Business & Economy
4:11 pm
Wed April 23, 2014

Kern County Officials Hope To Lure Embattled Sriracha Factory

The hot sauce company Huy Fong Foods was founded in 1980 in Los Angeles.
The hot sauce company Huy Fong Foods was founded in 1980 in Los Angeles.

Back in 2010, the city of Irwindale was so excited to lure the factory that makes Sriracha hot sauce to their area, they helped finance the $40 million project.

But earlier this month that same city council designated this once desired business as a public nuisance, over complaints from residents about spicy odors and burning eyes.

Sriracha sauce creator David Tran is now being peppered with offers to relocate his plant to other states and counties, including the San Joaquin Valley. The move could create hundreds of jobs and bolster the local economy.

Richard Chapman is the president and CEO of the Kern Economic Development Corporation.

"We're seeing a lot of developments out of LA. Residential is starting to push industrial out so we always offer an option." - Richard Chapman

"We did reach out to come and just let them know if they were considering relocating that we were a good option for them."

Chapman says Kern County is appealing because of its industrial zones. Over the years, he says they have welcomed several industrial developments from the L.A. area after relocating.

“We're seeing a lot of developments out of LA. Residential is starting to push industrial out so we always offer an option."

Chapman says they have not heard back from the company.

Larry Westerlund, the city of Fresno's economic development director, says they are doing their research but did not say if they had reached out to the company.

Huy Fong Foods did not return Valley Public Radio's calls for comment.

A move to the Valley could make sense for Huy Fong Foods. Kern County is already home to hundreds of acres used to grow the red jalapenos that make the hot sauce.

Craig Underwood’s company Underwood Ranches is the sole pepper grower for the makers of Sriracha.

"We have 600 acres in Kern County this year and we’re looking for another 200 acres for next year," Underwood says.

He says they started farming in Kern County because its growing conditions are similar to those at its main farm in Ventura which is just an hour away from the factory.

Despite Underwood’s ties to Kern County, he says he doesn’t think Tran’s company will move.

"Even if they were to relocate that's a several year process. My opinion is it's unlikely because the land base is here, he's built a brand new factory in Irwindale."

The 650,000 square-foot facility reportedly employs 200 people.

Nick Vyas, who directs the Center for Global Supply Chain Management at USC's Marshall School of Business, says relocation may be the factory's only option.

"If your plant is deemed public nuisance and you have less than 90 days to really come up with a remedy I think his options are somewhat limited. I would say it could very well happen - that he’s forced to make the decision of relocation," Vyas says.   

One that would cost the factory big bucks.

"It's not as simple as moving an office or relocating an apartment. It is a complex process."

Vyas says there's three components that have to be considered - including acquiring or building a new facility and transporting the equipment. He says the company will also have to hire, train and re-certify new workers.

The factory could face additional costs if it relocates somewhere further away from where the peppers are grown.

"If you go too far away then your transportation cost could become an enormous burden on cost of good sold so your product may end up actually become a little bit more expensive than what it is today," Vyas says.

Irwindale officials are also suing Huy Fong Foods in Los Angeles Superior Court. The outcome could jeopardize a pepper crop that’s worth tens of millions of dollars.

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