Tucked away from the cold inside a snug polytunnel on a south Gloucestershire hilltop, new seedlings are being cosseted, with heat blankets beneath their pots. Louise Duck has grown each from seed and will transplant them by hand into the warm raised beds that are waiting for them when they are a little bigger.

It is a lot of tender care for a plant that bites back, but then chillies are quickly becoming Britain's latest food love affair. The British climate is hardly suited to the cultivation of exotic fruits and vegetables, but the rising numbers of farmers and amateurs who are now producing homegrown chillies bears testament to their rapidly growing appeal. Long found on "world" food aisles, chillies are now to be found in products from beer and cider to chocolate, ice-cream and hot cross buns, while British-produced chilli jams and chilli sauces are moving out of the farmers' markets and becoming online bestsellers.

This summer there will be a proliferation of chilli festivals springing up, from Perth to Birmingham to Brighton, and also here at the Upton Cheyney Chilli Company on Manor Farm, in the Cotswolds between Bath and Bristol.

Last year about 4,000 people made the pilgrimage to the festival at the 17th-century farm with its little shop, where Louise and her husband, Alex, sell their homemade chilli sauces, chilli jams, chilli hams and sausages. Megalodon, one of their sauces named after an extinct and vicious shark, has its own Facebook appreciation page set up by fans. They have opened a campsite to cope with interest in chilli farming and are hosting weddings in the ancient tithe barn. "Chillies do make people smile, it's all those endorphins," said Alex, who will hand-harvest about 500,000 chillies from 10 varieties this year, and hand-slice 15,000 to be oak-smoked on site for their chipotle chilli sauce.

"They are costly to grow, they like sun and heat, and we don't have too much of that here, but the interest is just growing all the time and it's great. I don't know if people realise how much goes into producing one bottle of chilli sauce and UK growers are very small-scale, but they are such beautiful things, such amazing colours and there is something really special about growing chillies."

Scone Palace in Perth, where Scottish kings were crowned, is hosting a chilli festival this year, while the Fiery Foods UK Chilli Festival in Brighton in September is expected to be the biggest ever. Brighton has two dedicated chilli shops. At Chilli Pepper Pete's in Trafalgar Street, the surprise is that most of the hundreds of products lining the shelves are grown and produced in the UK. It has become an essential food shop, said one customer emerging with assorted bottles of racily named sauces.

"I never tasted chilli until last summer, now I can't imagine a meal without them," said Simon Dobbs, 29. "I've got a bit of a collection of sauces actually. Can't get enough of it – cook with it, throw it on everything, really. Got quite a few new ones for Christmas, which was great. I haven't tried growing my own yet, but I'd like to have a go." The shop's owner, Miranda Pellew, said: "We are seeing some real chilli connoisseurs now who can differentiate between all the different flavours. Brighton is a bit of a chilli hotspot, with growers springing up around in Sussex and the Fiery Food Festival here in September."

Christopher Columbus brought the first chillies to Europe but until recently they were grown in the UK only as botanical curiosities. Now, says Pellew, it could well be this year's gardening craze. "It started as a bit of a cult thing but it's really coming into its own this year; we're selling loads of seeds at the moment. More and more people are coming in, saying, 'Oh, I don't do chilli', and then trying them for perhaps the first time in their lives, then they're coming back for more. There's a lot of humour in chilli, the sauces all have fantastic names; our Dragon's Blood is a cult classic for example, and people love it. But it's not all about heat tolerance; alongside the bravado there's a nice foody side to it too.

"It's not about travel any more. We're so cosmopolitan and global, it's not about tasting chilli in Mexico, it's about having it as part of life at home."

A Dorset Naga chilli pepper. Photograph: Alamy

Paul Rozin, who lectures in psychology at the University of Pennsylvania, has studied what makes chilli the second-most craved flavour after chocolate in the US. He suggests that eating chillies is an example of a "constrained risk", like riding on a roller-coaster, in which extreme sensations such as pain and fear can be enjoyed because the person knows they won't be hurt in the end. This method lets people experience extreme feelings without any risk of bodily harm. Rozin calls the craving for chilli "benign masochism", a harmless way to stimulate the body's pain sensors. In Dorset, Michael and Joy Michaud are running Sea Spring Farm, where they produce and sell Britain's hottest homegrown chilli, the Dorset Naga. It has made them famous in the chilli-head community. They are keen to encourage other growers to experiment with the plants and are currently running Britain's Hottest Chilli competition.

For those who don't grow their own, there will be a proliferation of chilli-eating competitions around Britain this summer, although participants stand to lose more than a bit of sweat and tears in these tough contests, says Alex Duck.

"The contests are always a crowd-puller. People like to see others suffer. We have a bloke who always won the contest, he did really well and could eat anything, but one time his tolerance just wasn't up to it and he had to bow out halfway through. Well," said Duck shaking his head sadly, "he went that day from Chilli Dave to Dave Milk. He's never lived it down."