How Mike’s Hot Honey built a $40 million a year business with a single product

Mike Kurtz doesn't like to travel without his briefcase. 

The crimson Franzen case is the same model as the iconic briefcase from Quentin Tarantino's film "Pulp Fiction". But unlike in the 1994 film, everyone knows exactly what's inside. 

That's because Kurtz is eager to show off how he had the suitcase wired to light up just like in the movie, with the built-in bulbs illuminating the amber hue of bottles of hot honey that bear his name. 

Indeed, the reason Kurtz brings the suitcase with him while he travels is so that he can spread the gospel of Mike's Hot Honey, the spicy honey that has taken pizzerias by storm.

He loads the briefcase up with five 12-ounce bottles before every trip. Kurtz likes to give a bottle to the taxi driver who takes him to the airport, and then hands out a few to the check-in agents who handle his bags. By the time he gets to the security line, his briefcase is empty. 

"I think there's something about briefcases. You don't see them around too often," Kurtz says of his favorite marketing prop. "So whenever you do, there's this subliminal message sent out to the people around you that whatever's in the briefcase is of value. It's gotta be important if you're carrying it in a briefcase, right?"

Even now, nearly 20 years after he first started experimenting with making hot honey in his college apartment, Kurtz has an obvious passion for the product. And it's his enthusiasm that inadvertently spawned a business that has captured a 2.5% share of the $1 billion U.S. honey market.

Here's how Kurtz built up Mike's Hot Honey from just a hobby into a company poised to bring in more than $40 million over the next year.

From an early age, Kurtz had a desire to be a "condiment man." He had a chance run-in with Larry Raymond, co-creator of the popular Sweet Baby Ray's barbeque sauce, during his freshman year of college. The interaction, he says, left him feeling inspired. 

"I realized that condiments truly elevate food," Kurtz tells CNBC Make It. "And I've always been into cooking. I saw Larry and how much fun he was having selling barbecue sauce and I thought: 'You know what? This might be the life for me." 

Fast forward a few years to 2004 and Kurtz was a junior studying abroad in Brazil. On a weekend trip in a national park, he and his friends hiked down to a valley where they encountered a pizzeria that featured something Kurtz had never seen before: jars of honey with chili peppers in them sitting on every table. 

"The first time I tasted the combination of honey and chili peppers on pizza it blew my mind," Kurtz says. "It was so delicious that I realized I wanted to try to make it for myself." 

During the fall of his senior year, Kurtz began experimenting with his own hot honey in his college apartment. 

Rather than recreate exactly what he had tried in Brazil, Kurtz wanted to put his own spin on the condiment. In fact, he already had a name for it: Mike's Hot Honey. He tried different types of peppers, different types of honey and various techniques for infusing heat into the honey. 

Eventually, he settled on the recipe that would one day be sold at more than 30,000 retailers and restaurants across the nation. 

"It's a lot hotter, more chili forward and has a much stronger kick than what I tasted in Brazil," he explains. "You taste the sweetness and the floral notes of the honey first, and then there's a one second delay before that signature kick on the back of your palate." 

Despite having the official-sounding name, the sweet pizza topping was nothing more than a hobby for Kurtz. He originally made it only for himself, but as soon as people got a taste, he started getting requests. 

"I was making Mike's Hot Honey for my own personal consumption on pizza," he says. "Pretty quickly my friends and family noticed it and I started making it around the holidays to give out as gifts." 

That all changed a few years later. Post-college, Kurtz was working in the music industry as an assistant to a booking agent and indulging his pizza-making habit in his free time. 

He would spend hours exchanging tips with fellow pizza aficionados on a blog called Slice, where he first encountered a pizza maker named Paulie Gee who would soon be opening a pizzeria in Greenpoint, Brooklyn close to where Kurtz lived at the time. 

When Paulie Gee's eponymous restaurant opened in 2010, Kurtz went to try the pizza and meet the man behind the pies.

"I started peppering him with questions about his process for making dough and how the oven worked," Kurtz says. "And by the end of the conversation, he could tell that I was really into making pizza and he asked if I would be interested in coming in as a pizza apprentice." 

Soon enough, Kurtz was working evenings at the pizzeria, practicing stretching dough and working the oven until he was deemed ready to start making pizzas. 

Just a few days into his apprenticeship, Kurtz brought in a bottle of his homemade honey. Paulie tasted it and then drizzled it on a hot soppressata pizza. He quickly asked Kurtz if he would be willing to make his hot honey for the restaurant.

"I was flattered," Kurtz says. "I was obviously a really big fan of his pizza at that point, and excited to have this incredible vehicle for people to try Mike's Hot Honey." 

Kurtz started producing honey by the gallon. It was the star ingredient of the Hellboy, a pepperoni slice topped with a drizzle of honey that is still a best-seller at the pizzeria to this day.

"I'd be in front of the oven stretching dough, and I could see people's reactions to tasting Mike's Hot Honey on their pizza," Kurtz says. "It was like 'Holy s--t, this is incredible.' And people started coming up to me asking if I was the honey guy and where they could buy it." 

Kurtz began his apprenticeship in August of 2010. By November of that same year, demand for to-go bottles of his honey was so strong that he decided he needed to put a label on the bottle so that he could sell it off the bar. 

"I would go in the back of the pizzeria and fill up a little pint container with honey and sell it for cash behind the pizza oven," he recalls. "And I did that for a few months before I realized it was time to start bottling it." 

At first, scaling his production was easy. The restaurant was closed on Mondays, so Kurtz would come in while the kitchen was empty and spend the day making batches of hot honey. But eventually Paulie Gee's moved to seven days a week, forcing Kurtz to change his approach. 

"The only time I could do production was at night after the restaurant had closed," he says. "I'd be in there from midnight till six in the morning just bottling, capping and labeling bottles of Mike's Hot Honey."

Word of the spicy topping at Brooklyn's hot new pizzeria quickly spread. Soon, Kurtz was fielding orders from restaurants and specialty retailers around the city. 

Though Kurtz had initially envisioned Mike's Hot Honey solely as a pizza topping, he was surprised to see the creative uses other restaurants were finding for his product.

"I really imagined it as just a pizza condiment," he says. "But once it got into the hands of chefs who were far more talented in the kitchen than I am, they started using it on everything." 

While pizza and fried chicken are still the two most popular delivery vehicles for Mike's Hot Honey, it has also found its way into salads, craft cocktails and even ice cream. 

By 2011, Kurtz had launched a one-man distribution operation. 

"I used to drive around New York City in my 1995 Geo Prizm with a trunk loaded up with honey," Kurtz says. "I'd make deliveries to local retailers and restaurants and bottom out on all the potholes. But those early restaurant partnerships set a foundation that the brand has really benefited from and still benefits from today." 

Kurtz's burgeoning business got its big break in 2014 when a local Whole Foods buyer contacted him about selling Mike's Hot Honey at one of its New York locations. At the time, it was the first supermarket to carry the product. 

As the profile of Mike's Hot Honey grew, Kurtz decided it was time to leave Paulie Gee's and bring in someone to help him take the business to the next level. He enlisted Matt Beaton, a friend from his days at UMass Amherst, to serve as the company's CEO beginning in 2015. 

Beaton helped scale up burdensome aspects of the business, such as packing, picking and shipping boxes. He helped find fulfillment centers and vendors.

When Beaton came onboard, Mike's Hot Honey was bringing in $100,000 a year in revenue. By the end of Beaton's first year as CEO, that figure had grown sixfold to $600,000.

One of Beaton's biggest tasks was spearheading the process of raising the millions of dollars in investment necessary for Mike's Hot Honey to be able to take on the large orders it was receiving from big customers. 

Over three funding rounds, Mike's Hot Honey raised $12 million. That money allowed it to not only carry more inventory and service orders on time and in full, it also helped Kurtz and Beaton grow their corporate team. 

The way Kurtz and Beaton saw it, they had two options for growing their business: developing other products under the Mike's Hot Honey brand or doubling down on their star condiment. 

Instead of coming up with a lineup of different flavors, Kurtz and Beaton chose to focus on different use cases. 

While the 12-ounce squeeze bottle is still far and away the most popular product they sell, Mike's Hot Honey also produces sizes ranging from gallon jugs and 24-ounce chef's bottles to 0.5-ounce squeeze packets, 1-ounce dip cups and 1.55-oz mini glass jars for gifting. 

"I think marketers and brand builders oftentimes lose focus and start to go on to what's next before they get the full potential out of what makes their brand special," Beaton tells CNBC Make It, noting that less than one percent of U.S. shoppers have ever bought Mike's Hot Honey.

"We remind ourselves every day that we have lightning in a bottle. And the vast majority of this country still has yet to try it." 

It wasn't until 2020 — 10 years into the company's lifespan — that Kurtz and Beaton felt it was time to add a new product to the lineup: Mike's Hot Honey Extra Hot. The even hotter honey is about 10 times spicier than the original. 

These days, it seems like Mike's Hot Honey is everywhere. 

In addition to being sold in more than 30,000 retailers and restaurants, the brand's signage decorates windows of pizzerias across the country and it has embarked on high profile collabs with brands like Utz, Austin Eastciders and First Watch. Most recently, it announced a partnership with national chain Marco's Pizza to offer a limited-time pizza drizzled with honey.

As the popularity of Mike's Hot Honey has grown, so too has the army of competitors trying to get a cut of the pie. Not that the competition bothers Kurtz one bit. 

"We believe [our competitors] really bring awareness to the category at large and validate what we're building as a brand," he says. 

Talking to Kurtz, you get the sense that even if he hadn't met Paulie Gee through a pizza blog and accidentally launched his honey at one of the New York's trendiest pizzerias, he'd still be happy making Mike's Hot Honey at home and giving it away for free.

"I really had no idea that this would become a business," Kurtz says. "I was just a fan of the combination of honey and chili peppers on pizza and was excited to share it with my friends."

DON'T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter!

Get CNBC's free Warren Buffett Guide to Investing, which distills the billionaire's No. 1 best piece of advice for regular investors, do's and don'ts, and three key investing principles into a clear and simple guidebook.