00:00Today on Forbes, meet Mexico's first Chilean heir.
00:06Surrounded by the mountains of Jalisco, Mexico,
00:09the entrance to the 20-acre manufacturing headquarters
00:11of Chile's spice maker, Industrias Tajin,
00:15features a half-mile-long driveway
00:17lined with Montezuma bald cypress trees.
00:20Halfway there, it wraps around a massive molcajete,
00:24a mortar and pestle weighing 70,000 pounds
00:27made from a single piece of volcanic rock.
00:30Three giant flags, 26 feet long by 13 feet tall,
00:34fly over the glass headquarters.
00:36One has the Tajin logo with its signature chili pepper
00:40substituting for the eye.
00:42In the center is the Mexican flag,
00:44and to the left is the stars and stripes.
00:47To see such a huge symbol of America
00:491,000 miles south of Houston is somewhat disorienting,
00:53unless you know the backstory.
00:55Horacio Fernandez, the 66-year-old founder
00:59and CEO of Tajin, explains, quote,
01:02"'The American Dream' motivated me.
01:04You build the business with your work,
01:05with your mind, with your innovation.
01:08In Mexico, it's difficult."
01:11Fernandez created the seasoning blend
01:1340 years ago in his kitchen,
01:15taking cues from what his grandmother used,
01:17with the goal of selling genuine Mexican flavors
01:20in the U.S. market.
01:21It was an audacious plan in an era
01:23when some American supermarkets
01:25didn't even stock jalapenos,
01:27and Chi-Chi's, founded in Minneapolis,
01:30was among the country's most popular
01:32so-called Mexican restaurants.
01:35He succeeded by creating a Mexican product
01:37aimed squarely at Americans
01:39while simultaneously helping preserve,
01:41through commercialization, a heritage pepper,
01:44key to Mexico's national identity,
01:47Chile de Arbol de Jalisco,
01:49featured in Tajin's logo.
01:51Some 40 million pounds of Tajin
01:53is now sold in America annually,
01:55much of it at Walmart,
01:57according to the cowboy hat-wearing Fernandez,
01:59who rarely gives interviews.
02:02The U.S. is the engine
02:03behind the brand's cult-like following,
02:05making up 60% of its business.
02:08Forbes pegs annual revenue for Industrias Tajin
02:11at $300 million,
02:13with gross margins of as high as 70%
02:16and net margins of 30%.
02:19We estimate the business to be worth $1.5 billion.
02:23Fernandez, who started the company in 1985,
02:26and his brother, Aldo, who joined 11 years later,
02:29own nearly all of it.
02:32Sergio Arias, a banker who became CFO in 1996,
02:36has 3%.
02:38Since 2020, Tajin has grown sales
02:40at a compound rate of 15%,
02:42some three times faster
02:44than the overall $7 billion U.S. spices category.
02:48Fernandez says Tajin,
02:50which has been licensed by brands ranging from Taco Bell
02:53to Hellman's Mayonnaise,
02:54has been wooed by Nestle, Conagra, Unilever, and Kraft.
02:59Yet he hasn't been tempted to sell.
03:02Fernandez, who spent some of his wealth
03:04on a school celebrating traditional Mexican ceramics,
03:07as well as a colonial-era hacienda
03:09built in Jalisco in 1564,
03:11purchased in 2021 for events,
03:13says, quote,
03:15It's not about the money.
03:17Matt Leeds, who founded Forward Consumer Partners
03:20after having led the deal for McCormick
03:22to buy Cholula hot sauce in 2020
03:25at private equity shop El Caterton,
03:27says that Tajin is, quote,
03:32He adds, quote,
03:33The brand is underexposed.
03:35There are not many companies this scaled, this profitable,
03:38with strong brands, their own manufacturing,
03:41and independently held.
03:44When McCormick,
03:45the $6 billion in sales seasoning behemoth
03:47behind Frank's Red Hot and Old Bay,
03:50acquired Cholula,
03:51it spent 10 times revenue for a total of $800 million.
03:55Since then, deals in spice brands have ranged a bit lower,
03:59from four to eight times sales.
04:01Last year, Siete Family Foods,
04:03the corn-free chip maker
04:05that expanded into seasonings and hot sauce,
04:07was acquired by PepsiCo for $1.2 billion,
04:11or more than four times sales.
04:14Tajin grew through grit.
04:16Fernandez was raised in Guadalajara,
04:19one of seven kids of a wealthy gasoline entrepreneur,
04:22but he wanted to strike out on his own.
04:24Without help from his father,
04:26he started more than 20 small businesses,
04:28hawking everything from leather goods to candy.
04:31Each one failed,
04:32but Fernandez kept looking for the idea that would take off.
04:36While selling beans and rice,
04:38he attended a food trade show in Chicago.
04:40There, in 1980, he had an epiphany.
04:44He would bring chilies to the masses.
04:48For full coverage,
04:48check out Chloe Sorvino's piece on Forbes.com.
04:53This is Kieran Meadows from Forbes.
04:56Thanks for tuning in.
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