According to the court documents, in approximately 2014, David TR wanted to give his sister-in-law, who was working for the company, a big raise. But he felt that his wife and son who sat on the board, wouldn’t approve it. So, David Tran came up with an idea that he was going to make a new company and just give the company to the sister-in-law as a way to get her to make more money. And that new company was going to be called Chili Co. And Chili Co.’s entire job was going to be acquiring red jalapeno peppers and ingredients for Hoyong Foods. And that was going to be that that’s how he was going to pay his sister more money.
Okay, I’m going to say that again, but slower so we’re on the same page. Uh David TR has just elected to hire somebody who presumably is not qualified to take over the operation of acquiring Red Jalapeno Peppers, which is not even a job that needs to exist because he has one guy that gets him all the peppers that he needs on a handshake agreement. But for some reason, we’re gonna interject this person that doesn’t know what the fuck they’re doing to try to acquire the peppers that they already fucking have.
Okay, I’ve said this a million times. If it’s not broke, don’t try to fix it. Everybody’s making literally billions of dollars selling hot sauce and growing chili peppers. Just don’t touch it. Leave it alone. Continue making money. But that’s that’s not what somebody that’s a new hire that doesn’t know what the hell they’re talking about is going to do. Absolutely not. Chili Co. starts looking at the numbers and they’re like, “Well, you know, actually, we could buy these dehydrated chilies from China and they would only be $300 a ton.” So, I think that Underwood Farms should try to compete with these dehydrated chilies from overseas while he’s supposed to also deliver brand new fresh chilies that are picked and then turned into hot sauce in 6 hours while he’s growing them in California of all places.
What you just said is one of the most insanely idiotic things I have ever heard.
So, Chili Co. goes to Craig Underwood and is like, “Hey, we could get this competitor’s chilies for $300 a ton. We want you to be able to sell your brand new fresh chilies and deliver them to us with your semis for $500 a ton. To which Craig Underwood is like, “Absolutely not. It literally cost me almost $700 a
ton just to grow these things. That’s not possible.”
At which point the appropriate response would have been, “Oh, that actually makes a lot of sense. I’m an idiot. Forget I said anything. Is that what they did?”
Absolutely not. The next year, in 2015, Chili Co. pulls Roberts, aka Craig Underwood’s right-hand man that helps him run his entire farming operation aside and tries to hire him away from Craig Underwood. Roberts declines and kind of attributes the entire thing to a miscommunication.
He’s absolutely right.
Around the same time, David TR gets a hold of Craig Underwood and is like, “Hey, can we fly a drone over your farming operation? We just want to, you know, look at the crops that are growing.” Which is weird. He’s never done that before, but also like drones are new. I’ve been working with this guy for 20 some odd years. Fuck it. Why not?
Yeah, as long as it’s for like your personal use or you just want to look at it like that’s fine. Go ahead.
So, Hoyong Foods, David Tran flies a drone over, records all this footage of their farming operation and then nothing seemingly ever comes of it. Then, 2016, Craig Underwood is on vacation out of the country. They know that. So, they have Roberts come to the Hoyong Foods factory where the Chili Co head and David TR basically sit Roberts down and say, “Hey, we’re starting this new company, Chili Co., you’re gonna work for us. Not asking him to work for them. Pretty much telling him, “You work for me now.” To which Roberts is like, “No, I don’t. I’ve been working for Craig Underwood for two decades. That’s my guy. I’m not leaving him.” They get super pissed. They then turn around and they’re like, “Okay, well, we could still buy this stuff from China for $300 a ton. You’re going to sell us your stuff at $500 a ton or we’re going to go elsewhere.” They literally can’t sell it to you at $500 a ton. It costs them almost $700 a ton to grow this shit. So, not only is demanding that price delusional, this also breaks the entire thing just by going from paying by the ton to the original agreement of we’re going to pay you for every acre that you plant because it shifts all the risk back onto Underwood Farms and now they’re screwed because they only grow jalapenos at this point and they’re stuck. So, in the coming months, Underwood Farms tries to negotiate a new price with them, but it doesn’t really go anywhere. So, by the 2017 season, he’s not able to plant any jalapenos. So, there’s no jalapenos in the ground, there is now a massive gap in the supply chain that’s going to have to be filled somehow. So, Chili Co goes about trying to buy peppers from everybody else that they possibly can because you’re never going to believe this. Um, nobody has a 100 million pounds of fucking jalapenos lying around and it’s really hard to find that many.
I am stunned. Just stunned.
So, in an effort to help find that, they give all the drone footage of all the proprietary techniques and technology and all the intel that they had gathered through espionage to all the other jalapeno farmers without Underwood knowing. So, essentially, Underwood Farms is basically dead in the water and they’re on the hook for all these thousands of acres of farmland that they leased for the next like 20 to 30 years. Like, they’re going to go out of business. While that’s going on, Chili Co and Hoyong Foods are getting jalapenos from anywhere and everywhere else that they can, which means the quality isn’t that great. Some of the peppers are picked too early. Some of them are dehydrated. They’re having to use green chilies instead of red jalapenos. It’s a giant fucking nightmare, which leads to the hot sauce tasting different, looking different. It’s like a burnt orange color. People are mad that the Sriracha doesn’t taste like Sriracha. Nobody knows what’s going on. So now, presumably, Hoyong Foods is also financially hurting. So they just start digging through all their accounting and they’re like actually we think a couple years back I think we overpaid Underwood Farms like $1.5 million. We’re going to take them to court and sue them. So they have to give us $1.5 million and that’s going to help with our financial burden.
What a stupid son of a bitch. Okay. And I cannot stress to you enough that this is probably the dumbest fucking idea imaginable. I’ve been threatened with quite a few lawsuits in my day and I have avoided all of them by saying one simple statement back to their lawyers. And that statement is, “Okay, sue me. I would love to go to discovery with you.” Because discovery is this magical part of the judicial process where both parties have to come to the table with all of their evidence and you can subpoena and get all of their internal records and figure out exactly what was going on, which presumably is exactly what happens.
And when Chili Co and Hoyong Foods have to turn over all of their shit, oh, it becomes very apparent that they have been plotting for at least three years to screw over Underwood Farms. At which point it goes from them suing Underwood Farms for $1.5 million to Underwood Farm suing them for $23 million and winning in court. It was perfect.
Perfect.
And this is what caused that magical time like 10 years ago, 2016, 2017, where nobody could find Sriracha on any shelves anywhere. And if you could, it was like this weird different color. It didn’t taste the same. It was all because it wasn’t the same. The whole thing with Sriracha was they had fresh red jalapeno peppers that were grown in California in a particular part of the world that were plucked, transferred to the factory, and turned into hot sauce in 6 hours flat. It was literally a multi-billion dollar money printing machine with a beautiful backstory with two hard-ass working men on a handshake agreement that built a fucking empire together. And the entire thing was harpooned by one stupid bitch.
It’s greed. It’s pure greed. Like why? Everybody was winning. It wasn’t broke. Why would you try to fix it?
You’ve got some bitch that didn’t build this company whispering in your ear like, “Oh yeah, we all have mansions. We’re all rich as shit.” But you could have a little bit bigger mansion and be a little bit more rich if you fuck over all your friends.
And then you blew up the entire thing. Congratulations.
So yeah, that’s why you couldn’t find Sriracha on the shelves 10 years ago. And that’s why the Sriracha today tastes a little bit different. Oh, but you know the funny part. You know what Underwood Farms did after they won the $23 million lawsuit with Sriracha? They turned around and started making their own Sriracha. And guess what they called it? Sriracha because you can’t trademark the word Sriracha. So now made with Underwood Farms with the actual chili peppers. You can get Underwood Farms Sriracha. And I’m going to be honest, it tastes very similar to the original Sriracha, but it’s a little bit spicier and I kind of like it more.
