Another Sriracha Shortage May Be on the Horizon. What Happened?

Huy Fong Foods, the maker of the most popular variety of Sriracha sauce, told distributors last week that it would halt production of all its products until at least September, rekindling fears of another prolonged shortage of the beloved condiment.

For years, the manufacturer has had difficulty at times obtaining the red jalapeño chiles it needs to make the sauce. The sweet and spicy condiment is a fixture in Asian restaurants, particularly Vietnamese ones.

Huy Fong representatives declined to comment on Thursday. No other companies that produce Sriracha seem to be affected by the chile shortage.

Here’s what we know.

Why did Huy Fong Foods halt production?

Last week, Huy Fong Foods sent a letter to distributors announcing the pause, saying its chiles were “too green to proceed with production as it is affecting the color of the product.”

The letter, first reported by USA Today, said production wouldn’t resume until after Labor Day, when the next chile season begins. Craig Underwood, a California farmer who grew red jalapeños for Huy Fong Foods for nearly three decades and is now a competing manufacturer, said the chiles were likely picked too late in the season.

At Mr. Underwood’s farm, Underwood Ranches, chiles are typically picked from mid-July until the end of October. The jalapeños start out green, then mature to a chocolate color and are picked when they turn red.

Why have there been shortages?

Huy Fong Foods has limited its Sriracha production several times in the last few years.

In 2022, a company representative said the problems stemmed from “several spiraling events, including unexpected crop failure from the spring chile harvest.” That year, a persistent drought in Mexico hindered irrigation and caused low yields.

Last year, Huy Fong Foods also announced decreased production of its signature Sriracha sauce “because of a shortage of raw material,” and said it didn’t know when the supply would increase.

The company has struggled to find the red jalapeños it needs to make Sriracha since 2017, when it ended its nearly three-decade-long exclusive relationship with Underwood Ranches over a payment dispute.

“Huy Fong Foods got themselves in this situation when their relationship with Underwood Ranches broke down,” said Stephanie Walker, co-director of the Chile Pepper Institute at New Mexico State University. “It’s an important lesson for other processors that you need to take care of your grower base and keep those strong relationships intact.”

Mr. Underwood said he dedicated much of his resources to helping Huy Fong Foods, sometimes growing at least 40 percent more chiles a year just to meet the company’s demands.

In 2019, a jury awarded Mr. Underwood more than $23 million in damages after a yearslong lawsuit between the grower and the manufacturer.

“It took a lot to put together the distribution system that we created over 28 years, and he hasn’t done a really great job of rebuilding that,” Mr. Underwood said.

Huy Fong Foods produces the sauce at a factory in Irwindale, Calif. In 2022, a company representative said it uses 100 million pounds of chiles each year.

The manufacturer’s origins date back to 1975, when David Tran, its founder, fled Vietnam and moved to Los Angeles. He made his own version of Sriracha, a sauce believed to have been invented by a Thai woman named Thanom Chakkapak, and by 1980 was delivering orders in his blue Chevy van.

Are there any alternatives?

Other companies have entered the Sriracha market it recent years. Mr. Underwood started selling his own Sriracha sauce in 2020. Orders picked up last year when he rebranded it as Sriracha Dragon sauce.

Tabasco, which uses red jalapeños from the United States and Latin America in its Sriracha, created a website — srirachashortage.com — to meet a surge in demand.