Taco sauce or salsa
What's your preference? Should I serve both at my taco party?
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I know this is probably after the fact, but if I were doing tacos for guests I'd most likely offer 3 "sauce" toppings - a chunky red salsa, a smoother red taco sauce, & a green salsa. Most likely would offer Pico de Gallo as well, but for me that belongs more in the "toppings" category than sauce.
As for cilantro, since it's so contentious, I'd offer a bowl of it chopped on its own in the "toppings" area.
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The liquidy red sauce like what they have at Taco Hell is also called salsa. They are just different kinds of salsas. The liquidy kind would typically be like a rehydrated chile piquin or chile de arbol based sauce. The thicker kinds would have more ingredients in them and be tomatoey with a lot of room for variation, cooked or raw, some roasted ingredients, and many more options, probably a ranch style or basic red is what you have in mind. Then you have the entire green category, just as varied as the red. And then you have what are chopped/picada sauces like pico de gallo (salsa bandera or salsa fresca). I mean, there are really so many varieties.
A favorite salsa of mine is salsa de ajonjoli which is a red chile de arbol based sauce with roasted sesame seeds ground in it. It is delicious.
I like all kinds. I find myself pairing green with chicken and red with beef or goat, too. You could put representations of all four kinds on the table just for fun.
I like to make salsas at home since it is super easy. However, I come from TX where there isn't a salsa section but a salsa aisle at our local grocery store. Now I am also in the DC area and our store bought salsa options here are fairly limited. If you want to keep it simple, I recommend the Herdez brand (even the canned is OK but jarred tastes better). Herdez Salsa Casera and also Salsa Verde are pretty good, not all vinegary like so many other jarred salsas. Go for Salsa Valentina for the thin hot Taco Hell style sauce. Whatever you go for, make sure it has no thickeners like corn starch. Sauces with stuff like that in them are just yucky.
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Pico de gallo is a salsa you see a lot of here in So Cal. It is a mixture of chopped tomato, onions, jalapeno (or other chile), garlic and cilantro. It is fresh and has no thickeners of any kind.
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"Is it just that sauce is thinner?"
No. These are two different condiments. I must assume you have actually seen and tasted both. One might think of salsa as a relish.
Most taco sauces on a supermarket shelf will taste very similar. On that same shelf you might find tomato salsa, corn salsa, peach salsa, black bean salsa, etc.
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re: fldhkybnva
No, the difference is not in consistency.
Taco sauce is generally based on dried chiles, onion and seasoning and may or may not have tomatoes in it. This type of sauce may also be cooked. By cooked, I mean the ingredients are probably roasted before being blended. It could also be cooked after everything is blended to reduce or meld the flavors.
Salsa is generally a tomato (or tomatillo in the case of salsa verde) based sauce to which fresh chiles and seasonings are added along, often with other complimentary add-ins like fruit or corn. This type of sauce is almost never cooked.
Personally, I like fresh green salsa cruda with chicken tacos, but this is more Cal-Mex than Tex-Mex. For the ground beef, Taco Bell-style tacos, the thinner, cooked dried chile based taco sauce is the best bet. Rick Bayless has a good taco sauce in his book Salsas That Cook. The recipe title is Mellow Red Chile Sauce and it can be scaled for various yields (always handy for a party) and he gives various chile substitutions as well that you could play around with. The recipe is pretty solid, I've made it thousands of times. It's easy and almost never fails.
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