Thailand’s Exotic Food Public Company Limited (mai: XO), leading sauce producer and distributor, is expected to continue benefiting from the Huy Fong’s chili sauce shortage in the U.S.
XO expected orders from the U.S. will increase 10% by the end of this year with high confidence that earnings in 2Q23 will hit a record high as sales revenue will be over 500 million baht.
The shortage of Huy Fong’s sriracha hot chili sauce is causing prices to soar to over $70 a bottle on the secondary market, such as Amazon and eBay, when the actual price that the sauce is usually sold in the market is around $5 for a 17 ounce bottle.
Huy Fong has been facing an unprecedented shortage of products and unexpected crop failure from the spring chili harvest. The company wrote in a note that supply is continuing to be limited, though some production did resume this past Fall season. The company also noted that it has no estimations of when supply will increase.
Mr. Jittiporn Jantarach, Managing Director of XO, told Kaohoon International that XO is able to continue distributing its product to the U.S., while Huy Fong faces supply shortage. XO has an advantage of producing its own chili from Thailand, unlike Huy Fong that relies on chili peppers from Mexico, which also gives different taste and smell.
“XO is currently focusing on the U.S. market,” said Jittiporn when asked for the company’s strategy and market expansion in the future.
Globlex Securities revised up XO’s 2023 earnings by 34% from 369 million baht to 496 million baht, representing an increase by 46% from 340 million baht of net profit that was recorded in 2022. Sales revenue is also expected to increase 20% to 1,750 million baht in 2023 as well.
