Two new books reach different conclusions about the 140-year-old story of the McIlhenny Co. and family, makers of the world famous Tabasco sauce.
Jeffrey Rothfeder got the idea for McIlhenny's Gold from his agent, who, while holding a bottle of Tabasco, simply wondered aloud what the story was behind the ubiquitous pepper sauce. Rothfeder approached the McIlhenny Co. with his proposal, but CEO Paul McIlhenny declined to participate, stating that the company's archivist, Shane K. Bernard, was already working on a book. Rothfeder secured a book contract anyway with HarperCollins, without McIlhenny's cooperation.
A former news editor with BusinessWeek, Time and Bloomberg News, Rothfeder has also written for The New York Times and The Washington Post. He's appeared on 20/20, Nightline, Today, Good Morning America, and Oprah and is the author of Every Drop for Sale: Our Desperate Battle Over Water and Privacy for Sale: How Computerization Has Made Everyone's Private Life an Open Secret.
It took Rothfeder more than three years to tell his version of the McIlhennys' story. "This is my sixth book, and I thought from past experience I would be able to get it done a lot more quickly," he says in a phone interview. "But it was a harder book to write than I expected, maybe because of the McIlhennys being pretty secretive. So not having access to the material and access to the top people on the record added a level of difficulty which meant I had to open up new sources."
Rothfeder relied on academic papers, some 50 interviews he conducted, and past newspaper and magazine articles. "Most were written favorably to the family," he says. "They tended to be puff pieces, but I could pull out certain information I needed. I just basically found everything I could. I definitely got the most information on them than anyone's ever been able to produce. There's been a couple other books that have mentioned the McIlhennys over the years, but this is really the only one that tells the story of the family."
Bernard's book, Tabasco: An Illustrative History, relies on primary source documents from the family and the company's archives. According to Bernard, it's completely coincidental that in the company's 140-year history, two books focused on the history of the family, the company and Tabasco sauce are being released within a month of each other. "I know it's hard to believe," he says, "but it is. I certainly wouldn't have wanted it that way." McIlhenny Co. is self-publishing his book, but Bernard says the company had no hand in editing any of the history of the book. "I was pleasantly surprised at how much I was able to write," he says. "For example, the NASCAR Team Tabasco incident is not one that's been remembered here very pleasantly. The race car was beautiful and everything ' we had great drivers, Todd Bodine and Darrell Waltrip ' but it just didn't go anywhere. We never won any races. It was a fiasco. But I mentioned it, and nobody said anything."
In McIlhenny's Gold, Rothfeder paints Bernard as a McIlhenny hired gun charged with the duties of a PR flack. He contends that Bernard was ordered by the family to whitewash the story that Edward Avery McIlhenny (son of Tabasco founder Edmund) was responsible for unleashing the destructive scourge of the nutria on south Louisiana. But in a 2002 issue of Louisiana History, Bernard directly addressed McIlhenny's involvement with the nutria: "...while McIlhenny purposely released a small number of nutria in 1940 and a substantially larger number by late 1945, he was neither the first nor even the second nutria farmer in Louisiana; nor was he the first in the state to set loose the animals intentionally; nor did he import them from Argentina ' all claims that were previously accepted as indisputable and, like nutria themselves, proliferated wildly."
Rothfeder finds it strange that McIlhenny Co. would even hire a full-time archivist, especially considering the company's small size of only 200 people. Not even IBM has a company historian, he says. "What it says to you, I believe, is that it's a company that wants to protect their history, or protect their telling of the story. Look, as I tell in the book, the job [Bernard] was working on when I first met him was trying to clean up the nutria story so that 'Mr. Ned' [McIlhenny] wasn't saddled with being the one who introduced nutria to Louisiana. The fact is he really did. They may have been nutria around as well from others, but he was the one who really introduced it to Louisiana, and there's no way around that. But you know you put a guy on payroll to clean up that story. That's kind of an interesting thing to me, and something certainly that most other companies wouldn't do."
Bernard points out that it's not unusual for companies with "iconic status" ' like The Walt Disney Co. and Harley-Davidson ' to hire historians. Bernard started working for the McIlhenny Co. in 1993, on what was supposed to be a six-month stint to research the life of John Avery McIlhenny, another son of Edmund's who was a former Rough Rider and friend of Teddy Roosevelt. "We have a lot of papers and letters and documents that the family kept, and they were in disarray," says Paul McIlhenny. "He's debunked some of the family myths, and those that he doesn't know he's perfectly honest about."
Bernard's previous books include Swamp Pop: Cajun and Creole Rhythm and Blues and The Cajuns: Americanization of a People, and Cajuns. The research he conducted for McIlhenny Co. has found its way into his new book, which was to be a companion piece for a Tabasco museum that was slated to open in New Orleans but was scrapped after Hurricane Katrina.
In the two books, the details of Tabasco's history vary widely, and the conclusions paint two different portraits of a family and its famous fiery pepper sauce.
McIlhenny's Gold begins with the old myth of how Tabasco founder Edmund McIlhenny came to acquire the seeds for his peppers and his Tabasco sauce, from a Confederate soldier named Friend Gleason early in the Civil War. McIlhenny planted the seeds and then fled the island with his family in advance of a Union incursion. When he returned to the island after the war, he found the peppers still growing in the rubble of his former life. The peppers would make the first batches of what was to become Tabasco pepper sauce. Rothfeder writes in McIlhenny's Gold: "This desire to sugarcoat the truth is a recurring motif in the story of McIlhenny Co. The family has historically relied on half-lies and legend to embellish the image of its pepper sauce, generate increased sales, eliminate rivals and adorn the McIlhenny myth in southern Louisiana."
"Until recently," Bernard writes in Tabasco, "mythology obscured much of the history of Tabasco sauce and the early McIlhenny family." Bernard says the family legend has Gleason as a veteran of the Mexican-American War, and that either way, the "account is largely untrue," and how McIlhenny acquired his peppers still remains a mystery.
"It would be difficult to find another company so mysterious (and uncertain) about the genesis of its flagship product," writes Rothfeder. "But then McIlhenny Co., one of the most profitable and oldest family businesses in U.S. history, has made a habit of being out of sync with the rest of corporate America. â?¦ [T]he company (and the family) has remained anonymous, while its product, Tabasco sauce, has taken its place among the best-known brands in the world, a category killer whose name is the market classification, like globe-straddling goliaths Coke, Kodak and Kleenex." Rothfeder estimates that McIlhenny Co. is a $250 million a year family business (including royalties from its oil, salt and product licensing) that cranks out 600,000 bottles of Tabasco sauce every day for distribution in 120 countries.
Rothfeder contends that Edmund McIlhenny didn't even invent Tabasco sauce and points to Maunsel White's Concentrated Essence of Tabasco Peppers, a predecessor to McIlhenny's sauce. "Although the McIlhennys have tried to dismiss the possibility," writes Rothfeder, "it seems clear now that in 1849, a full two decades before Edmund McIlhenny professed to discover the Tabasco pepper, White was already growing Tabasco chilies on his plantation."
Bernard counters that it's been proven that the two men used different techniques (White cooked his peppers and McIlhenny fermented his) to make their sauce and that White's was only sold and marketed to the public by his family after his death, long after McIlhenny had established his Tabasco sauce. Bernard adds: "Whether or not the peppers are the same, nobody knows."
There are specific product names ' like Kleenex, Xerox and even Dumpster ' that have become part of our lexicon, specific names which have come to be understood in general terms. But the name "Tabasco" is unique in that it was a general name that's now recognized by the federal government as a specific product that describes McIlhenny Co.'s pepper sauce. The word originates from the Tabasco region of Mexico where the peppers are thought to have originated, and during Edmund McIlhenny's day, Bernard says his research indicates that the word was used rather loosely. In 1906, with a federal trademark law recently established, McIlhenny registered "Tabasco" as a trademark with the U.S. Patent Office. "So between 1868 and 1906," Bernard says, "our lawyers contended, ultimately successfully, that the term Tabasco had acquired a secondary meaning in the marketplace that was associated largely with McIlhenny Co., and that it wasn't until a few years earlier, around 1900, that a number of imitators popped up. That's how we were able to claim that trademark."
Rothfeder writes that when McIlhenny Co. applied for the trademark, it falsely claimed that no other product contained the name Tabasco, even though there were a dozen products on the market that had used the word. B.F. Trappey, a former blacksmith for McIlhenny who made his own Tabasco sauce, raised such a ruckus about the trademark that it was rescinded three years later. But in 1918, the U.S. Court of Appeals for the Fifth Circuit overruled the trademark office and gave McIlhenny the sole use of the name again. Rothfeder writes that the court overlooked McIlhenny's fabrication and the evidence presented by Trappey (that Maunsel White had originated the sauce) and instead chose to rely on the myth of Friend Gleason as evidence. Trappey fought the decision for the next 30 years until he ultimately lost. Rothfeder writes that since the decision, the McIlhennys have vigorously protected their trademark and threatened lawsuits when necessary in order to protect it.
Bernard is aware that there are those who don't believe the company should have the legal right to the name Tabasco. "But you have 109 years of litigation that say otherwise," he says. "There were a few cases in the early days in which we did not prevail, but by around 1920, the last of those difficult cases was over with, and since then it's all simply been a matter of precedent. On one hand, you can continue to argue about the subject, but federal judges for the past, at least 80 plus years, beg to differ."
Rothfeder hasn't heard a word from McIlhenny Co. about McIlhenny's Gold. "It's a little surprising," he says, "because as you know, the way they protect their trademark is that they threaten to sue anybody that touches the word Tabasco."
Rothfeder is no stranger to the courtroom or controversy. In 1998, a federal judge ruled that he had fraudulently obtained information from a credit reporting agency for a 1989 news story but denied any punitive damages, ruling that his work was in the public's interest. That same year, two other incidents found Rothfeder in the headlines.
The New York Observer wrote that tension was at an all-time high for three Bloomberg reporters who penned the book The People vs. Big Tobacco. "After busting their tails to crank out the in-house book in record time with little financial incentive, Bloomberg sources say that the three reporters have had to sit back and watch as their bigfooting boss, Jeffrey Rothfeder, the head of Bloomberg's national news desk, has taken the lion's share of the credit."
After leaving Bloomberg, Rothfeder was appointed managing editor of CNBC when The Washington Post reported "things hit a little snag." The Post reported that Rothfeder had incorrectly stated on his résumé that he had a degree from the University of California at Berkeley. Rothfeder told The Post he never claimed he was a Berkeley graduate on his résumé and was a victim of a rumor campaign. He didn't take the new job, and two years later he dismissed The Post's story, stating that the report had been based on anonymous sources. "Nobody pays any attention to that," he told the San Francisco Chronicle.
When asked about where he obtained the annual revenue figure of $250 million for the private McIlhenny Co., Rothfeder would only tell The Independent Weekly, "Two or three different sources who know their books pretty well." If anonymous sources were a problem for Rothfeder in the past, they weren't for McIlhenny's Gold. He writes, "Some of the people I interviewed are quoted in the book; others asked that their names not be used because they did not want to anger the extremely guarded Avery Island McIlhennys, who formally declined to participate in the project."
By the end of his book, Rothfeder has painted the portrait of a lucrative family-owned company at a crossroads, faced with the options of either holding onto the traditional ways of doing business and dying off or embracing new possibilities in order to survive. He says, "They're going to have to become less inbred and less insular, have some outside management come in and do a real close look at what they're doing ' do some soul-searching ' and maybe they can come out of this OK." Rothfeder says the McIlhenny Co.'s last attempt to become "less inbred and less insular" didn't go so well. It's what Bernard has referred to as the "NASCAR Team Tabasco incident."
During the late '90s, Rothfeder writes that Vince Pierse, the only non-family member in the company's history, was named McIlhenny Co.'s chief executive. During his tenure he mounted an aggressive and expensive marketing campaign to build the Tabasco brand. Part of the plan included an annual $15 million sponsorship of a NASCAR racing team. Rothfeder believes Pierse was sacked before his ideas could take root and that it was the first real opportunity the company had to bring in fresh ideas from outside the McIlhenny bloodline to reinvigorate Tabasco.
Bernard writes of this period: "Following a short-lived experiment with the only non-family president in the company's history ' an interregnum that witnessed an unsuccessful NASCAR® Winston Cup racing endeavor called Team TABASCO ' Paul C.P. McIlhenny assumed the presidency of McIlhenny Co. in 1998 and two years later became its CEO."
Paul McIlhenny won't comment on Rothfeder's accusations, but it's apparent that it's a time in the company's history that still irks him. "Vince was never our CEO," he says. "I think Vince's title was chief operating officer, but he was never chief executive officer. So yeah, he would have been involved in many things, in marketing as well as NASCAR. I'm the current president and CEO, and Ned McIlhenny Simmons was president and CEO before me. So all of the chief executive officers in McIlhenny Co. have been family members."
Rothfeder contends there's increasing competition from within the niche market of pepper products, and cheaper brands are cutting into Tabasco's market share. Add to that a declining profit margin, rising costs, and more dividends to pay out to more heirs of Edmund McIlhenny, and Rothfeder says McIlhenny Co. has a real problem on its hands. "They're in a lot of trouble at this point," he says, "and I don't know the way out for them. Their great business model and their belief in their past has now put them in a bind, and that combination of things will make a difficult future for them. The good news is they could sell their company to Kraft or Campbell's or whomever and get $2 billion for it, and that's a lot money. They could share the money and walk away."
It doesn't appear as if McIlhenny intends to do any such thing any time soon. Paul McIlhenny points to the six flavors of Tabasco, the co-branding with other national food products, royalties on the branding of slot machines, licensing the brand for an online and catalog business, as well as the Tabasco Country Stores on Avery Island and in New Orleans. "Our brand share has remained solid, if not grown, the last few years," he says. "We're very pleased with our marketing allocation and our marketing programs and our new products." He estimates that 20 percent of the company's business is derived from outside the pepper sauce lines. "Over half of our business is in the restaurant segment, nationally," he says. "That's very important, and our franchise has grown there as well in the last few years, particularly in front of house where consumers ask for the product at the table. We're also in the kitchen where the chef uses it. So to me, our growth in revenues, our growth in profits, our growth in dividends, our growth in marketing budget to support the brand are all signs of vibrancy and solidity."
"The reason their book is coming out is because of my book," Rothfeder says. "That's my opinion, but they didn't tell me that. Look, they're self-publishing it, so I'm not concerned about that book from the perspective of the real world of book publishing, meaning that no one's going to review their book since they're self-publishing it. And it's not really competition because it's like 40-something dollars, and it looks like it's going to be more like a coffee table book. And the history is going to be what the company wants the history to be. But I certainly feel that they're coming out with a book because of my book, because they want to steal some of the thunder from that."
Paul McIlhenny also won't comment on Rothfeder's book. "We told Jeffrey we weren't going to approve his manuscript or read it, and we haven't," he says. "So I'm just loath to comment on it after the fact, because he didn't have the resources that Shane had. There may be some personal umbrages taken, but I think the mystique of Avery Island and the brand is strong enough to survive an unauthorized version and hopefully made stronger by Shane's effort."