PE firm sells hot sauce maker Cholula for $800m

The hot sauce market does $1B a year, and $24B condiments giant McCormick -- which owns Frank’s Red Hot Sauce -- is looking to spice up its portfolio in the space.

November 25, 2020

Source: SNL

The Wall Street Journal just dropped some spicy news: The $24B condiments giant McCormick — which owns Old Bay seasoning and Frank’s Red Hot Sauce — has acquired Cholula from L Catterton for $800m.

Founded in 1989, the pepper-and-vinegar-based hot sauce — known for its can’t-miss red cap — is named after the Mexican city it was founded in.

Most recently, it scored some cultural clout in an SNL skit, where the hot sauce breaks up a ketchup marriage.

Cholula’s secret sauce: changing eating habits

Hot sauce sales in the US are up 40%+ since 2015. Per the WSJ, there are several reasons for this:

  • Consumers (especially millennials) are gravitating to low-calorie condiments.
  • Growing immigrant populations are bringing new flavors.
  • During the pandemic, hot sauce has been a great addition to delivered meals and in-home cooking.

Cholula does $96m in sales, and the broader hot sauce market is nearing $1B this year, not far off from its frenemy, ketchup.

In honor of the hottest deal of 2020, here’s a definitive ranking of the world’s best hot sauces according to our graphic designer, Malary Lee:

I respectfully disagree and submit my list:

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