Columbia Business School

Hot Sauce Spices Things up with Social Mission

Presented by Columbia Business School

social mission

Since 2000, the US hot-sauce market has increased 150 percent, outpacing the combined growth of old standbys like ketchup, mustard, mayonnaise, and BBQ sauce. According to IBIS World, 2017 hot-sauce revenues are expected to reach $1.4 billion.

In creating The Bronx Hot Sauce, John Crotty ’96 saw more than just an opportunity to enter a rapidly growing market segment (and join other alumni hot-sauce entrepreneurs like Brian Ballan ’13, co-founder of A&B American Style pepper sauce). For Crotty, who has a long work history in affordable housing and government service, hot sauce was a vehicle for social impact.

“The Bronx Hot Sauce model is predicated on helping [Bronx] community gardens strengthen themselves,” Crotty says. “We think capitalism can be a positive thing for these areas.”

According to GrowNYC, a nonprofit dedicated to sustainability efforts, New York City is now home to 600 community gardens. A 2008 study concluded that New York City community gardens could have “significant positive effects” on property values — as much as 9.4 percentage points within five years of a garden’s opening. Further, the researchers estimated that community gardens generated a gross tax benefit to the city of about $503 million over a 20-year period.

Last year, Crotty and his Bronx Hot Sauce team bought 4,000 serrano pepper seedlings — just under a quarter pound of serrano peppers go into each bottle of hot sauce — and donated them to Bronx community gardens. The Bronx Hot Sauce partners with GrowNYC and Bronx Green-Up, the New York Botanical Garden’s community garden outreach program, to help collect the peppers throughout the growing season and provide technical growing assistance to participating gardeners. Community farmers then had the opportunity to sell the peppers back to Crotty at a price of $4.00 per pound, which is anywhere from 25 to 33 percent above the market rate.
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The Bronx Hot Sauce growers include refugees, young offenders in alternative programs to incarceration, and local schools. Last year, more than 30 Bronx community gardens grew 1,500 pounds of serrano peppers that ended up in bottled hot sauce distributed across the Tri-State Area.

“Helping those communities empower themselves was what we wanted to do,” Crotty says. “Community gardens are really an incredible model of community efficiency. They provide daycare for kids from time to time; they feed people for little to no money. They help give people a nexus and a meeting point they’ll organize their lives around, which can be incredibly stabilizing for people who, in some cases, don’t have a lot to count on.”

While The Bronx Hot Sauce has a social mission, Crotty points out that it is still a business. “It’s a commercial-driven venture,” he says. “Otherwise, it’s just a bunch of good thoughts.”

Looking back at his time at Columbia Business School, Crotty fondly remembers professors like Raymond Horton and David Beim, who helped him develop the analytical, leadership, and entrepreneurial skills he is putting to use with The Bronx Hot Sauce.

“The MBA itself was a very useful tool for someone like me because I had not had exposure to business,” Crotty says. “I learned about things that I would have told you were useless at the time. It’s like a time-release pill that comes into play 10 years later.”

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