Business
The tale of L.A.’s iconic hot sauce and how Ozempic is making it even hotter
For 55 years, the family behind Tapatío has refused to even write down the recipe for Los Angeles’ iconic hot sauce, passing its secret formula for success only from lip to ear in closed rooms.
The Saavedra family put the ingredients on paper for the first time earlier this year as they sold the beloved brand to backers who plan to make their salsa picante even bigger beyond California’s borders. It is a weight off the shoulders of Luis Saavedra, the founder’s son and one of the few people who knew the recipe.
“We didn’t want anyone to know what we were using,” he told The Times in an interview at Tapatío’s factory in Vernon. “That always scared my sisters, because what if something happens?”
Demand for hot sauces had taken off for unexpected reasons just as the Saavedras were looking to sell. The millions of people on Ozempic and other powerful weight-loss drugs often have cravings for more flavor. The values of some sauce companies have skyrocketed. Bachan’s, a Japanese barbecue sauce brand, was acquired in February for $400 million.
While the Dallas private investment firm that bought Tapatío, Highlander Partners, wouldn’t share the terms of the deal, the company’s new chairman, Jeff Partridge, said it hopes to capitalize on the growing appetite for more heat to splash on proteins.
“Whether it’s GLP-1 or desire for proteins, Tapatío and hot sauces enhance that experience,” he said. “Consumers are increasingly seeking flavors.”
Red peppers drive Tapatío’s taste, though the company won’t share which exact peppers are used. The thin sauce uses garlic, salt and other spices for a tangy, peppery punch. It has a mild heat that doesn’t linger.
Luis Saavedra, right, former chief executive officer of Tapatío Foods and son of company founder Jose-Luis Saavedra, speaks with Eric Beatty, the current chief executive, at the company’s manufacturing facility on Wednesday.
(Genaro Molina / Los Angeles Times)
The big acquisition is a long way from the brand’s birth in founder Jose-Luis Saavedra’s kitchen more than 50 years ago.
Saavedra, originally from Mexico City, long dreamed of making his way north. He landed in Chicago in his late 20s, working as a Spanish translator. He met his wife and moved to Southern California.
He worked at an aerospace parts manufacturer in Los Angeles. The homemade hot sauce he brought for lunch was a hit with co-workers who asked for more. When he was laid off in the late ’60s during an oil recession, he started selling bottles.
As sales rose, he rented a small space for production in Maywood and it officially became a business in 1971. The whole family pitched in. His son, Luis, remembers twisting on caps and attaching labels to bottles when he was 13.
Bottles are filled with Tapatío hot sauce before being labeled at the Tapatío manufacturing facility on Wednesday. The hot sauce company was recently acquired by Dallas-based private investment firm Highlander Partners.
(Genaro Molina / Los Angeles Times)
Saavedra and his son would drive a van up and down Los Angeles, manually packing and unloading the product to local corner stores. Many of the first bottles were stocked in East Los Angeles stores.
About five years in, the company made enough for Saavedra to quit the two part-time jobs he had picked up to keep the business afloat. Operations remained in Maywood for 14 years before they expanded to a 7,000-square-foot building in Vernon.
In 1996, the company made its boldest bet, splurging on a 30,000-square-foot building.
In the same facility today, the strong aroma of spices tickles visitors’ noses. The precise portioning of the secret ingredients, matching the ratios of the founder’s original formula, happens in a room locked off from employees. The magic mix is then rapidly poured into a long line of empty bottles that march along a conveyor belt like soldiers.
It’s the legacy of the founder, who refused to be deterred by naysayers or obstacles to growth, said Saavedra’s son.
“Let’s go around it,” the younger Saavedra said, quoting his father’s mantra in the face of problems. “Let’s go under. Let’s go above it.”
His father’s stubbornness paid off in court as the company was sued for its name. It was once called Cuervo — his wife’s original last name — and tequila giant Jose Cuervo came after it. Saavedra had already trademarked the name in California, so it got a big payout to give up the name.
Saavedra briefly entertained the name “Charro,” a reference to Mexican cowboys, before landing on Tapatío, a nickname used for people born in Guadalajara, Jalisco, where all three of his children were born. Its logo evolved into a beaming cowboy with bright blue eyes in a wide-brimmed hat.
The Tapatío name was also challenged. Del Monte Foods sued Saavedra in the ’80s, claiming the name was too similar to its brand “Patio.” Saavedra won that case.
The founding father’s hardheadedness could also sometimes cause trouble.
Luis Saavedra, son of company founder Jose-Luis Saavedra, shows the original Tapatío label, left, compared to the current version.
(Genaro Molina / Los Angeles Times)
The younger Saavedra battled with his father in the late ’90s about changing the brand’s label to help it stand out on crowded shelves. The old bottles were largely black and white and looked a little outdated. Eventually, the senior Saavedra gave in. Sales skyrocketed.
Today, Tapatío is shaken over meals around the globe, though its dominance is strongest in California. It has been used in collaborations with other companies to spike mashed potatoes, protein powder, pickles and ramen.
Tacked to a wall at the Vernon factory is an old photo of the dozen people who were there to launch the brand’s new facility 30 years ago. Some of the employees still work there, including Jorge Cuervo, the production supervisor, and Fabian Diaz, who mans the forklift.
Diaz, who moves countless pallets of product, jokes he was born at the factory, having spent almost his entire adult life working for the company.
Under the new ownership, all 25 current employees were retained, and the firm has committed to hiring more.
“They’ve been doing this for a long time,” Luis Saavedra said. “They have a passion for it.”
The family began exploring options for a sale in late 2024, right after the founder, now 97, suffered a stroke.
Jose-Luis Saavedra had remained closely involved in day-to-day operations despite his age, often spending from sun-up to sun-down at the factory.
As he took on all his father used to do as well as his own workload, the younger Saavedra was getting burnt out and started to worry that keeping the company family-owned could be hurting the brand.
“Work was really devouring me,” Luis Saavedra said. “It was a tough decision, very difficult. We cried together as a family, then we said, ‘In the long run, it’s better.’”
“It was a tough decision, very difficult. We cried together as a family, then we said, ‘In the long run, it’s better,’” Luis Saavedra said of the decision to sell the company.
(Genaro Molina / Los Angeles Times)
Once it let potential suitors know the company was in play, the offers poured in. The family considered offers from around 40 companies before choosing Highlander Partners.
In a few years, the company’s new leaders hope to use the growing demand for flavor triggered by weight-loss drugs to bring California’s top sauce to many more markets east of the Rockies, said Eric Beatty, the company’s current chief executive.
“We believe that we’ve got these sector tailwinds behind us,” Beatty said. “It’s going to be a really good story.”
Eric Beatty, current chief executive officer of Tapatío Foods LLC, stands next to boxes of the hot sauce that are ready for shipping at the Tapatío manufacturing facility on Wednesday.
(Genaro Molina / Los Angeles Times)
New leadership has grand plans for the brand, hoping to build more facilities and add new products.
“We’ll always be a California company,” Beatty said. “This will always be the center of the Tapatío universe.”
Meanwhile, the Saavedra family still has a minority stake in the company and will continue to help manage it.
“They are the essence of the brand, and really understand the heartbeat of the brand,” said Partridge, Tapatío’s new chairman. “We certainly want to make sure that they always have a voice.”
Business
Erewhon opens new Southern California location
Erewhon opened its newest location in Glendale on Wednesday, marking the luxury grocer’s 14th store in Southern California with more set to open soon.
The new store, located at 520 N. Glendale Ave., includes the chain’s signature cafe and tonic bar as well as an indoor-outdoor patio space.
Known for its upscale, trendy products and high prices, Erewhon has grown into a tourist destination in Los Angeles and a hot spot for celebrities and influencers.
The Glendale location will bring Erewhon staples to trendy consumers in the area, including the beloved Strawberry Glaze Skin Smoothie, which until last year was named after the model Hailey Bieber.
Employees at the store handed out complimentary gift bags and fresh flowers during the grand opening Wednesday morning.
“This location was designed to reflect the spirit of the neighborhood while creating a welcoming space to gather, centered around wellness, connection, and a commitment to the quality standards that define Erewhon,” Erewhon President Josephine Antoci said in a statement.
The company purchased the space, which was formerly a hardware store, in 2024.
Erewhon has locations in several of Southern California’s wealthiest areas, including Calabasas and Beverly Hills. It also has stores in Venice, Manhattan Beach and at the Grove.
“Erewhon’s decision to invest in Glendale reflects confidence in our city’s economic future,” Glendale Mayor Ardashes Kassakhian said in a news release.
The grocer was founded in 1966 by Japanese immigrants Michio and Aveline Kushi — pioneers of the natural-foods macrobiotic movement — who began selling imported organic goods out of their Boston home. In 1969, the company opened its first Los Angeles location on Beverly Boulevard.
Josephine and Tony Antoci bought the company in 2011 and helped launch it to its luxury status with a cult-like following. Tony serves as chief executive while Josephine handpicks much of the store’s merchandise.
By the mid-2010s, Erewhon had become a watering hole for celebrities such as the Kardashians and the Beckhams.
The company has its eye on further expansion. A Thousand Oaks location is slated to open this August and stores in Costa Mesa and downtown Los Angeles are planned for 2027. An Erewhon cafe opened in the Los Angeles County Museum of Art’s new David Geffen Galleries earlier this month.
The Pacific Palisades location, which shut down after the wildfires last year, is set to reopen in January.
The Glendale Erewhon takes the place of Virgil’s Hardware Home Center, which opened in 1932 and closed in 2019.
Business
Volvo to pay $197 million after hidden pollution device found in California truck engines
Volvo Group North America has agreed to pay nearly $197 million to resolve allegations from California regulators that company’s heavy-duty truck engines violated California emissions standards and certification requirements.
About 10,000 diesel truck engines manufactured by Volvo were equipped with an undisclosed device, causing them to release excessive levels of smog-forming pollution across California, according to the California Air Resources Board, the state agency that regulates air pollution and greenhouse gases.
Volvo is developing a software fix to repair many of these vehicles and extend their warranties at no cost to the owners. Eligible truck owners are expected to be notified of a non-mandatory recall on these trucks next year.
CARB found inconsistencies in the Swedish automaker’s data while testing trucks with Volvo engines from model year 2010 to 2016, which resulted in the investigation and ensuing settlement.
“This case underscores why CARB’s compliance testing and strong enforcement are essential to protecting the state’s air quality and public health,” said Lauren Sanchez, chair of the state Air Resources Board. “Our responsibility goes beyond adopting regulations — we are committed to upholding them by identifying violations and holding companies accountable for meeting emissions standards.”
Under the settlement, Volvo will pay $17.5 million in civil penalties to reimburse the state for the cost of the investigation and support its vehicle-testing operations. Another $179 million will go toward investing in clean-air initiatives, such as electric vehicle incentive programs, to offset air pollution that resulted from the alleged violations.
Business
Commentary: A surge in Nevada data center construction threatens the electricity supply for 49,000 Californians
Local opposition has blocked or delayed more than a dozen huge data center projects around the country. But these Californians don’t get a vote on Nevada projects that could affect their electricity supply.
Those big data centers being built for artificial intelligence firms are in bad odor nationwide.
Seven in 10 Americans oppose projects in their local communities, according to a recent Gallup poll. More than a dozen, valued at some $64 billion, have been blocked or delayed by local opposition in recent years.
But what happens when the people directly affected by these project plans don’t get a vote?
Data centers did not influence this decision.
— NV Energy, explaining its move to end service to 49,000 California customers. But is it telling the truth?
That’s the quandary faced by 49,000 residents living on the California side of Lake Tahoe, mostly in the city of South Lake Tahoe. The surge in construction of data centers in Nevada is prompting the Nevada utility that supplies 75% of the Californians’ electricity to cut them off next year.
The California-regulated utility that carries the electricity over the state line to their homes and businesses has assured them that it will find alternative sources to protect them from losing service — but hasn’t promised that their rates won’t increase because of the transition.
“It’s like we don’t exist,” Danielle Hughes, the head of a local energy nonprofit and an advocate for the customers, told me. The crisis facing those residents is just the latest in a long line of indignities they have suffered thanks to several unique characteristics of their energy market, Hughes says.
For one thing, they are permanent residents of the community — teachers, firefighters, police, and service workers at the hotels, restaurants and resorts that bring in a tidal wave of visitors every winter. The latter, as well as vacation-home owners and renters, generate seasonal electricity demands that drive up power costs year-round.
That means that the permanent residents are in effect subsizing the visitors, even though they’re lower-income ratepayers than the generally well-heeled vacationers.
Before delving deeper into the issues for the permanent residents, let’s examine the effect of the large-scale data centers being built and proposed in Nevada, and more generally coast to coast.
Nevada has emerged as a prime location for data centers, in part due to the wide open, undeveloped acreage available for construction. More than 60 data centers have sprung up around Reno and Las Vegas, with many more slated to rise in the northern part of the state, according to a survey by the Desert Research Institute, a Nevada nonprofit.
“We’re right at the epicenter for global expansion” of data centers, observed Sean McKenna, a co-author of the report.
The existing data centers consumed 22% of Nevada’s electric generating capacity in 2024, DRI calculated. If all those under construction and on the drawing board are completed, that figure would rise to 35% by 2030. NV Energy, the Nevada utility that provides the electricity for the California side of Lake Tahoe, estimates that the electricity demand for just the 12 projects being planned would come to 5,900 megawatts — nearly three times the generating capacity of Hoover Dam.
That construction frenzy is likely to bring some of the same drawbacks that have provoked local communities to militate against data centers — not only pressure on existing electricity capacity, but also a voracious appetite for water due to the cooling needs of the computerized equipment managing the data for AI applications. Residents in the neighborhoods of data centers have also complained of incessant noise coming from their 24/7 operations.
With global warming driving up temperatures in Nevada’s semiarid and desert zones, they add, residents will find themselves in a contest with data center owners for an already inadequate supply of power in the state. DRI warns: “Local utilities and ratepayers in data center cluster regions like Northern Nevada also risk bearing the costs of subsidizing AI and computing services as power grids expand their infrastructure.”
In many communities, the result has been a vigorous and vocal backlash, including in California. They’ve packed town halls, prompted state and local political leaders to legislate limits on their growth or even to ban them.
That brings us back to the situation around Lake Tahoe.
In terms of its electric utility service, the region has long been an outlier. About 25% of its power comes from two solar farms operated by Liberty Utilities, but the rest comes from NV Energy; the reason is that it’s unconnected with the California transmission grid but accessible via a line from Nevada.
As a result, it falls into the cracks among energy regulators. Because it’s not part of the California grid, the California Public Utilities Commission has only limited jurisdiction over its service, although it has the authority to approve its electricity rates. The Nevada Public Utilities Commission doesn’t oversee the customers’ service at all, because they’re not Nevada residents.
The region is also unusual because its peak energy demand comes in the winter; most of the rest of California peaks in the summer, when air conditioners are on full blast.
Hughes and other residents have maintained that because the CPUC hasn’t modeled electricity demand for their small region, they have been paying for infrastructure that doesn’t serve them.
“We’ve been paying for assets in Nevada,” Hughes says, “without it being tracked by the state of California.”
Liberty does charge permanent residents in the Tahoe area about 2% less than the rate for part-time residents, but the discount should be much larger, Hughes says. Liberty didn’t respond to my request for comment.
Earlier this year, NV Energy informed Liberty that it would no longer serve as its wholesale energy provider after mid-May next year, and urged Liberty to make haste to secure an alternate supplier.
Liberty promised its customers in a recent statement that they “will not be left without service” as a result of the change. “This does not mean the power is shutting off,” Eric Schwarzrock, president of Liberty Utilities, said at a South Lake Tahoe City Council meeting last month, according to the news site SFGate. “Energy companies, utilities, large customers change energy supply frequently.”
Liberty and NV Energy both attributed the change to a preexisting agreement that anticipated that NV Energy would eventually cease providing power to Liberty’s customers, although their interpretations of the deal and the impetus for the change appear to be at odds.
The “long-standing agreements and planning assumptions … date back more than a decade,” NV Energy said in a May 14 statement. That was “well before data center growth became a factor,” the utility said. “Data centers did not influence this decision.”
That is, to be charitable, dubious. How do we know? Liberty said so in a March 6 letter to the California Public Utilities Commission, requesting permission to take “immediate action” to find alternative providers.
The letter stated that Liberty had expected its arrangement with NV Energy to “continue indefinitely.” During their last negotiations for an extension of the deal, however, NV Energy informed Liberty that it would cease serving Liberty on May 31, 2027, with a possible extension to Dec. 31.
“This change of stance by NV Energy was a surprise to Liberty,” the letter said. Liberty ascribed NV Energy’s decision to new “market circumstances” in the latter’s home service region. Among them: “A number of entities are seeking to add large loads such as data centers into the area.”
NV Energy says it will continue serving Liberty’s customers until Liberty secures a new supplier, even if it misses the May 2027 deadline; the ultimate deadline is Dec. 31, 2027, when NV Energy expects to complete its 350-mile Greenlink West transmission line between Las Vegas and the Reno area, part of a $4.2-billion infrastructure upgrade.
Yet that still leaves an open question that should make those customers nervous: How much will they be paying for power?
In its recent statement to customers, Liberty made only the vaguest of promises. “While no utiulity can predict the exact future cost of energy,” it said, “affordability is a primary goal” in its search for new suppliers. “With a competitive bidding process, we aim to find a cost-effective solution for your monthly bill.”
But any new supplier would have to come from outside California, because of the region’s lack of any connection with the state’s grid. And generators in nearby states face their own rising demands from data centers, drought and global warming.
The drawbacks of these massive industrial installations are beginning to be felt by their neighbors, including higher electricity prices and dwindling water supplies. They’re only going to get worse.
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