"Huy Fong had been buying its peppers exclusively from Underwood Ranches since 1988. Underwood was growing hundreds of acres of peppers exclusively for Huy Fong. After about a decade, the two businesses stopped formalizing their agreements in writing. They had worked together so long that they were relying on oral deals, like partners."
"Huy Fong was paying Underwood based on acreage used rather than the number of peppers harvested, meaning it would pay even for bad crops. For a farmer, that's an attractive deal with little risk. Huy Fong pushed for Underwood to expand and focus only on this one crop."
"In 2014, Huy Fong put into motion plans to stop relying on Underwood for peppers, but never told Underwood about it until late 2016. The results are only fully becoming public knowledge now, especially since Huy Fong sriracha is showing up differently on store shelves."
Huy Fong Foods, producer of the iconic rooster-logo sriracha, experienced a dramatic change in its product color from red to muddy green, prompting customer confusion. The shift resulted from a breakdown with Underwood Ranches, which had exclusively supplied peppers since 1988. After a decade of informal oral agreements, Huy Fong began planning to source peppers elsewhere in 2014 but didn't inform Underwood until late 2016. The relationship deteriorated when Huy Fong agreed to purchase peppers from 1,700 acres in 2017 at $13,000 per acre, then immediately breached the contract by buying nothing. This forced Underwood to find alternative buyers, disrupting the supply chain that had sustained Huy Fong's signature product for nearly three decades.
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