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Preacher Turned Chile Pepper Publisher Owns the Zesty Food Audience

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NEW YORK (AdAge.com) -- Give Joel Gregory a couple of minutes and he'll make you believe in the promise of zesty foods. But to Mr. Gregory, zesty foods isn't a market; the publisher-CEO
Photo: AP
Joel Gregory is building a publishing empire around spicy foods.
of Chile Pepper/Cooking Zesty magazine has taken to referring to it as "the movement."

Former preacher
No surprise really for a man who once was the reverend of the First Baptist Church of Dallas, preaching to the likes of George W. Bush and Billy Graham. He's not loud, but there is a level of intensity in his voice and when he refers to the movement, one might imagine New Mexican ninjas hiding in the background, ready to pounce if you start poor-mouthing salsa.

But Mr. Gregory's got reason to believe.

Hard-core following
For starters, he has a hard-core following. Readers of Chile Pepper are, to say the least, a zealous bunch. These are people who purchase extract from habanero peppers and fool around with sauces hot enough to cause respiratory distress. They're the sort of people who send photos of their pepper tattoos to the letters section of the magazine. They're people who buy hot sauces with names like Acid Rain and seasoning blends called Slap Ya Mama.

"It's definitely a cultlike group," said David Hirschkopf, founder of Dave's Gourmet and the inventor of Dave's Insanity Sauce.

And with advertisers like Mr. Hirschkopf, Mr. Gregory's currently got a nice hold on the market. For quite a few of his advertisers, Chile Pepper is the only national consumer advertising they do. "Advertising has been our best story since purchasing the magazine in 1996," Mr. Gregory said. According to company figures, ad sales rose from $352,000 in 2000 to $864,000 in 2002. On the trade side of the aisle, Chile Pepper -- which Mr. Gregory considers a de facto trade magazine -- is pushing hard, expecting 10,000 visitors to its annual

'Chile Pepper' magazine had $864,000 in ad sales in 2002.

International Zesty Foods Show being held Sept. 26-28 in Fort Worth, Texas.

'Wild people'
It's also pulled together sauce and spice makers from across the country to form the International Zesty Foods Association, a sure sign that the sector is growing up. "It's an industry made up of a bunch of wild people, and they're trying to become business people," said Mr. Hirschkopf, a member of the temporary committee. The committee includes, among others: Doug Renfro, president of condiments maker Renfro Foods; Chip Hearn of Peppers, a retail store and hot sauce museum in Rehoboth Beach, Del., which carries up to 2,000 hot sauce brands; and John Hard, a former fire-protection engineer who now runs CaJohns Fiery Foods in Columbus, Ohio.

Mr. Gregory thinks it's time to move beyond preaching to the choir and take his movement to the masses. And the masses seem ready for the message. Driven mainly by the burgeoning Hispanic population and influences from other ethnic groups, American spice consumption is up. Mac and cheese and boiled potatoes aren't the only things playing in Peoria anymore.

Spice consumption soars
While some may find it surprising that "Main Street" America is now demographically represented by Wichita Falls, Texas, it may be more surprising that Illinois comes in third in numbers of subscribers to Chile Pepper and in sales of Insanity Sauce. According to McCormick & Co., spice consumption in America has doubled from 2 pounds per person in 1982 to 4 pounds per person in 2002. Americans consumed 110 million pounds

of black pepper alone in 2002 and McComick's 2003 "flavor forecast" lists spices such as tumeric, wasabi powder and cilantro as flavors to watch. According to Information Resources Inc., overall U.S. sales of hot sauce were up 7.8% to $136 million in food, drug and mass outlets (excluding Wal-Mart Stores) for the 52 weeks ended July 13.

Chili showdowns
But Mr. Gregory sees his opportunity in another driver of the food industry: the notion of food as entertainment. For example, there are 200 chili cook-offs scheduled to take place in 2003 -- and that figure only accounts for those cook-offs sanctioned by the International Chili Society. Chile Pepper, itself, hosts a Zestiest Legislator contest on Capitol Hill. This year, California Democrat Joe Baca bested the former champion, Texas Democrat Max Sandlin, by scarfing down 47 jalapeno peppers in five minutes.

But Mr. Gregory's got bigger plans to tap into the entertainment trend. Chile Pepper is forgoing TV and, fittingly enough, planning a move into syndicated talk radio. As he envisions it, the radio show will be along the same line as "Car Talk," the syndicated car program that runs on National Public Radio.

The radio program will be the magazine's first serious effort of any sort to boost subscribers. Chile Pepper has seen subscriptions rise from 35,000 to 45,000 in the space of four years without a single penny spent on "responsible investment" to raise circulation, Mr. Gregory said. He sees a reasonable circulation expectation of half a million and compares his magazine to where Cooking Light was 15 years ago. For the second half of 2002, Cooking Light had a circulation of 1.6 million.

A 'purple cow'
It may seem a bit of hubris for such a small magazine to compare itself to Cooking Light, but Mr. Gregory is sure he's discovered an audience gap that he can exploit. Marketing guru Seth Godin, author of Purple Cow, identified Chile Pepper as a Purple Cow, a brand able to break through a cluttered food-magazine market.

To that end, Chile Pepper is broadening its focus; it's already moved beyond "blow-your-head-off hot" to include more generally zesty foods including barbecue, Italian, Cajun, Caribbean and Asian fare.

Even Tabasco, the granddaddy of hot sauces, sees the value in less spicy wares. Its most recent nationwide launch was of its Chipotle Pepper Sauce, a milder sauce that can be slathered on food without fear of blistering the tongue.

5,000 hot sauces
And all those little guys out there? Judging by Chile Pepper's database and the entrants to its trade show, Mr. Gregory estimates that there are more than 5,000 hot sauces in the U.S. -- or twice the number of brands in circulation in 1995. Martin Manion, vice president of corporate marketing for McIlhenny Co., said that while many of those are on he gimmicky side, the sheer number of hot sauces on the market can be seen as good news as it means more people are eating sauce. One of the few hot sauce marketers to do major ad pushes, Tabasco, which according to IRI holds 24% of the hot sauce market, executes a multimedia plan that includes Sunday supplements, couponing, TV, outdoor, print and online. Omnicom Group's DDB Worldwide, Dallas, handles the advertising account.

More variety, not just heat
Mr. Hirschkopf, too, has seen the writing on the wall when it comes to offering more variety rather than simply more heat. Since launching his Insanity Sauce, Dave's Gourmet, privately held and based in San Francisco, has branched out into salsas, marinades and drink mixes. It has even launched a line of pasta sauces that contain no heat whatsoever.

But make no mistake, he's still in the heat biz and this year is launching four hot sauces. And while hot sauces, for the moment, make up the majority of his sales, he's predicting that the salsas and pasta sauces will surpass the hot sauces.

"We're almost respectable," he joked. "Quite a change from when we first started."

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