The Book of the Week is “McIlhenny’s Gold, How a Louisiana Family Built the Tobasco Empire” by Jeffrey Rothfeder, published in 2007. This book tells the history of a company that sells hot sauce.
A man named Edmund McIlhenny started the company in southern Louisiana in the 1870’s. He developed a method for making the sauce so that it was very consistent from batch to batch, and its production was not easily imitated. Due to his marketing savvy, the product was soon distributed in California, Nevada, Maine and Florida– “…anyplace with telegraph lines, paved roads and train depots.” His son died in 1949.
One of his son’s sons took over the business. In order to attract a reliable workforce, he created a company village– a compound where white employees both worked and lived (almost rent-free). Black employees commuted, and held difficult, low-level, pepper-picking jobs.
Through secret political machinations, the family was able to get the sole right to use the name “Tobasco” even though competing companies had also been using it during the whole prior time.
When the company, still privately held, was well over a century old, it began to lose its grip on market leadership due to various factors, including American dietary trends, refusal to maximally automate its operations, lack of strong leadership, and growing list of family shareholders.
Read the book to learn of the company’s strengths and weaknesses, and looming opportunities and threats going into the first few years of the 2000’s.