In the 1980s, Craig Underwood was a fourth-generation California farmer, struggling with the region’s changing agricultural landscape, when he stepped up to meet a need in the marketplace: Red jalapeño peppers.
The call came from David Tran, a Cantonese refugee from Vietnam who had arrived in the Golden State a few years before. He had developed a sauce that he intended for fans of the Southeast Asian flavor profile, called sriracha, but he needed a supplier.
In 1988, a seed supplier told Underwood about Tran’s need for a pepper fix and he decided to write to Tran with a simple question: “Would you like me to grow some peppers?”
Tran contracted the farmer to grow 50 acres, and the pair began a partnership that was “highly unusual in the processing business,” as Underwood described it in a 2013 documentary about the duo. As long as Tran was selling sauce, he said, “we have to be growing it for them.”
Within a few years, Underwood had become Tran’s exclusive pepper supplier, expanding his farm by thousands of acres to grow in the process. The duo developed a personal rapport as well as a business arrangement that lasted almost 30 years. Then came a sudden fallout and a lawsuit that cost both men millions, plus a lot of anger and hurt feelings, Fortune’s Indrani Sen reported.
Underwood’s farm, called Underwood Ranches and located in California’s Ventura County, grew to become one of the country’s leading jalapeño growers. During his partnership with Tran, Underwood rented and purchased land to grow from around 400 acres to some three thousand acres to grow enough peppers for Tran’s rocketing business, Huy Fong Foods, which made $131 million in sales in 2020.
Tran and Underwood‘s years of success together
Tran and Underwood met each other’s families, watched their respective kids grow up, and even met to talk about the succession of their partnership. In 2013, when the city of Irwindale brought lawsuits against Tran’s factory claiming that the smell of the peppers was giving neighbors headaches, Underwood testified on his behalf at a city council meeting.
The sauce business boomed. In 2012, Tran built a 650,000-square-foot factory less than two hours from Underwood’s headquarters in Ventura County. Huy Fong remained an independent company, turning down offers from large food corporations to buy or invest, and never spent a cent on advertising. The brand spread like a fire anyways,…