075: Building a $40M/Year Hot Honey Business

—Welcome to Startup Gems, where we find undiscovered startup growth hacks, stories and case studies from every random nook and cranny of the internet.—

—Whether you're a seasoned entrepreneur, an aspiring startup expert, or simply someone seeking inspiration, Startup Gems is your source for the stories that ignite the flames of innovation.—

—I’m your host, Chris Koerner, and in this episode, we dissect the principles that propelled Mike's Hot Honey from a homemade passion project to a nationwide sensation. First up, we explore the power of building around a strong core product, understanding the essence of what makes a brand stand out. Then, we dive into the strategic world of brand collaborations, unlocking insights on how partnerships can catapult your business into uncharted territories. Lastly, we shed light on the art of thoughtful brand awareness and its pivotal role in Mike's Hot Honey's rise to the top. Get ready for a flavorful journey through the business tactics that turned a niche product into a household name. —

—Let's start at the beginning. For decades, the classic pizza toppings were pretty consistent - pepperoni, sausage, olives, you know the drill. But in recent years, a new player entered the scene and quickly became a staple at pizza shops across the country - hot honey.—

—Enter Mike, the man behind Mike's Hot Honey. He stumbled upon this winning combination of honey and chili peppers while hiking in Brazil back in 2 thousand three. The idea stuck with him, and over the next six years, he tinkered with the recipe, testing different ways to infuse honey with chili peppers and vinegar, all while pursuing a career in the music business.—

—Fast forward to twenty ten, Mike's Hot Honey made its debut, initially introduced to customers and quickly gaining traction in the 2 point 5 billion dollar US honey market. The product eventually found its way into 30,000 retail and food service locations across the nation, raking in over 40 million dollars in twenty twenty three.—

—Now, Mike's philosophy on building a brand revolves around a strong core product, and that's exactly what he did. But it wasn't just about the honey; it was about the experience, that kick on the back of your palate that kept people coming back for more.—

—In college, Mike dreamt of working in the condiment industry, inspired by a chance encounter with Larry Raymond from Sweet Baby Ray's. His journey took a turn in Brazil, where a pizzeria offered jars of honey with chili peppers as a pizza drizzle. The flavor blew his mind, and the idea of making it himself took root.—

—For the next six years, Mike tested and perfected the hot honey recipe, enduring the painful process of dialing in the flavor profile through countless chili pepper tastings. It wasn't until twenty ten, while working as a pizza apprentice with Paulie Gee in Brooklyn, that things started to take off.—

—Customers at Paulie Gee's pizzeria fell in love with Mike's Hot Honey, leading to its first commercial debut. Mike went from making small batches in the back of the pizzeria to selling bottles off the bar, initially priced at 6 bucks. As demand grew, so did the need for capital.—

—In twenty fourteen, Whole Foods took notice, and Mike's Hot Honey expanded beyond the pizza scene. Reconnecting with college friend Matt Beaton, the duo tackled the challenges of scaling the business, raising around 12 million dollars through three rounds of funding since twenty seventeen.—

—Brand collaborations and innovative products, like an extra hot version of the hot honey, propelled the company forward. Neon signs of the brand logo became a marker of quality for restaurant partners, contributing to widespread brand awareness.—

—With a team in place, Mike's Hot Honey now boasts a presence in approximately 30 thousand locations, with its product consistently ranking as the number one selling hot sauce on Amazon. The focus remains on the core product, knowing there's still untapped potential.—

—So, there you have it, the story of Mike's Hot Honey - a journey from a hobby to a multi-million dollar business, proving that sometimes, the most unexpected combinations can lead to sweet success.—

—Let’s now dive into the success of Mike's Hot Honey and extract three key principles that any business owner can apply to their own endeavors.—

—Principle 1: Building Around a Strong Core Product—

—The first principle that stood out in Mike's journey is building around a strong core product. Mike's Hot Honey focused on perfecting its unique honey and chili pepper combination, creating a product that stood out in a market saturated with traditional options.—

—So, for our fellow business owners out there, identify what makes your product or service exceptional. Whether it's a distinctive feature, quality, or flavor, hone in on that uniqueness. Ensure that your marketing, branding, and customer experience all revolve around this core strength.—

—Principle 2: Strategic Brand Collaborations—

—Another crucial aspect of Mike's success was strategic brand collaborations. From potato chips with Utz to a mustard partnership with Maille, these collaborations expanded the brand's reach and introduced Mike's Hot Honey to new audiences.—

—Consider seeking partnerships or collaborations within your industry or related fields. Look for opportunities to cross-promote with businesses that share your target audience. This can amplify your brand's visibility and create mutually beneficial relationships.—

—Principle 3: Thoughtful Brand Awareness—

—The third principle we gleaned from Mike's journey is thoughtful brand awareness. The neon signs featuring Mike's Hot Honey logo became a symbol of quality in partner restaurants. It's a clever way to create brand recognition and make customers associate the product with a positive experience.—

—Think about how you can elevate brand awareness in your business. It could be through creative signage, exclusive packaging, or even unique promotional events. Make your brand memorable and consider how you can turn your customers into brand advocates, spreading the word organically.—

— And there you have it - three principles from Mike's Hot Honey's success that can be applied to any business. Build around a strong core product, explore strategic brand collaborations, and invest in thoughtful brand awareness.—

—Thank you for being part of today's adventure through the world of startups and innovation. Did this episode ignite any fresh perspectives or ideas? Share your reflections and favorite takeaways in a review wherever you’re listening now. Remember to stay curious, continue to forge your own path, and subscribe and follow Startup Gems to be the first to access stories that will fan the flames of your entrepreneurial passion.—