce, put it on some ribs, you're good to go.

[00:08:57]>> So that's what he does. He starts making his hot sauce and he's literally refilling old baby food jars with a spoon and funnel with this homemade hot sauce and then hand delivering it on a bicycle to restaurants and anybody else that'll buy it. And the dude is just working his ass off doing this. He's working 18 hours a day. There's even a story that one of his kids tells later in life that when they were a baby, he would work for 18 hours a day making this hot sauce and he would have all the, you know, juices and everything all over his arms and he wasn't [music] even able to hold his kids when they were babies because he smelled so much like pepper and hot sauce. It would make the kids cry. Like it's >> Oh wow.

[00:09:33]Honestly, respect. The man did what he needed to to survive and for his home to survive. But man, that is a that is a tall order to want to Oh, man. That is quite the quite the price he had to pay.

[00:09:50]>> Possible not to love and respect this guy. Like, dude is just forced into the worst situation imaginable. Has to move to a foreign land where he doesn't speak the language and just works his ass off and does everything he can to provide for his family. And it works. His hot sauce becomes like a cult thing in LA.

[00:10:05]And by 1980, he buys a 5,000t warehouse where he ramps up production. Okay. Hey, do you understand how impressive that is? Like, I'm going to say it a little bit slower. He moved to California, doesn't even speak English in 1978. And [music] by 1980, 2 years later, he buys a 5,000 ft warehouse in LA, which is renowned for having cheap real estate.

[00:10:26][laughter] >> Multifamily home for sale. Two beds, two baths, thousand square feet.

[00:10:37]3350 square foot lot. $830,000.

[00:10:45]Almost a million dollars for this little shoe box of a crap house. Oh my god.

[00:10:51]Okay, this dude is a complete badass.

[00:10:53]Okay, so he gets this new factory up and running. Once he does that, he adds a couple of new flavors. And one of them is going to be based off of a Thai style hot sauce known as Sriracha. Sriracha was the town that this style of hot sauce was originally invented in. So he just calls it Sriracha. He slaps a chicken on the bottle because that's his zodiac sign and then puts a bunch of Chinese [ __ ] all over it.

[00:11:13]>> Really? The the rooster is on there only because that's his zodiac sign. That's amazing. [laughter] That's kind of funny, actually. I like that. and he calls his company Hoyong Foods, named after the ship that brought him to America. So we're all on the same page. A Vietnamese guy flees communism, moves to America, starts a hot sauce company, takes a recipe from Thailand, puts it inside of a Chinese branded bottle, and then sells a [ __ ] ton of it to achieve the American dream. I love I love everything about this story. It's the most American [ __ ] ever. From here, over the coming years, Sriracha becomes outrageously popular. At this point, he probably should have trademarked it.

[00:11:47]Couple of problems. One, you can't really trademark Sriracha because the word Sriracha is just the name of the town the sauce was created in. It'd be like somebody trying to trademark the word Los Angeles. You just you can't.

[00:11:58]So, at this point, most people would be like, "Okay, we're going to give it a different name so that [snorts] we can trademark it." But David Tran is like, "No, we're calling it Sriracha. I don't care. If you want to make another hot sauce and also call it Sriracha, that's fine. I'm still going to win because my shit's better." He's just a complete gangster about the entire thing.

[00:12:14]>> Okay. Another dollar into the reasons you should love David Tran Jar. Like that is the best attitude on the planet.

[00:12:19]Like I'm going to beat you not because my lawyers made it illegal for you to compete with me. I'm going to beat you by just beating you and outperforming you and giving the customer a better product. And while that is a great attitude to have, great attitude alone isn't going to make a great product a >> Remember Candy Crush Saga tried to trademark Candy and Crush and Saga as words individually. Yeah. No, that's not happening. ever since the um the edge fiasco in video gaming uh like a dozen years ago. Yeah, that shit's not happening anymore. [laughter] >> Great plan is and David Tran has that plan. Hoyong Foods is going to make their Sriracha by using fresh locally sourced ingredients. He is buying red jalapeno peppers from local farmers, having them picked in the field, taken straight to his factory, and turned into hot sauce the exact same day. Is that cost effective? Absolutely not. He could probably make way more money, have way better margins if he was buying a bunch of [ __ ] from overseas that was dehydrated, thrown into a barrel, and shipped across the ocean. But that's not what he wants to do. He wants to have it fresh and he wants to support the American economy. He literally says he locally sources everything that he puts into his hot sauce as his way of giving back to America for bringing him into this country as a refugee. Okay?

[00:13:29]Impossible not to love this guy. Comes to America, works his ass off, does not compromise on morals whatsoever. Like, I'm going to do the right thing. I'm going to create a superior product. I'm going to support my people and I'm going to [ __ ] win. And that's exactly what he does. Fast forward by 1988, he's selling so much hot sauce that he's having trouble sourcing enough red jalapenos to be able to keep up with demand. And a local farmer, Craig Underwood, the owner of Underwood Ranch, hears about his issue and writes him a letter. Not an email, not a text message, doesn't give him a call, writes him a letter that literally just says, and I quote, "Do you want me to grow you some peppers?" To which David Tran is like, "Hell yeah, grow [laughter] me some peppers. I need a lot more peppers." So, Underwood Ranches starts planting these red jalapeno peppers. And >> you want more peppers, bud? Yes, please.

[00:14:13]You got it.

[00:14:14]>> Because the ranch is so close to his factory, they're actually able to pick the peppers, put them directly onto a semi-truck, drive them straight to the factory, and within 6 hours, they are turned into hot sauce. And this is what makes Sriracha so good. They're using the freshest ingredients possible, not a bunch of dehydrated [ __ ] that they can buy from anybody. So, Sriracha explodes in popularity even more. Okay. Hey, and it's worth noting he's not even trying to market Sriracha. The product markets itself. That Sriracha has never spent a single penny on advertising or anything else. It's just like you try it, you like it, you buy more. The end. That's David TR's entire business model. I >> uh the company was able was actually able to successfully trademark the word candy through the EU. I think it uh it applied to mobile computer game titles and apparel. What about skull candy?

[00:15:02]Don't those guys exist?

[00:15:04]>> [laughter] >> But yeah, that's kind of [ __ ] up if that if that did happen. Yeah, that's so far really cool.

[00:15:11]>> Create a superior product, the customers will come to me. And it works. Sriracha starts hitting mainstream. It's getting sold all over the United States. At which point, Sriracha does start getting some backlash. There's interviewers and reporters asking questions like, "Hey, why don't you make it a little bit milder? Some people say, "It's too hot."

[00:15:27]To which David Tran responded, and I quote, "Then use less. Hot sauce is supposed to be hot. [laughter] >> Duh.

[00:15:36]>> Brilliant.

[00:15:37]Oh, it's too hot for you. Cool. Use less or none at all. Get some ketchup. Put some salt on it. That might be enough spice for you.

[00:15:46]>> This [ __ ] don't miss.

[00:15:48]>> Now, the relationship between Underwood Ranch and Hoong Foods goes on in a conventional sense for like the first 10 years. Basically, Underwood Ranch grows some red jalapeno peppers. They sell them by the pound to Hoong Foods. That's how it's normally supposed to go. And by the end of that 10-year period, Underwood Ranch is supplying 95% of all jalapenos to Hoofong Foods. And Hoyong Foods is accounting for approximately 25% of Underwood Ranch's business. The problem is Sriracha is getting more and more popular by the day. And he needs more red jalapeno peppers and he wants Underwood Farms to grow them because they have a great relationship. So he goes to Craig Underwood and is like, "Hey, I need you to grow more red peppers." To which Craig Underwood is like, "Hey, look, you're accounting for 25% of my business already. That's probably too much for diversity. Like, if I lose you as a client, I'm going to go out of business. I can't risk growing more of, you know, my available land on these red peppers because it's just too risky. I I can't do it. Go ahead and buy some red peppers from somebody else.

[00:16:43]I'll keep supplying you as much as I possibly can, though.

[00:16:46]>> Mhm.

[00:16:51]>> How about new?

[00:16:52]>> But David Tran doesn't need no for an answer. He's like, "No, you grow the best red jalapeno peppers. I need you to do it. You're the best at it. Here's the deal. Rather than you footing the risk of having to grow these peppers and then me buying them by the pound, I will pay you upfront for every acre of these peppers that you plant. Meaning that David Tran is now footing the risk of if there's [music] a drought or, you know, a famine or there's a bad crop, whatever. The fault and the risk is no longer on Underwood Ranches. It is now on Hoyong Foods, which is a deal that Craig Underwood just can't turn down.

[00:17:23]So, he agrees. And from here, as far as I can tell, they shake [music] on it and that's that. There's no contracts, no nothing. Underwood Ranches over the coming years converts all of their farm into just growing red jalapeno peppers for Hoy. The entire thing is one crop for one client on a handshake agreement.

[00:17:40]>> I think I'm starting to see where the problem might be going. Ooh, that might not be good.

[00:17:46]>> You know what? It works like a charm.

[00:17:47]And now that Underwood Ranches is only growing one crop, they start to become experts in growing red jalapeno peppers.

[00:17:53][clears throat] him and his right-hand guy, a guy by the name of Roberts, actually develop and build a harvester so they can harvest all of the peppers with a machine rather than sending people out into a field to pick them by hand. And this goes on for years. Craig Underwood and David Tran actually become really good friends. They watch each other's kids grow up. They're going to each other's houses for holidays.

[00:18:12]You know how when you're watching a movie and uh a character will be like, "Yeah, I love my kids. Oh man, I'm so close to retirement." or and and they just start saying all these like cool wholesome things and you're just sitting there in the audience and you're like, "Oh, this guy about to die. This guy's about to die. This this is going to be bad. This this is so bad. This is Oh, I I'm so scared for this guy. I'm so scared for this guy." And then five minutes later, yeah, I'm currently getting those vibes right now. I'm kind of getting those vibes at the moment. Uh, Mike working in the first generation, but if ownership changes on either. Well, yeah, it could be. He was two days from retirement.

[00:18:54]Exactly. I'm getting those kinds of vibes right now. I'm hope. But thankfully, this is real life. It's not a movie. It's not a movie. It's not a show, but it is also being narrated. So, >> everything is perfect. And then by 2007, David Tran has a meeting with Craig Underwood and is like, "Hey, you need to make your farm bigger because I'm going to need more peppers because I'm buying a new factory that's going to be 600,000 square feet." Okay? And if you don't know, acquiring more farmland is [music] not a simple process by any stretch of the imagination pretty much anywhere in the United States, but especially in places like the Midwest or California where real estate is notoriously expensive. But from Craig Underwood's perspective, this is, you know, not just a business acquaintance. This is my homie. He knows where I live. He knows my kids. We've been working together for 20 years at this point. If he needs it, I'm going to get it done. Underwood Ranches invests millions and millions of dollars and acquires 1,800 additional acres close to the new Hoy Farm so they can keep supplying them. Now, presumably some of that land was bought, but a lot of it had to be leased. And when you lease farmland, you're leasing farmland for decades at a time. Nobody is leasing farmland for like a year or a couple years at a time. And it's like, "No, you're going to sign a lease and you're going to be on the hook for this lease for the next 30 years, which is extremely risky for Underwood Farms, but he's betting on Sriracha. This thing is blowing up. It's selling everywhere and he's been with this guy for 20 years. It seems like a sure thing." And if you weren't around or [clears throat] you don't remember, in like the 2010s, Sriracha was absolutely everywhere, right? Like they were putting Sriracha on hats, shirts, Lays had a potato chip Sriracha flavor. Yeah. I mean, like actually even still to today, like Sriracha's extremely po uh still really popular. You can't go down um a grocery aisle anywhere without seeing, oh, there's there's a Sriracha bottle. You can see it. It's almost as iconic as ketchup is a lot of the time.

[00:20:45]But I I have I now that I'm thinking about it, like it did feel like it's kind of been losing some steam as of late.

[00:20:56]Uh, I forgot about the Sriracha chips.

[00:20:59]Never ate them, but remember seeing them all the time. Yeah, I'm still I'm still worried. I'm still very scared.

[00:21:06]>> Paid for none of that, by the way. He could have probably sued for trademark infringement, not for the word Sriracha, but for the use of his Rooster logo. But he never did because he just viewed the entire thing as free advertisement, which it absolutely was. Like if you're in the hot sauce aisle looking for a new hot sauce, you're like, "Oh, I've seen 17 hipsters wearing a Sriracha hats and Sriracha shirts and there's Sriracha cookbooks and Sriracha Lays potato chips. I'm going to buy [ __ ] Sriracha." So Craig under >> Yeah. Like that's how you should be doing this sort of thing. It's free advertisement. That's basically what uh what React content is, too. It's just free advertisement for the initial channel. Speaking of which, go check out Fat Files. Go check out Fat Electrician.

[00:21:45]They're great [ __ ] He's he does great [ __ ] really good information. [laughter] So, but yeah, don't be like Nintendo and going and striking down people who draw fan art. [laughter] I think Blizzard did that too for a bit.

[00:22:04]Jeez. Uh I mean, maybe David Tran passed many businesses go down after the founder retires or dies. Very possible.

[00:22:14]blown away by the fact that product placement used to be uh products paying to be in movies to products charging movies to use their rent. Yeah, that's true. What goes through with it? He acquires all [music] this new land, fronts millions and millions of dollars, puts himself on the hook for decades for this farmland, but everything's going to work fine because Sriracha is not going anywhere. And for years, it goes great.

[00:22:36]The new 600,000t [clears throat] factory opens up. Underwood Ranches is at full tilt making red jalapeno peppers. They are growing 100 million pounds of red jalapenos a year, delivering 50 to 60 >> 100 million pounds of peppers a year.

[00:22:51]Okay, hold on, hold on, hold on, hold on, hold on.

[00:22:56]How many tons is 100 million pounds?

[00:23:12]45,359 tons. That is insane.

[00:23:22]Hold on one second, everybody.

[00:23:27]Okay, let's go. Wait, what was I even talking about? [screaming] Sorry, it was perfect timing. [laughter] It's true.

[00:23:38][snorts] Guys are gremlins. You guys are gremlins. [laughter] Oh, I lost my train of thought. Oh, right, right, right. 45,000 tons.

[00:23:49]Worth of hot peppers.

[00:23:53]What?

[00:23:55]Weighs 45,000 tons.

[00:24:03]Sorry, there's one more zero in there.

[00:24:07]Let's see here.

[00:24:10]Uh notable things that weigh approximately 45,000 tons include the Costa Concordia, a famous sunken cruise ship, had a had a hole weight of roughly 45,000 tons. The USS Iowa, a historic United States Navy battleship, h was a standard dep uh displacement weight of exactly 45 displacement weight.

[00:24:36]the Cop uh the Chong Peak uh Kataman Bridge. A total the total steel weight of the main girders of this massive Chinese arch bridge uh the longest of its type in the world is about 45,000 tons. That is crazy.

[00:24:56][clears throat] And that's how many peppers they're doing yearly. That's insane.

[00:25:00]>> Semi loads every single day to Hoyong Foods.

[00:25:04]>> Spicy. And despite the scale, they are still going from picked off the plant to turned into hot sauce in like 6 hours.

[00:25:11]Hoyong Foods is now a billiondoll company selling hundreds of millions of dollars worth of hot sauce every single year. And Underwood Ranches is, as far as I could tell, the largest red jalapeno operation in the world. And at this point, Sriracha is continuing to grow at 20% revenue yearover-year, which is insane. I mean, these two men have literally made something incredible off of nothing more than a handshake agreement and both working their ass off and then it all goes to [ __ ] >> All the death flags began waving.

[00:25:43][laughter] >> What do you mean?

[00:25:45]>> According to the court documents, in approximately 2014, David Tran wanted to give his sister-in-law, who was working for the company, a big raise, but he felt that his wife and son, who sat on the board, wouldn't approve it. So, David Tran came up with an idea that he was going to make a new company and just give the company to the sister-in-law as a way to get her to make more money. And that new company was going to be called Chili Co. And Chili Co.'s entire job was going to be acquiring red jalapeno peppers and ingredients for Hoyong Foods. And that was going to be that that's how he was going to pay his sister more money. Okay, I'm going to say that again, but slower so we're on the same page. Uh David Tran has just elected to hire somebody who presumably is not qualified to take over the operation of acquiring Red Jalapeno Peppers, which is not even a job that needs to exist because he has one guy that gets him all the peppers that he needs on a handshake agreement. But for some reason, we're going to interject this person that doesn't know what the [ __ ] they're doing to try to acquire the peppers that they already [ __ ] have.

[00:26:40]Okay, I've said this a million times. If it's not broke, don't try to fix it.

[00:26:44]Everybody's making literally billions of dollars selling hot sauce and growing chili peppers.

[00:26:50]>> But we could be making tens of billions.

[00:26:53]>> Don't touch it. Leave it alone. Continue making money. But that's that's not what somebody that's a new hireer that doesn't know what the [ __ ] they're talking about is going to do. Absolutely not. Chili Co. [snorts] starts looking at the numbers and they're like, "Well, you know, actually, we could buy these dehydrated chilies from China and they would only be $300 a ton. Oh, I think that Underwood Barnes should try to compete with these dehydrated chilies from overseas while he's supposed to also deliver brand new fresh chilies that are picked and then turned into hot sauce in 6 hours while he's growing them in California of all places.

[00:27:25]>> What you just said is one of the most insanely idiotic things I have ever heard.

[00:27:30]>> So, Chili Oh my god.

[00:27:35]Oh my god.

[00:27:37]That is that is a stup.

[00:27:42]So, we're able to get these chili peppers from overseas for like 300 bucks. A ton, right? So, you should be giving us the same treatment. That way, it's either that or this entire handshake agreement that we've got going on here is out is out the window. We're just going to get from that place. Mhm.

[00:28:03]Oh, no. And there's the death flags.

[00:28:05]goes to Craig Underwood and is like, "Hey, we could get this competitor's chilies for $300 a ton. We want you to be able to sell your brand new fresh chilies and deliver them to us with your semiis for $500 a ton." To which Craig Underwood is like, "Absolutely not. It literally cost me almost $700 a ton just to grow these things. That's not possible." At which point, the appropriate response would have been, "Oh, that actually makes a lot of sense.

[00:28:28]I'm an idiot. Forget I said anything."

[00:28:31]>> OH, I DIDN'T KNOW. I APOLOGIZE. It was It was just a bartering thing. a learning experience. That's all it was.

[00:28:36]It's all good.

[00:28:37]>> Is that what they did? Absolutely not.

[00:28:40]>> But that's simply not possible.

[00:28:41]>> Why isn't it possible?

[00:28:42]>> It's just not.

[00:28:43]>> Why not? You stupid bastard.

[00:28:46]>> The next year in 2015, [sighs] Co pulls Roberts, aka Craig Underwood's right-hand man that helps him run his entire farming operation aside and tries to hire him away from Craig Underwood.

[00:28:56]Roberts declines and kind of attributes the entire thing to a miscommunication.

[00:29:01]>> He's absolutely right. Around the same time, David Trann gets a hold of Craig Underwood and is like, "Hey, can we fly a drone over your farming operation? We just want to, you know, look at the crops that are growing, which is weird.

[00:29:12]He's never done that before." But also, like, drones are new. I've been working with this guy for 20 some odd years.

[00:29:17][ __ ] it. Why not? Yeah, as long as it's for like your personal use or you just want to look at it. Like, that's fine.

[00:29:21]Go ahead. So, Pong Foods, David Tran flies a drone over, records all this footage of their farming operation, and then nothing seemingly ever comes of it.

[00:29:29]Then 2016, Craig Underwood is on vacation out of the country. They know that. So they have Roberts come to the Hoyong Foods factory where the Chili Co head and David TR basically sit Roberts down and say, "Hey, we're starting this new company, Chili Co. You're going to work for us." Not asking him to work for them. Pretty much telling him, "You work for me now." Once Roberts is like, "No, I don't. I've been working for Craig Underwood for two decades. That's my guy. I'm not leaving him." They get super pissed. They then turn around and they're like, "Okay, well, we could still buy this stuff from China for $300 a ton. You're going to sell us your stuff at $500 a ton or we're going to go elsewhere." They literally can't sell it to you at $500 a ton. It costs them almost $700 a ton to grow this [ __ ] So, not only is demand it that's like going going to um a mom and pop shop saying, "Hey, uh can can I get this thing here for like a dollar? I can get this exact same thing on Teeu for a dollar for like 50 cents. So, I I'm just going to pay you the extra 50 cents for uh for convenience. Yeah, but if you buy the thing from Teeu, it's just going to explode upon opening the package or looking at it. What What do you want?

[00:30:41][laughter] No, you want that one, go for it. But like you you can't dictate my business. [ __ ] you. And besides, the dude has years of experience and literally literally makes some of the best peppers.

[00:30:58]He makes your business work. My god, >> that price delusional. This also breaks the entire thing just by going from paying the ton to the original agreement of we're going to pay you for every acre that you plant because it shifts all the risk back onto Underwood Farms and now they're stuck because they only grow jalapenos at this point and they're stuck. So, in the coming months, Underwood Farms tries to negotiate a new price with him, but it doesn't really go anywhere. So, by the 2017 season, he's not able to plant any jalapenos. So, there's no jalapenos in the ground.

[00:31:28]There is now a massive gap in the supply chain that's [snorts] going to have to be filled somehow. So, Chiliico goes about trying to buy peppers from everybody else that they possibly can because you're never going to believe this. Um, nobody has a 100 million pounds of [ __ ] jalapenos lying around and it's really hard to find that many.

[00:31:43]>> I am stunned.

[00:31:46]just the hunt.

[00:31:47]>> So, in an effort to help find that, they give all the drone footage of all the proprietary techniques and technology and all the intel that they had gathered through espionage to all the other jalapeno farmers without Underwood knowing.

[00:32:00]>> This is [ __ ] >> So, essentially, Underwood Farms is basically dead in the water and they're on the hook for all these thousands of acres of farmland that they leased for the next like 20 to 30 years. Like, they're going to go out of business.

[00:32:12]While that's going on, Chili Co and Hoong Foods are getting jalapenos from anywhere and everywhere else that they can, which means the quality isn't that great. Some of the peppers are picked too early. Some of them are dehydrated.

[00:32:22]They're having to use green chilies instead of red jalapenos. It's a giant [ __ ] nightmare, which leads to the hot sauce tasting different, looking different. It's like a burnt orange color. People are mad that the Sriracha doesn't taste like Sriracha. Nobody knows what's going on. So now presumably Foods is also financially hurting. So they just start digging through all their accounting and they're like actually we think a couple years back. I think we overpaid Underwood Farms like $1.5 million. We're going to take them to court and sue them. So they have to give us $1.5 million and that's going to help with our financial burden.

[00:32:53]>> No.

[00:32:54]>> Stupid son of a [ __ ] >> Okay. And I cannot stress to you enough this is probably the dumbest [ __ ] idea imaginable. Okay. I've been threatened with a few lawsuits in my day and I have avoided all of them by saying one simple statement back to their lawyers. And that [music] statement is okay sue me. I would love to go to discovery with you. Because discovery is this magical part of the judicial process where both parties have to come.

[00:33:17]The discovery process of is a formal pre-trial stage of civil lawsuits where parties gather evidence, documents, and witness testimonies from each other. It prevents trial by ambush by ensuring both sides know the facts and witness accounts beforehand, aiding in case strategy and settlements.

[00:33:36]to the table with all of their evidence and you can subpoena and get all of their internal records and figure out exactly what was going on, which presumably is exactly what happens. And when Chili Co and Hoyong Foods have to turn over all of their [ __ ] oh, it becomes [cough] very apparent that they have been the jury could reasonly conclude that Hoyong had no intention of keeping those promises when uh when they were made.

[00:34:00]Hon expressly agreed to purchase the 2017 harvest of 1,700 acres at 13,000 per acre. Uh there is evidence to show that Tran had long planned to cut Hoyong ties to Underwood [clears throat] as far back as 2014. Tran was planning to form a Chilico, a company that would be that would purchase peppers from farmers other than Underwood, allowing Hoyong to cut its ties with Underwood. In 2015, Tran began his campaign to hire Roberts away from Underwood.

[00:34:35]Roberts was the key employee in Underwood's pepper production.

[00:34:39]Tran informed Roberts that Hoy Fong is breaching the contract to purchase Underwood Underwood's 2017 harvest just days after making it.

[00:34:50]>> Been plotting for at least 3 years to screw over Underwood Farms at which point it goes from them suing Underwood Farms for $1.5 million to Underwood Farm suing them for $23 million. The jury unanimously found that Underwood's fa uh found in Underwood's favor on breach of contract and fraud. The uh the jury awarded Underwood 13.32 million in compens compensatory damages and 10 million in punitive damages.

[00:35:20]The trial court denied Hoy following motion for judgment not uh notwithstanding the verdict.

[00:35:27]Jeez.

[00:35:29]Money does money, power, and success. It ruins a person. It ruins a person. And all they were trying to do was just make make more money. Make more money. They couldn't be happy with just, you know, what they had and the consistent growth that they were having. They wanted to have exponential growth and they [ __ ] themselves.

[00:35:53]>> And winning in court, >> it was perfect.

[00:35:56]Perfect. And this is what caused that magical time like 10 years ago, 2016, 2017, where nobody could find Sriracha on any shelves anywhere. And if you could, it was like this weird different color. It didn't taste the same. It was all because it wasn't the same. The whole thing with Sriracha was they had fresh red jalapeno peppers that were grown in California in a particular part of the world that were plucked, transferred to the factory, and turned into hot sauce in 6 hours flat. It was >> It was It was gold. That's That's a [ __ ] gold mine. and it was just increasing in revenue. If they had just kept going with what they were doing, not only would they be still growing more like growing financially, eventually they would have been like, "Let's open up a third. Let's get a third farm going. Let's get a third factory going even bigger and better.

[00:36:40]Let's just keep going."

[00:36:42]Sure, eventually they'll hit market saturation. But like, yeah, the nepotism started at all. No, there was no nepotism that started this.

[00:36:52]Well, okay. Actually, it was nepatism with the sister. That's true. That's true. Sorry. Uh I was going all the way back to the beginning, but yeah. No, this this was started with nothing.

[00:37:02]Literally Tony Stark built this in a cave with a bunch of scrap [laughter] sort of situation and then grew into a giant ass empire.

[00:37:13]You bring in one dumbass who doesn't know anything just so they can get a little bit of a nicer pay cut.

[00:37:22]And they [ __ ] it all up.

[00:37:25]Even if you hit market saturation, you can still uh be making bank. Exactly.

[00:37:30]You can still be making good money.

[00:37:34]Not going to lie, I didn't understand.

[00:37:35]That's fair. [laughter] Uh let's see. Sometimes I question uh what companies are doing uh doing, especially when they essentially burn down everything just to save money one quarter and have pretty much uh no care for the next uh for the literal next year. A lot of the time it's literally just ways to skirt through financial [ __ ] like they have they companies like this have uh accountants and lawyers and people who know the laws and finances inside and out and are like hey if we actually take a big loss this year it's going to get make us 10 times as much in the following year and a lot of times companies will be like cool bet let's do it and is just but sometimes if you listen to the wrong person you're gonna [ __ ] it all This story makes me wonder how often uh it's caused by higherups trying to give nepotism treatment to the people they know uh they know. Yep.

[00:38:39]>> Literally a multi-billion dollar money printing machine with a beautiful backstory with two hard ass working men on a handshake agreement that built a [ __ ] empire together and the entire thing was harpooned by one stupid just it's greed. It's pure greed. Like why everybody was winning? It wasn't broke. Why would you try to fix it? that you've got some [ __ ] that didn't build this company whispering in your ear like, "Oh yeah, >> we all have mansions. We're all rich as shit." But you could have a little bit bigger mansion and be a little bit more rich if you [ __ ] over all your friends.

[00:39:10]>> And then you blew up the entire thing.

[00:39:11]Congratulations. So yeah, that's why you couldn't find Sriracha on the shelves 10 years ago. And that's why the Sriracha today tastes a little bit different. Oh, but you know the funny part? You know what Underwood Farms did after they won the $2,300 lawsuit with Sriracha? They turned around and started making their own Sriracha. And guess what they called it? [ __ ] Sriracha. Because you can't.

[00:39:30][laughter] >> You know what?

[00:39:34]They stabbed you in the back. You have all this product.

[00:39:38]Why not expand?

[00:39:41]>> Trademark the word Sriracha. So now made with Underwood Farms with the actual chili peppers, you can get Underwood Farm Sriracha. And I'm going to be honest, it tastes very similar to the original Sriracha, but it's a little bit spicier and I kind of like it more. So yeah, I uh I found my Sriracha.

[00:39:59]>> And it's got a dragon on it.

[00:40:05][laughter] [gasps] >> I wish I could tell you what the next video is going to be, but who knows what rabbit hole I'm going to fall into next.

[00:40:14][laughter] Uh okay, there's still a few more seconds.

[00:40:20]Anything more? Anything more?

[00:40:24]Maybe my bet >> before they cannot pronounce that um >> in case proof was needed of the rooster reference. Oh, okay. I see >> sauce or rooster.

[00:40:38]>> What they call hot [ __ ] sauce or rooster sauce? Oh no.

[00:40:44]>> Rooster sauce.

[00:40:48]That is that is crazy. Hey, hey, hey, >> that is crazy. That is crazy man. It is uh the story makes me wonder how often it's uh it is. So, we learned why he was why he has 50 balls of it.

[00:41:07]Yes, that's why he had 50 balls of it cuz he found his new hot sauce. I want to actually check that out. I wonder if um uh trans uh zodiac sign is dra is the dragon because they had a dragon on the bottle. Also, they just dragged their nuts across their entire brand. [laughter] Underwood Farm Sriracha. Yeah, I'm going to have to look out for that. Maybe there's some uh some in my local uh store because if so, be like, "Yeah, I'm going to try it out." Man, that's [ __ ] up. [laughter] Whack. Hey, did you enjoy that? Was it funny? Well, come and check it out live over on twitch.tv/freeform_art.

[00:41:49]Make sure you put the underscore art. We have lots of fun there. We enjoy ourselves and we want to see you over there. So, come on and hang out. See you in a bit.