Adding Heat to Global Warming with Tabasco
Also known as Cajun Ketchup, Tabasco's recognizable bottle has been a staple in kitchens world wide. Most are not aware, however, that this brand is manufactured and produced in only one location in the world. As global agriculture and trade becomes increasingly affected by climate change, how will Tabasco respond going forward?
A brand near to hearts (and heartburns) – Tabasco. Born and bred in Louisiana, this hot sauce has a 150 year history. Since founder Edmund McIlhenny first started his business in 1868, family-owned Tabasco grew to be a internationally loved brand that made it to space (1). However, Tabasco is under siege by climate change.
One hundred forty miles west of New Orleans, Avery Island is a salt dome rising above south Louisianan marsh. The dome houses Tabasco’s only factory and its only mine. Half of the workers still live on or around the island and have worked there for generations. Even the peppers were singly sourced from here until 1965, when other farms in Latin America were selected as growing space ran out (2). However, Avery Island is still used for growing heritage seed crop for seeds sent abroad.
Like other agricultural products, the chili pepper (capsicum) is susceptible to changes in climate. Growing conditions impact taste and spice level, so peppers sourced from different areas are blended to arrive at the uniform taste of Tabasco before they are turned into mash and aged for 3 years (2). The raw feedstock and long throughput time adds to the supply chain complexity of Tabasco manufacture and distribution. The seed crops on Avery Island, the factory, and the salt are all in a part of the country exposed to frequent hurricanes and flooding. In 2005, flood water from Rita came within inches of the factory and shut down bottling operations for 6 days (3).
Over the long term, climate change will likely continue to affect agriculture, including peppers, driving further diversification across continents. Some concerns have already been raised about food growing regions of Central and South America as trends show decreasing rainfall inland and more weather variability (4). Getting the same yield may require more irrigation or nutrients, increasing cost. For Louisiana specifically, a combination of rising sea levels and erosion means that the state is losing 25 square miles of land per year (5). In addition to impact on coastal 
communities, tropical storms of increasing severity will not be as dampened by surrounding marshland. Louisiana’s low-lying road and power infrastructure are also highly susceptible to flooding and the levee systems impede natural flood water drainage if overtopped (5). Extreme heat projected for the American South (6) can increase difficulty growing seed plants at Avery Island. That all Tabasco is made at Avery Island, while incredible in its historical significance, also adds operational risk. Not only are the plant and mine increasingly vulnerable to flooding, the salt dome might become more difficult to access for shipping. The hub at Avery Island can become disconnected from its spokes.
In the short term, Tabasco has already taken some actions toward securing Avery Island. Resulting from the 2005 hurricanes, a 17 feet levee was constructed around Avery Island along with water pumps, and a backup generator was installed (2). Thanks to diversification, Tabasco crop supply was not interrupted by flooding. The seeds themselves were also kept in vaults. While the family has kept private about business plans going forward, they are likely also constantly assessing more locations for crop growth and additional ways to safe guard its factory and salt mine. Some other short-term actions can include:
- Adding technology to help manage the complex growing supply chain.
- Working closely with distributors to manage global delivery to the 187 countries(7) including warehousing decentralization.
- Using data to improve forecasting to account for the three-year aging process.
For the long term, the McIlhenny family has also been proactive in conservation projects around the island. This includes planting indigenous grass to slow erosion and build back protective marshland, and running a 170 acre Jungle Gardens biodiversity preserve (8). Some long-term actions that might prove valuable include:
- Diversification of seed storage and operations locations to offset interruption from localized weather events.
- Experimentation with new farming technologies to control rising costs, projected to increase faster than inflation (9), and improve yield.
- Employing information from the 2013 project to fully sequence the chili pepper genome for hints on improving drought resistance and increasing plant adaptability(9).
- Looking at alternatives such as hydroponics.
Some major questions remain to be answered:
- How much balance should there be between the tradition of a brand and the new challenges to supply chain brought on by climate change?
- Is there a role and what is the role of technology in safeguarding tradition?
While the McIlhenny family pepper traces back 150 years, serious challenges exist and thoughtful solutions are needed for the next 150 years. There is a silver lining to all this though – as temperatures rise, so too does the spiciness of peppers. Perhaps in the future we will find our hot sauces getting even better?
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References
- Tabasco. Tabasco. Our History. [Online] https://www.tabasco.com/our-history/.
- This Family’s Hot Stuff. Shevory, Kristina. Avery Island : New York Times, 2007.
- Inside Tabasco’s Hot Sauce Empire. CBS News. [Online] March 13, 2014. [Cited: November 10, 2017.] https://www.cbsnews.com/news/inside-tabascos-hot-sauce-empire/.
- Marengo, Jose et al. Climate Change in Central and South America. Copenhagen : CGIAR Research Program on Climate Change, 2014.
- What Climate Change Means for Louisiana. EPA. [Online] August 2016. https://19january2017snapshot.epa.gov/sites/production/files/2016-09/documents/climate-change-la.pdf.
- Gordon, Kate et al. Risky Business. 2014.
- Meyer, Zlati. Hot sauce industry sets tongues and sales ablaze. USA Today. [Online] July 30, 2017. [Cited: November 10, 2017.] https://www.usatoday.com/story/money/2017/07/30/hot-sauce-industry-fire-supermarkets-mcdonalds/519660001/.
- Rayapura, Aarthi. McIlhenny Family Using Tradition, Conservation to Safeguard its Famous Sauce. Sustainability Brands. [Online] April 4, 2014. [Cited: 11 11, 2017.] http://www.sustainablebrands.com/news_and_views/business_models/aarthi_rayapura/mcilhenny_family_using_tradition_conservation_safegua.
- Lear, Jane. Chiles: Good for Cooking, Good for Studying Climate Change. Take Part. [Online] September 16, 2015. [Cited: 11 13, 2017.] http://www.takepart.com/article/2015/09/16/chile-season.
Very interesting article June! I would be interested to find out 1. what is the proportion of Tabasco consumers that know about the fact that all seeds are grown on Avery island and 2. how does this fact affect Tabasco’s brand equity. I personally love Tabasco and had no idea that all of it came from Avery island. Now that I know, I don’t think I would have a problem with the company starting to grow their peppers elsewhere. Hence, I think diversification of land could be an excellent solution. The company could invest in lands that are close to their distribution centers to reduce transportation costs. In addition, I think that technology can only mitigate the impact of climate change to a certain extent. If see level rises to the level experts predict it will, it will probably not be economically viable to grow peppers on the Avery island in 40 years from now.
I had no idea and I wonder how many other people knew that Tabasco came from one facility in Louisiana. Not to undermine the family business but Tabasco is a staple across the country and I wonder if the public would care if the company were to leave Avery Island. I see that there is quite a bit of history on the Island but if the family believes there is going to be a step function in the viability of continuing operations, they should look to start a different plant in a very different location. This would greatly mitigate the risk of any natural disaster and general climate change.
I agree with Austin and Eric’s comments above that Tabasco should start diversifying their production sites, as well as adding additional growing locations, as a way to ensure the company can viably continue to deliver hot pepper sauce for another 150 years. This is surely a more practical adaptation to climate change than making significant capital investments to maintain their current operating practices. The brand value from the heritage of Avery Island cannot be that significant, given that most people are unaware that it is the only production facility and primary growing location.
In addition to working with genomes to improve drought resistance and plant adaptability, improving soil management practices can be an easy win as a buffer against changing weather patterns. As storm events increase in frequency and intensity, heavy rains can accelerate soil erosion and cause flooding that is harmful to pepper production. The Food and Agriculture Organization of the United Nations recommends a variety of practices to increase organic matter in soils that can absorb high amounts of water, reducing surface run off and increasing water absorption capacity for times of extended drought. [1] I would be curious to know if Tabasco is currently going after this seemingly low-hanging fruit to adapt to climate change.
[1] Food and Agriculture Organization of the United Nations. “Adaptation to climate change in agriculture, forestry and fisheries: Perspective, framework and priorities.” Rome 2007. http://www.fao.org/nr/climpag/pub/adaptation_to_climate_change_2007.pdf. Accessed November 2017.
June,
It sounds as if the hot sauce business could become the wine business – strongly dependent on the weather in a given year. How interesting! Does the warmer temperature change the flavor or just the spiciness? One would think that in increase in spiciness due to warmer climate could be counter-acted with dilution of the hot sauce.
I think that the hydroponic option you mention is interesting. What if this could be implemented in a massive warehouse that mimicked that climate of Avery island as a function of time. Essentially a system that could replicate the weather of a growing season day-by-day to ensure historical taste consistency? This would be a way to maintain brand consistency/flavor but would change operations tradition. An interesting trade off. I think it is hard to safeguard tradition with technology in general. Perhaps it is better to ensure the mission/vision isn’t lost as technology is used rather than focus solely on tradition.
Really interesting write-up of a complicated issue. The family and legacy dynamic poses an additional complication to the concept of sustainability. In response to your question regarding safeguarding this familial brand vs. addressing new challenges — I would argue that in order to protect the brand, Tabasco will need to adapt rather than clinging to old processes. If the brand is to stay relevant, it will need to find new and creative ways to continue producing excellent quality products in the midst of potentially declining crop yields and arable land. Demonstrating loyalty to its community, shareholders, and lifelong employees does not mean sourcing and producing in the same way it has been; it means adapting to changing conditions to ensure the business can stay viable. While I agree with the above comments that diversification is a good starting point, I don’t think it goes far enough. Instead, I believe the company needs to adopt one of your more drastic suggestions, such as improving crop drought resistance through experimentation, in order to ensure relevance.
This article also causes me to wonder how consumer preferences may change as a result of changing crops. If peppers were to get so scarce, could we reach a world where Tabasco 100x in price in the next 50 years? Interesting to think about how demand for today’s “basic” products may look very different in the future.