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Some like it hot, and that helps Tabasco

‘Business Nation’ looks at a 7th-generation family business and iconic brand

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  The history, business of Tabasco
March 10: ‘Business Nation’s’ Jon Frankel goes to Avery Island, La., to learn more about how the sauce came to be and how the family has managed to keep things running for more than a century.

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By James Segelstein
CNBC
updated 2:21 p.m. ET March 11, 2008

About 120 miles from New Orleans, the McIlhenny family bottles a precious liquid — Tabasco sauce — sold in more than 160 countries with labels translated into 22 languages. And although the family won't reveal much about its company's finances, some outsiders estimate those little bottles pull in about $250 million in sales each year.

The only place where Tabasco sauce is made is here on Avery Island. It's actually not an island at all. Three miles from the Gulf Coast, deep in Cajun country, the company home is a 2,500-acre dome of solid rock salt, formed when ancient seabeds evaporated.

The dome's surface soil is perfect for growing what it's most famous for, peppers. But peppers don't grow here naturally. They're here thanks to Edmund McIlhenny, a New Orleans banker, who moved to Avery Island with his family following the Civil War and shortly after came upon some pepper seeds.

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Dr. Shane Bernard, the McIlhenny's full-time historian, says the source of the seed pods is a bit fuzzy, but they probably came from a soldier who'd been in Mexico fighting, or hiding.

"We know that he got them around 1866," Bernard said. "And sometime between 1866 and 1868 he perfected this recipe for Tabasco sauce."

McIlhenny's original recipe notebook is one of the company's most prized possessions. "My pepper sauce is made thus," he wrote. "To each gallon of ripe fruit add one coffee cup full of salt then mash thoroughly."

"In the old days, as now, we would smash the peppers, but back then it had to be done by hand," Bernard said. "The workers would take a pestle and a sieve made out of cypress or metal and smash the peppers through the sieve."

The sauce was mixed and fermented in stoneware jars and bottled in cork-topped cologne bottles before being shipped out, a five-day trip even to nearby New Orleans.

By the turn of the century, with a little push from the McIlhenny Co., Tabasco was becoming a household name. Proper ladies were advised that a bottle was a must on their dining room tables. And its presence was being requested farther afield.

When England's Lord Kitchener invaded Khartoum just a decade after Tabasco was first exported, Tabasco sauce came along. As it did some years later with another famous Brit, who discovered King Tut's tomb.

"We've got the photograph of Howard Carter in the tomb of Ramses XI where he and his fellow archeologists would eat lunch. This is around 1922 when he was searching for King Tut's tomb nearby in the Valley of the Kings." Bernard said. And right there on the table is a bottle of Tabasco sauce.

Through the 20th century, the world enjoyed Tabasco — one drop at a time.

The sauce has even appeared on — or over — dining tables out of this world. It has made its way into orbit to give shuttle astronauts' food packets a boost.

The secret to going from a backwater bayou to Earth-circling success? Jeffrey Rothfeder, author of "McIlhenny's Gold," says the answer is in the family's decision not to diversify.

"They could've invented Tiddly Winks, and then they would've been experts in that. It's just a focus that this family has put on the product," Rothfeder said. "The brand and the company being the most important thing that they do."

With their focus has come unusual longevity as a family business — 140 years.