“Fancy hot sauce.” That’s what Natalie Cutino calls the hot sauces she and her husband, Jacob Cutino, make in small batches. They blend miso hot sauce and strawberry hot sauce, deftly balanced and neatly packaged. Their rust-red and marigold-orange bottles have become a common sight at specialty shops and local eateries. Some, like The Larder + The Delta, even use Cutino Sauce Co. products to brighten select dishes.
These days, though, restaurants have fallen on hard times.
In an effort to slow the spread of the coronavirus, Arizona governor Doug Ducey ordered a statewide closure of bars and restaurants but for takeout and delivery. The necessary order has limited sales. For many reasons – logistical, financial, health – dozens of restaurants have shuttered completely, for now or for good.
“We’re absolutely affected by it,” Jacob says. “Restaurants are about 25 percent of our business.”
Since appearing regularly at local farmers markets a few years ago, in their business’s younger days, the Cutinos have shifted more to a wholesale model. They use an online store to sell hot sauce not only to Metro Phoenix, but nationally. Roughly three-quarters of their business is now wholesale. This balance gives Cutino Sauce Co. some financial cushion against the coronavirus’s current disruption of the hospitality industry. Restaurants, these days, are only a quarter-slice of the pie.
“We’re fortunate in that regard,” Natalie says. “To be online right now is a big help.”
The virus has affected Cutino Sauce Co. from angles beyond restaurant sales and feeling for hospitality industry friends. For one, it has disrupted packaging. “The printing on our bottle,” Jacob explains. “It’s done by a gentleman up north. He wants more lead time because now he’s working to create hand sanitizer, too.”
Before the coronavirus started to spread in Arizona, the Cutinos had been developing a more affordable hot sauce. “We were planning on and working toward a restaurant-friendly product,” Natalie says. “But that has kind of been slammed to a screeching halt.”
The virus’s ripples don’t stop there. Many of the peppers and specialty ingredients that the Cutinos use come from California. They worry that restrictive lockdowns in the state may complicate sourcing, which would ripple to sales and profits.
The virus, though, has already slowed business this month. The first week (the week of March 16), Jacob says, there was “absolutely” a decline in sales. The Cutinos felt like they had to act to keep bottles selling. So they unleashed fresh batches of miso, strawberry, blueberry and mango hot sauce. “We released our limited flavors sooner,” Jacob says.
Looking ahead, the prospect of a severe national economic slowdown would create long-term obstacles for Jacob and Natalie. “If people get hit really hard in your pocketbook, the last thing to go is your essentials,” Natalie says. “We’d like to think that hot sauce is essential, but maybe toilet paper is more so.”
Would people spend $2 per ounce (or more) on “fancy hot sauce” in a deep recession? It’s a question that we might soon find out. “The one shared sentiment, me speaking to all my friends in the industry, it’s just the uncertainty,” says Jacob. “It’s hard to answer any questions right now.”