In 1947 Dave Pace spiced up America with Salsa and this turned into a 90 Billion Dollar category.

Dave Young:

Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.

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Dave Young:

Welcome back to the Empire Builders Podcast. I’m Dave Young here talking to Stephen Semple. And the listeners may not know this because we only release these every week or so, right?

Stephen Semple:

Mh-hmm.

Dave Young:

But we often record them one after the other. And we just got done recording the episode about Doritos and Tostitos. And now you’re telling me that we’re going to talk about dip, Pace Salsa.

Stephen Semple:

Pace Salsa. Yeah.

Dave Young:

So the picante sauce people.

Stephen Semple:

Correct. Correct. Absolutely correct.

Dave Young:

And that’s great with Doritos.

Stephen Semple:

I never thought about it being with Doritos.

Dave Young:

Really?

Stephen Semple:

Tostitos, I would, but not Doritos.

Dave Young:

How about both?

Stephen Semple:

Okay.

Dave Young:

I say you can dip a Dorito into anything. I’m in that camp. I’m firmly in the camp that anything dippable is-

Stephen Semple:

You’re all-inclusive in your attitude towards Doritos and dip. Very open-minded. Here’s the thing I’m going to say. If someone has not listened to the Doritos, Tostitos story, you really should go back and listen to it before listening to this one because there’s certain things that kind of come together in terms of what’s happening in the world.

Dave Young:

Like chips and dip.

Stephen Semple:

And these stories are kind of linked even though this story starts in 1947. Well, the Doritos story starts in the late ’50s. They still have kind of a bit of a shared history.

Dave Young:

These stories that are on a collision course, a deathening.

Stephen Semple:

They are. And this story’s also not just about pace salsa, but it’s really about the origin of the salsa in the United States as a category, which is a $90 billion category. And the business was started by David Pace in 1947 in San Antonio and was sold to Campbell Soup in 1995 for $1.1 billion.

Dave Young:

All right.

Stephen Semple:

So not a bad little payday.

Dave Young:

Not a bad deal.

Stephen Semple:

Yeah. So now David Pace was from Louisiana and he moved to Texas after World War II. He had been running a small food business processing sugar substitutes, which were popular both during the war and shortly after the war with rationing because of the sugar rationing. But as rationing was coming off, what he knew is there was going to be less and less of a need for these sugar substitutes. So he was looking for a new idea. And so we have to remember, it’s 1947, food’s kind of boring in the United States. It’s not diverse. It’s bland. It’s meat and potatoes. The condiment that was used to improve food was ketchup. That was the condiment to improve food, right? And Mexican food was not really a thing. About the only thing that people knew about Mexican food, it was spicy. Here’s the part that I came across that really surprised me the most.

In New York City, one of the most diverse cities in the world, and certainly the most diverse city in the United States, there was just one Mexican restaurant in the city and New York at the time.

Dave Young:

In the ’40s? City.

Stephen Semple:

In the late ’40s, ’47.

Dave Young:

Okay. Wow.

Stephen Semple:

There was only one. That was it. Now, you could get Mexican food in the South because let’s face it, 100 years previous, a lot of parts of the South were part of Mexico, right?

Dave Young:

That’s right.

Stephen Semple:

As we like to remind ourselves. So here he is in-

Dave Young:

Well, Tex-Mex started just spreading in.

Stephen Semple:

Yeah. So here he is in San Antonio. He was stationed in Texas during the war and he’d settled in San Antonio, but he had never had Mexican food because now he’s off the base living in San Antonio and he tries salsa for the first time. And he’s like, wow, this is great. And he decides he needs to bring it to the market. A couple of challenges he ran into. First is how to make it. There’s lots of recipes around. He wanted to make his own version to sell the non-Mexican, so he wanted to tone down the intense flavors. He also needed to be able to jar it so it had shelf life. Here’s one of the fun challenges he ran into. A couple of the recipes he worked with would ferment once put in a jar. Well, what happens in a jar when something ferments?

Dave Young:

Botulism?

Stephen Semple:

No, kaboom. They blow up.

Dave Young:

Kaboom. They blow up. Okay. Yeah.

Stephen Semple:

So exploding jars, exploding jars of salsas, not really the objective.

Dave Young:

That’s never a good look either.

Stephen Semple:

Not really. But he gets it figured out and he brands it as Pace Picante Sauce. So it was first of all, promote it as a sauce, not a dip. And he starts selling...