The global media went crazy. the New York Times wrote: “… Scarcity takes the spice out of life,” and “…. Scarcity. What You Need To Know,” CNN reported. Are we running out of oil? Steel? Energy? Not at all. There is a shortage of Sriracha that only worries hot sauce lovers around the world. So, what happened, you may ask? Was there an environmental disaster? Did health authorities shut down the production facility? As journalist and MSNBC correspondent Jane Wells reports on her witty and in-depth sub-stack site Wells $treet, something very preventable occurred, and it’s of interest to readers of this blog – the challenges of global sourcing combined with some personal sensitivities have caused production at Huy Fong Foods, the maker of Sriracha, to drop by 90%. In the 2010s, as the market for the hot sauce exploded, Huy Fong sourced its jalapeño peppers primarily from Underwood Farms, a grower in Ventura County, California. Both companies expanded, and Underwood Farms began acquiring more and more land to meet the increasing demand. At one point, Huy Fong’s purchases accounted for 80% of the grower’s sales. But then things started to go downhill. Most likely due to growing cost pressures, Huy Fong complained about overpaying and later reneged on an agreement to buy the entire crop from Underwood Farms while it began buying peppers from a cheaper source in Mexico. The two companies sued each other, and Underwood Farms prevailed. Much to the delight of Craig Underwood, the grower’s owner, the spring chile crop in Mexico was a big failure, and Huy Fong found itself without its most important ingredient. That impasse brought the two companies closer together, and it looks like much of Underwood’s fall crop will go to Huy Fong – again. Whether it’s the European auto industry, which has been nearly shut down by the war in Ukraine, or American hot sauce, when it comes to global sourcing, it’s never a good idea to put all your chilies in one basket…