The Tabasco Family Business

The Saturday Times recounts the history of the McIlhenny Company, a family business since 1868. They've avoided some of the pitfalls of running a business and a family. And they make hot sauce!

Though I could, the Times couldn't resist a silly headline.

This Family's Hot Stuff - New York Times

The McIlhenny Company, the maker of Tabasco, is one of the country's biggest hot sauce makers. Its fiery condiment has become so popular that its name is a generic term for hot sauce. Less known is that the family has weathered storms, both personal and economic, to keep the business going since its founding more than 130 years ago.

Now in its fifth generation as a family-run business, the McIlhenny Company is operated by an eight-member board that is largely part of the extended family. All of the 145 shareholders either inherited their stock or were given it from another living family member.

But in practice, only two to four family members typically run the company because it is so big and the family does not want it to become insular and resistant to change. They make sure decisions are transparent and issue financial statements every quarter to their shareholders.

"They have a good process for how they make decisions," said Ann M. Dugan, executive director of the Institute for Entrepreneurial Excellence at the Joseph M. Katz Graduate School of Business at the University of Pittsburgh. "They've taken the emotionality out of it. Once you get into the third and fourth generations, you're looking at cousins with different experiences and family. It's easier to become factionalized."