By Eric Peterson | Jan 23, 2017
Condiments and co-packing services
Industry: Food & Beverage
"I never thought this would ever be a business," says Cash. "I just started making hot sauce because I needed something new in my life."
He sold his first bottle when he was $3 short for green fees at a local par-three course.
That garlic serrano sauce remains his top seller of about 35 different varieties of sauces and other products. "The first recipe hasn't changed at all," says Cash.
It's on the table at numerous restaurants, including Davies' Chuck Wagon Diner, Sam's No. 3. "Davies' Chuck Wagon Diner was the one who forced me into business," recalls Cash. "Our second customer was Blue Sky Cafe. She said, 'I love this, but I don't like the logo.'"
Doing business as Branded Sauces, the company has about 4,500 active labels as private label has grown to represent 80 percent of sales. Many private-label customers use their own logo and sell the branded sauce alongside T-shirts and baseball caps. Notes Cash: "It's more than just a good sauce. It's really become a promotional product for restaurants and breweries. It's a different kind of business card."
Beyond restaurants and breweries, customers include bands like Five Iron Frenzy ("They sell a ton of sauce at their shows," says Cash) and such big companies as AT&T and Facebook.
In-house brands like Salvation Sauce (complete with tiny Bibles), Danny Cash Hot Sauces, and High Altitude Gourmet make up another 10 percent of the business, and co-packing accounts for the final 10 percent.
Co-packing "is difficult," he adds. "We prefer to private-label our products." The reason? The recipes are time-tested and shelf-stable, and production has already been scaled. "There's a lot of work that goes into expanding," says Cash.
But the catalog spans everything from hop-infused hot sauces to barbecue sauces, mustards, catsups, and a sauce made with coconut and ultra-hot ghost chilis. "It is just crazy awesome," says Cash. "I made it to get rid of some random ingredients."
While many of the recipes have remained the same, the scale of the operation has changed: The company now makes more than 250,000 bottles a year. "We have grown at our pace," says Cash. "It seems like we've added one employee a year. . . . We have turned away certain customers to focus on our quality. We want to focus on the right sauce, but at a good price."
After stints in Englewood and Lakewood, Cash moved the operation to southwest Denver in June. The company is in the midst of the buildout of a 2,600-square-foot kitchen in its new 17,600-square-foot facility, which also includes office and warehouse space, as well as a retail store. "We're still rocking along though and we're gearing up to add 50 percent to our annual sales come December 2017," he says. "The new kitchen layout will consist of six gas-fired kettles that we can fill twice a day for a maximum output of 530 gallons of sauce made per day."
"We have a ton of room to grow," says Cash. "I have a good feeling about Denver. Because we're not a medical marijuana or a growhouse, everybody is excited to work with us."
Challenges: Due for completion in early spring, the buildout and launch of a commercial kitchen has been the biggest recent challenge for Cash and company. "Anytime construction and permits are part of the mix, it usually takes three times as long." But it's worth the effort, he adds. "We wanted this place to be a home for a long time."
Another challenge: sourcing his peppers from his primary distributor in Louisiana. "They've just been destroyed by the floods," says Cash. "When you have to throw away 750,000 pounds of chili peppers, that's the output of several countries." Cash says he typically uses 75,000 pounds of peppers annually.
Opportunities: While it's labor-intensive, co-packing for a wide range of customers has been a catalyst. "Our growth has been driven greatly by co-packing," says Cash. "That has been a huge part of our business."
He also sees potential business in fulfillment and act as "a one-stop shop” for private-label and co-packing customers. "With this facility, we're trying to figure out a way to house other people's product," says Cash. "We've got some room for that."
Needs: With his kitchen up and running, Cash points to labor as a big ongoing need. "Finding good employees. I think that's everybody's problem these days." He says he's always on the lookout for "young and old adults who don't mind pepper fumes."