Colorado's salsa scene.

• Author: Peterson, Eric
• Position: Includes related article on peppery foods - Industry Overview

Jeff McFadden started making salsa as a hobby. In 1987, he began selling it to friends and at craft shows. Sales got - what else? - hot, and McFadden launched Grand Junction-based R.E. Foods, maker of Religious Experience Salsas.

"We marketed it in the ski towns, and it spread from there," he said.

Cut to 1998, when McFadden shipped more than 250,000 units of Religious Experience. Fast forward to 1999, when he expects to ship upward of 300,000 units.

"We're king of the last 10 percent," McFadden quipped about R.E. Foods' status as one of Colorado's larger niche manufacturers.

McFadden's Religious Experience brand is a rare success story in the bruising Colorado salsa business. Salsa's popularity here has given rise to scores of small, in-state manufacturers. But for every Colorado-produced salsa that slugs its way to success, sales and shelf space, dozens are relegated to smaller retail channels or oblivion.

Barbara Kelly, owner of the Denver-based Made in Colorado shop, said, "I feel like we're the salsa capital of the world." Kelly fingered a core group of salsa success stories, such as Colorado Salsa, Buffalo Bill's Salsa and Lindita's Instant Salsa Mix, while recalling "a couple dozen" brands that have vanished.

In the kingdom of salsa, the difference between life and death is shelf space. That means catching the attention of a big-time distributor or retailer.

Kellye Hunter, associate editor of Fiery Foods Magazine, said creative marketing makes or breaks small sauce businesses.

"They [niche salsa manufacturers] have to grow with the times," she said. "Eleven, 12 years ago, chili was a novelty. Now you've got to be more."

How? McFadden points to his salsa's memorable Religious Experience name and logo.

The Denver Salsa Co. has a licensing deal with a Denver sports figure in the works.

Kathy Schrader's J.D. Foods, Golden-based manufacturer of Jethro's Salsa, has a patented trade dress: a packet of spices attached to the jar that allows the consumer to control the salsa's heat level.

Once upon a time Jethro's distribution was handled by a regional company, and by 1997 the salsa had garnered shelf space in King Soopers, Albertson's and Safeway, selling 25,000 cases per year. But the supermarket chains switched to national distributors, Schrader said, pushing her sales to an expected 1,000 cases this year.

"We're very, very vulnerable," she said. "I would like to see a push for regional products in grocery stores."

Meantime, Schrader is...