Cathie Anderson

Heat is on as tiny Kam’s chili sauce works to keep space on grocers’ shelves

In Nancy Kam’s childhood, chili sauce was something she helped her mother make in the family kitchen. Now she’s seeking space for it on grocery stores.
In Nancy Kam’s childhood, chili sauce was something she helped her mother make in the family kitchen. Now she’s seeking space for it on grocery stores.

Fair Play resident Nancy Kam used to sweat over hot kettles to can chili sauce from her great-great-grandma Harriet Churchill’s recipe.

These days, though, she can pick up boxes of the zesty medley from the food processor she hired to produce stock for grocers around the nation. She started out distributing to 50 stores in 2014 but now sells at hundreds of retailers in 40 states.

The product, known as Kam’s Kettle Cooked Chili Sauce, pushes a lot of buttons for grocers who know that consumers are seeking healthier foods with its flavor profile and all-natural ingredients, Kam said. It can be used to add some heat to entrees such as duck or meatloaf or to appetizers such as shrimp cocktail and sweet-and-spicy meatballs.

“Spicy foods are a big trend right now,” she said. “You can’t pass a fast-food restaurant without a banner across it saying ‘hot’ or ‘spicy.’ Everyone wants it, and that helps.”

The challenge now, Kam said, is to hold onto the shelf space at Kroger, Safeway, Whole Foods and other major grocers when she doesn’t have the marketing budget of a major brand.

“I’m trying to figure out how to take a small brand like mine and compete with the national brands,” she told me. “The amount of money it requires to be in a huge retailer like Kroger and Safeway, just to do what they call promotional activities – the continual discounting, running the ads – can range from a minimum buy-in of $25,000 … up to maybe $1 million.”

Kam has come up with a two-pronged strategy to expand her market share: She’s using online marketing to educate consumers about uses for her sauce and its health benefits. At the same time, she’s shopping her product to natural restaurant chains as an all-natural alternative to national brands with labels that feature hard-to-pronounce chemical additives.

“We’re hoping that expanding into food service will give me more marketing money, to continue marketing the brand at the consumer level,” Kam said.

Later this year, she will work in the test kitchen of a natural restaurant chain, formulating menu items that can use her sauce. She just finished shooting a television commercial at a cost, she said. Because running it on television is cost-prohibitive, she’s using it online until she can get enough money to start airing it in regional markets.

Many other small producers are amazed that Kam’s chili sauce is available on so many grocers’ shelves just two years after she introduced it at the Winter Fancy Food Show in San Francisco. Other small food producers have told her they spent years trying to get beyond boutique markets in their own cities.

“We really lucked out,” she told me. “Kroger representatives saw us on the show’s exhibitor list months before the show, and they requested to meet with us. That was huge.”

Kam, 52, has self-funded her startup food business. She worked for years in the commercial real estate sector, starting in her native New York state and ending up in hotel property management in Lake Tahoe. She ran a digital marketing agency with her sister for a while, but after selling that business, she focused on real estate.

She built a vacation rental on the Big Island in Hawaii, and she purchased a dilapidated cottage in Fair Play and transformed it into a bed and breakfast called The Cottage at Perry Creek. She also manages a Tahoe vacation property for a friend.

She lives on income from those properties and funnels any proceeds from sales of Kam’s chili sauce into raising brand awareness and mining new markets. She produces two varieties of the sauce: Last year, the original hot version won a second place ribbon in the specialty condiment category of Chile Pepper Magazine’s awards. Kam’s sweet and spicy alternative won second place in the 2014 Scovie Awards, named for Wilbur Scoville, the scientist who developed a test in 1912 to measure the heat scale of chili peppers.

Making the sauce, Kam said, was an annual rite in her family, and she began helping out when she was 6 years old.

“You can’t touch those hot peppers with your bare hands because, if you got them into your eye, you’d be in trouble. We’d put gloves on,” she said. “We’d get bushels of the tomatoes the day before, down at the local vegetable stand. …We’d blanch them and peel them.”

They cooked the chili sauce in big kettles, she said, so she knew she had to include ‘kettle’ in the name. They would start at 7 or 8 in the morning, Kam said, and wouldn’t finish canning the sauce until after dark.

“We’d wake up the next morning,” she said, “and my mother would fry eggs, and we’d all have eggs … sunny side up, always over a piece of toast, with the fresh chili sauce on top.”