Growing a Business on People’s Cravings for Sweet Heat

Michael Mendenhall: Welcome to PeopleForce Podcast by TriNet. I'm your host, Michael Mendenhall. TriNet is a full-service HR solutions company, empowering small to medium-size businesses by supporting their growth and enabling their people. We work with amazing small to medium-size businesses and I'm excited to bring their voices to life here. You can catch episodes of PeopleForce Podcast every month on Apple, Spotify, YouTube and Rise.TriNet.com.

Today we are thrilled to introduce Mike Kurtz, the mastermind behind the culinary sensation, Mike's Hot Honey. As the founder and the creator of this beloved brand, Mike has revolutionized the way we experience food with his unique blend of honey infused with chili peppers. What started as a passion project in his own kitchen has blossomed into a global phenomenon. This is adored by food enthusiasts and chefs alike and sold in over 30,000 retail locations. Join us as we uncover the story behind Mike's Hot Honey and explored the spicy journey of this visionary founder Mike Kurtz.

Mike, welcome to the show.

Mike Kurtz: Thank you so much for having me.

Michael: Well, this is quite fun because we're gonna be talking about condiments, music and I think some other things that are in your past that are very interesting that are gonna relate to how you got here. Certainly this is a 20-year journey, but there's a lot that goes into that, a lot of sort of curves and turns and figuring out how you scale something like this. So I want to go back to your childhood and we'll say maybe high school. You were employed and were working as a dishwasher. Talk to us about that and how that helped you, sort of define what you wanted to do.

Mike: Yeah, so my, my first job was age 13. I was a dishwasher at Amherst College Dining Services in Amherst, Mass. I grew up in Amherst. It's a college town. So yeah, I was washing dishes at the dining hall and I eventually got promoted to prep and, you know, started getting into kitchen.

Michael: Was that exciting? When you got the promotion.

Mike: I mean, I was working. I was working the French Toast Station, so I had a flat top grill and about 60 pieces of French toast going at one time and I loved it. Yeah. You know, I think I was making about $5.25 an hour at the time. But yeah, that was sort of the beginning of my food service experience and, you know, I later worked as a delivery driver in high school and college in what was sort of the precursor, miniature version of what, you know, DoorDash and GrubHub became. But it was, we had CB radios on our cars, and this is before the iPhone, so we had our map books and…

Michael: And to think what you could have done with that service saying, why don't we scale this like they did with Airbnb? Right?

Mike: Yeah. I think nobody really was thinking that that big at the time. Yeah. But they certainly had the model early on.

Michael: Well, what were you studying in college? I mean, what did, what was sort of your goal? What were you driving toward? Or was it one where you're like, “Hey, I'm liberal arts and I'm gonna try to figure it out?”

Mike: Yeah, so just going back a little bit, my parents met in Brazil. So my, my dad is from Philadelphia and my mom's from DC but they both met in Brazil. So I had this connection to Brazil growing up. My dad was drafted to fight in the Vietnam War, was opposed to the war, and found out that he could fulfill his civil service by joining the Peace Corps. So he joined the Peace Corps in 1964 and was randomly chosen to be stationed in Brazil. So he was in Brazil for a few years, and later he was getting a master's in Portuguese and led a group of undergrad students on a trip to Brazil during the summertime. And my mom was one of the students on the trip, and they met there, fell in love and, you know, so I had this connection.

Michael: And so here you are.

Mike: So I had this connection to Brazil growing up and loved Brazilian music and, you know, heard the language a lot growing up around my dad, and he exposed me to a lot of Brazilian music. So I was really into music. I, and I ended up being a triple major in college. I triple majored in Portuguese, African American studies and ethnomusicology.

Michael: Wow. So that's a, that's a whole, where would you go for that? So I mean, that, that seems very unique and specific.

Mike: Yeah. Well, I did my freshman year of college at University of Wisconsin and Madison, where I actually met my now business partner, Matt Beaton. He was a, a freshman in the same dorm as I was. And so I had that connection from my freshman year of college. But I ended up transferring back to UMass for my sophomore year. I just realized I was racking up out-of-state tuition and state schools, a state school, you know, at a certain level. And so, I ended up coming back to UMass and I was really interested in studying ethnomusicology, but there wasn't an ethnomusicology program at UMass, but they had an option to sort of create your own major.

Michael: Did you, have you produced music? Mastered music, written music?

Mike: Yeah. I, so after college, so my senior thesis in college was about the development of hip hop music in Brazil. And then after college, I, my first job outta college, I was hired for a job in the music business working at a record label called Putumayo World Music, which was on Lafayette Street about a block south of Astor Place. And I got hired for a job in the record sales department selling CDs. So this was like, you know, the tail end of the, the golden era of the music business. When Tower Records was still in business. And, you know, people were still going out and buying CDs and Putumayo was putting out compilations of music from different countries every month.

So we would have, it was sort of like an introduction to the music of that place. And I worked in record sales, and then I got promoted to A&R and production, I worked on the, the production of a number of those albums and the mastering of the albums, the, the, the writing of the copy for the liner notes. I shared an office with the lawyer from the label who was negotiating all the, all of the contracts. So I sort of learned a little bit from him about music supervision, music licensing. And then after my time there, I ended up working as a music supervisor for licensing music for television and film.

Michael: Oh, with, with a network or cable or...

Mike: I worked for a, a production company that was producing like small independent films. And then I worked on one feature film called Billy Bates, which was produced by Julie Pacino, Al Pacino's daughter, Julie. It was her first feature film that she produced. And, you know, that was sort of the tail end of my, my career in the music business. I also play music. I play piano and, you know, I like to like to play music, but never did that professionally.

Michael: Yeah. But so you that now you've got a turn here, a right turn. So, so now that ends or sort of slowly, you know, dissipates and now you go into condiments. Now a lot of that has to do with the connection with Brazil, right. So when did you decide, like, you know, what this condiment thing is interesting, and where did that idea come from and in what part of your life did that happen?

Mike: So my freshman year in college I met Larry, Larry Raymond, who is Sweet Baby Ray.

Michael: Amazing barbecue sauce.

Mike: Yeah. Probably heard of the barbecue sauce and you know, I thought, wow, this is like, this guy's great, you know. Like, and you know, the life of a condiment man, like this sounds like something I could really, really get into here. And so, so I, I sort of had that in the back of my mind. And then that was my freshman year of college. And then my junior year I was studying abroad in Brazil. I went to visit this national park and was hiking for like five days in this national park with a group of friends. And on the last day of the hike, we descended into this little valley, very remote valley, and there was a little town there, and we were, we had been camping for five days just eating rice and beans every night over the campfire. So we were delighted when we found this pizzeria. And they had jars of honey with chili peppers for drizzling on the pizzas.

Michael: Not this one, every one.

Mike: Not that one, not this one. But it was, it was definitely the seed, you know, and the inspiration for what later became Mike’s Hot Honey. And, and so, you know, I just love the combination of the chili peppers and the honey and the taste of, of both of those on the pizza.

Michael: Oh, you brought this to the U.S.

Mike: So I, I came back to the states a year later and I, I just started experimenting with honey chili pepper infusions in my college apartment my senior year of college. So that was, that was 2004. And so yeah, 20 years ago. And I tested a bunch of different techniques for infusing chili peppers into honey and different varietals of chili until I landed on the recipe that we really still use today.

Michael: That was Is that a hidden recipe?

Mike: It is a secret, yeah. I mean, yeah, it's a trade secret.

Michael: It's a secret sauce.

Mike: You know, we basically make a single product. We have this company that's built essentially on one product, so we gotta keep it close to the vest.

Michael: But now, so I want to get into then the, the manufacturing piece of this. So, so it's 20 years ago. You're, you're selling it out of the back of a pizza joint. Right?

Mike: I had been experimenting with it. I moved to New York. I had started that job in the music business and I just started making this as a hobby. And in 2010 I had gotten really into making pizza. And I went to Paulie Gee's, which is a Neapolitan style wood-fired pizzeria in Brooklyn, which was close to where I lived at the time. And, and I went there, the restaurant had just opened, and I met Paulie, the owner, and he came by the table and I started peppering him with questions about his oven and his dough recipe, and he could tell that I was really into making pizza. So he, he asked if I wanted to come in after my day job and become a, a pizza apprentice. So at, at the time I was working as an assistant to a booking agent at ICM Booking Agency in Midtown Manhattan. And I had just started there and, you know, I was on this track to be an assistant to an a to an agent for, you know, maybe five years. And then eventually…

Michael: Well that's a, that's a whole different track, right? It's a very, it's a…

Mike: Completely different, completely different career path. But, you know, I was, I was doing that and, and, and I was going into the pizzeria at night practicing stretching dough, learning how to make pizzas. And I brought in a bottle of my honey for Paulie to try. And he, he liked it. And at the time, you know, it wasn't branded, there was no packaging. It had the name Mike's Hot Honey, that that name is now 20 years old. But, you know, there was no brand around it. And he liked it and asked if I could make enough for the restaurant. So I started drizzling it on the pizzas there in the summer of 20. And at the time the restaurant was, you know, it was new. It was like this hot spot in the neighborhood. And…

Michael: Where did you get the capital to start doing this? Are you just using sort of your, your, your paycheck, your to, to, to fund making the honey and bringing it into the, the, the pizza parlor?

Mike: Yeah. I mean I, I started the, the business with 150 bucks, you know, there was no capital. Yeah. But I, yeah, I was bartering kitchen space for honey, so I needed a commercial kitchen to produce it. So I started, you know, eventually I…

Michael: And didn't you also, so you, you, you were talking about the peppers, right? And what type of peppers, but there's also the types of honey. Because they're all, there's a variety of that too. So did you also look at like, well, what kind of honey and from where?

Mike: Yeah, so honey takes on the flavor profile of the, of the, the nectar from the flower that the bees are collecting nectar from. So, you know, orange blossom honey bees are collecting nectar from the orange blossom and the honey tastes like an orange. So yeah, I tasted a lot of different types of honey. I ended up settling on a New York wildflower honey. Honey is a natural product, but natural variation. So yeah, I think like, I sort of embraced the fact that there was gonna be a little bit of variation in the flavor profile, you know, from season to season. But I found a supplier from upstate New York and started using his honey for the product.

Michael: How many gallons of honey are you going through? I mean, this is lots of honey. I mean, a lot, lot of bees.

Mike: A lot. Yeah. I mean, you know, a single hive, usually it'll produce, you know, around 60 pounds of honey, depending, I mean, oftentimes it's related to how much rainfall you get. So if it's a rainy spring, you know, you're, you're more likely to have a higher yield than if it's a really dry spring. The, the flowers produce less nectar, the bees collect less. Less nectar produces less honey.

Michael: So you have to be, because you're really, your basic piece to this is the honey you have to be very involved in, you know, what's going on right now with honeybees and some of the, the, I don't know if it's an aphid or something that's infecting the hives and you know that, that…

Mike: Varroa mites.

Michael: Yeah, Varroa mites. That’s what it is.

Mike: Yeah. So they will, you know, they're, they often impact larger scale operations where the hives tend to be closer together.

Michael: So, you know, interesting Flex, the company Flex, who does all the smart technology work, you know, your, they do all the wristbands for, you know, everybody who's got wearable technology. And they worked on a project where it was addressing this issue. And they, the scientists figured out that if they heat the hive to a certain temperature, the bees can survive, but not the mites. And so they heat, they, they produce more heat, they actually wrap the thing with electrodes and they heat the hive up and, and the bees are protected and it kills, just so you know… That was a really interesting article. But that being said, so are your suppliers local? Are they, is it really your, the peppers are coming from Mexico or wherever and the honey's coming from as you think about your supply chain?

Mike: Yeah, so you know, we've, we've grown quite a bit since the early days. Today we still work with our original supplier and we have started to supplement our New York supply with honey from Brazil, Argentina and Uruguay. So we're using honey from the United States as well as Brazil, Uruguay and Argentina.

Michael: Oh, that's awesome. What hiccups have you had as you scale? Now you've gotta figure out like we need different types of equipment. We need different types of people who have different levels of experience in doing this, you know, in producing condiments or producing a food product or byproduct. Have you had hiccups as you grow, like, oh wow, now we gotta grow bigger. We have to do this. And what were some of maybe were there roadblocks that you had to get over and figure out?

Mike: Yeah, there've been a number, you know, early on I was one man operation the first five years. And I was personally bottling every bottle by hand. It took a really long time to unlock large scale production. One of the issues is that I was looking for a, a honey packer who was willing to work with me. And I posed a risk to most honey packers because they weren't gonna set up a separate line for my product 'cause I was too small. And they also didn't wanna run chili pepper infused honey on a line that also packs pure honey. Because if you clean the line but you miss a spot, you run, you run the risk of cross contaminating pure honey with chili peppers. And as you know, honey is a very precious commodity, so it just wasn't worth the risk for all of these packers.

So I struck out with a lot of people and it took years to finally find somebody who was willing to take a chance on me and who actually believed in the product. And so when I finally found the first packer that I started working with, he had a garage in, in north Jersey, and he had hives in upstate New York. And he said, you know, when, you know, I don't want you to be alarmed when you get here, you know, it doesn't look like much, but I assure you we can do a lot of production outta this very small space. And he worked with me to sort of MacGyver a production line, you know, because we were creating a product in a category that didn't yet exist, so there was no template for how to produce this stuff at scale. So we really had to figure out the machinery needed to execute the production process at scale. And then, you know, eventually we, we figured it out and, you know, a few years later we were able to do, I think he, he filled an order out of that same garage for like 4,000 Walmart stores two weeks early. So like he really was, was true to his word.

Michael: So tell me then about how you scaled. So you were a person.

Mike: Yep.

Michael: Then what did you go to 10, 15 and then all of a sudden you're at like 50? How did you scale over the 20 years?

Mike: Yeah, so I was a one-man operation from like 2010 to 2015. And then I was looking for a business partner to help me grow the business. And I had serendipitously reconnected with my business partner Matt, who I had met my freshman year of college. And he reached out, he was coming to New York with his wife. And I hadn't seen him, you know, since freshman year of college. So it had been, you know, about 15 years.

And I brought him to Paulie Gee's and he had pizza and he saw the honey and I, I filled him in on what I was doing and he was, he had a corporate job and he was looking to get out of his, his job and into a startup at the time. And he had an MBA and some really great business experience that complimented my experience. And we were just a good, good pair. So he ended up joining me as a, as a partner in 2015. We then started grooming the business to take on our first investment. We had a series A seed round in 2017. After that we were able to hire, you know, a handful of people and started scaling from there. So, you know, the series A really gave us the, the gas to start hiring some people.

Michael: Have you had, have you had any of these bigger conglomerates decide, well, we're already making honey over here. Let's, let's try to take a piece of this market share from Mike and we'll try to do this. Have you had competitors try to come in and…

Mike: Yeah, I mean they're, I think our biggest competition is private label. So you see like, you know, a lot of the grocery store chains have their own sort of private label version of our product. But even despite a lower price point, we tend to perform better.

Michael: Well this is all about you, right? 'Cause yours has a personality versus some white labeled thing. It's like, yeah, okay. I mean this is a cool story behind this.

Mike: Right. There's a real brand with real people behind it. And also the what's in the bottle is really high quality. And you know, maybe someday our competitors will be able to replicate it, but so far no one has.

Michael: No that's usually the case as long as you stay true. But you, you have, you have two here. We'll come back to that. So now you, you've gone from, I don't know, what was it, did you say $120 you started with and you're well into the tens of millions, is that correct? I don't know that you've been public about, you know, the size and the growth and the scale of that.

Mike: Yeah, we, we did over $30 million in sales last year and you know, we continue to grow at a pretty good clip.

Michael: Yeah. That's fantastic. And when did you introduce, so you have the original, now you have the extra hot. By the way, he said there's two different types of peppers. So it's not like just more pepper in this, it's a different type of pepper.

Mike: Yeah. And that's important because different chili peppers hit on different parts of the palette. So the original is a little bit more of a back of the palette heat, the extra hot, the black bottle is a lot more punch in the front of the palate, cuts through fattier food. So like I would recommend the extra hot for something like ribs or fried chicken. The original's a little bit more delicate. You could put it in in a cocktail or drizzle it on some cheese, but really it's also, it all depends on the person.

Michael: So, so are you international? Are you global? Are you really U.S.-based, so far?

**Mike:**We're mostly focused on focusing on our domestic business and really growing our velocity in the domestic market. But we have taken on some international business, you know, Canada, the Middle East, east Asia, so…

Michael: Brazil?

Mike: Yeah, actually…

Michael: I was gonna say you, you, you've got this Brazilian connection.

Mike: Yeah, we are gonna be expanding our distribution to Brazil probably later this year. So that, that's exciting. That's kind of a full circle moment for me.

Michael: So how many full-time employees do you have today?

Mike: I think today we're at about 27.

Michael: Oh wow. So two to 27.

Mike: Yeah.

Michael: In the 10 years. Has that, does that make it more complicated and does it become more distracting when you add like 30, then you go to 50, then you're like, does it distract you from the business in that now you've got other issues you have to deal with?

Mike: I mean it's, it's certainly a challenge managing people, you know, who have real lives. And that's, of course there are challenges with that. But ultimately, it's just been just wonderful to build out a team. I think like in our case, we've focused on hiring great people. Nobody has experience selling hot honey. You know, it's, it's like we're, we're just looking to hire really smart people who are passionate, who share our values and we've been…

Michael: Well, you have a culture, right? Which is important.

Mike: Yeah.

Michael: And you don't wanna disturb that by bringing somebody in that doesn't fit. How do you manage that piece of it? So one, not just bringing the right people in, but that will fit with your team, keep the culture that you've built around the idea and the brand, right? And then retain people so that they don't go somewhere else 'cause somebody's offering them more.

Mike: Yeah, well we've, we've hired a lot of people who have come from connections to our existing staff. So, you know, it's, you start with great people in the beginning and then you tap into their networks and then you start to build the team that way. I think like that's been one way that we've been able to sort of preserve our, our culture and hire great people. You know, we were pretty much remote before the pandemic, so that was one thing that helped us hire great talent and compete with some bigger brands that maybe we couldn't match a salary. But, you know, we'll offer you maximum flexibility and you know, you wanna limit your travel, we'll make that happen and have…

Michael: Benefits help that. Because you know, the biggest thing we see at TriNet is, you know, the healthcare piece and the benefits that you can provide. Have you, has that played into, you know, attracting good talent for you?

Mike: Absolutely. I mean we try to be consistent and competitive with the best brands out there in terms of our benefits and you know, we're still a relatively small company, but I think what we offer our staff has been, you know, fairly competitive in that front. So, you know, benefits, flexibility, the ability to work remotely, all of those things help in hiring the best talent.

Michael: So you were talking about your network and how you find people, your parents, are they into this?

Mike: I mean they've always been, my parents always supported my creative pursuits and I think that's probably what gave me the confidence to dive headfirst into the hot honey business.

Mike: And yeah, my family's just like, you know, they're spreading the Mikes Hot Honey gospel every day.

Michael: And do they order cartons of it? Like, hey, send another one.

Mike: I mean, I keep on telling family like, you don't have to buy it. Like, I'll send you some more. But, yeah, I think like just in general, like the, the product and the brand has benefited a lot from like this organic word of mouth growth.

Michael: So tell me, you know, you were talking about restaurants and a lot of restaurants, what restaurants here were in New York are using this?

Mike: I mean there are…

Michael: All over.

Mike: Yeah. I mean we're working with thousands of restaurants across the country from, you know, single-location…

Michael: But it's not just pizza. That's what I wanted to talk about.

Mike: Yeah.

Michael: People are putting this on things other than pizza.

Mike: Yeah, so like our, our strategy in food service was to start with the taste-makers. So like, you know, we started out a Paulie Gee's, which was this hotspot Neapolitan style pizzeria. And a lot of other pizzerias saw the success that Paulie was having with the product and, you know, wanted to replicate that success at their spot. So we started out with this model of, of tapping into taste-makers, not just in New York City, but like the best pizzerias in every market. And I think part of it is that like I was a pizza guy. I worked in a pizzeria, so the pizza community saw me.

Michael: I'm I'm sure you, you produced great dough.

Mike: My dough's…

Michael: That's the most, one of the most important pieces.

Mike: I did. I'm a little out of practice now, but at one point I was making pretty good dough. But like I think the pizza community really embraced me because they saw me as one of their own and they saw the product as something that was of the pizza community. So that really helped. So we, we tapped into taste-makers all over the country and it's, you know, in New York it's places like Scarr’s Pizza on the Lower East Side, which is…

Michael: Now, is that the one you talked about? Because I was gonna say, there was one we talked about earlier that you said has some of the best pizza using your hot honey. It's in the lower East Side. Is that the one?

Mike:
Yeah, they're, they're one of my favorite pizzerias. I mean they really are my favorite New York slice.

Michael: So tell everybody where that is the name, where it is. Where you can locate this.

Mike: Scarr’s Pizza, 35 Orchard Street on the Lower East Side. Orchard and Canal. Just a great New York slice shop if you want to just a pure New York slice.

Michael: And they're using Mike's Hot Honey?

Mike: Yeah. They have a slice called the Hot Boy, which is pepperoni, jalapenos and Mike's Hot Honey.

Michael: Oh wow, okay.

Mike: Yeah, it's got a kick.

Michael: Yeah, you're gonna need a little beverage with that.

Mike: Yeah.

Michael: Well listen, this has been awesome. I mean, I want to say that, you know, we're very impressed with what you've done. We love that you're a customer. We wanted to highlight this. We think it's important because you've had such growth. We do like the story that goes with it because a lot of people don't realize success doesn't happen overnight and it's always a journey. And what we see is a lot of it's eight to 10 years til you really see something hit and it's a lot of sweat, you know, that goes into this sweat equity to make this stuff happen. And we we're thrilled that we're a part of this too, of Mike's Hot Honey and that you took time to, to come in from Brooklyn to, to be with us.

Mike: Of course. I mean it wasn't that far. But I appreciate you guys having me and you know, it's just great to have a chance to share the story and, and of course we're, we're grateful for the partnership.

Michael: Yeah. Great. Terrific. Well listen, where are you going after this?

Mike: I'm headed to Chicago tomorrow to…

Michael: They're putting this on deep dish?

Mike: We have a partnership coming up with Lou Malnati's, which is a famous deep dish spot in Chicago. So, I'm going out there tomorrow to shoot some content with them.

Michael: That's awesome. Well everybody go out and get some Mike's Hot Honey. I would stick with sort of the original version for me, but you know, go for it if you're doing some brisket.

Mike: To each their own.

Michael: Yeah. Alright. Thank you so much. Really appreciate it.

Mike: Thanks for having me.

Michael: I want to remind everybody that our PeopleForce Podcast by TriNet is committed to helping small and medium-size businesses and their leaders with timely and relevant business content. The PeopleForce Podcast drops new episodes every month and we hope you continue catching our new episodes on Apple, Spotify, YouTube and Rise.TriNet.com. To get relevant SMB news and info, make sure you subscribe to our podcast and to our newsletter at TriNet.com/insights .