Zatarain's, Inc. History

Company Perspectives:

Zatarain's prides itself on great taste, high quality, and a near fanatical dedication to New Orleans cuisine. Interestingly, Zatarain's is as much a tradition at backyard barbeques as it is at formal dinners. It's amazing to think that, from such humble beginnings, the company has grown to make over 200 food products from Rice Dinner Mixes, Pasta Dinner Mixes, Breadings, Seasoning & Spices, to Seafood Boils, Stuffing Mixes, and other products based on authentic New Orleans-Style foods and seafood preparation. The wonderful flavors and aromas Zatarain's brings to dinner tables has made it a New Orleans tradition for over a century. Now people around the world recognize that to capture the true flavor of New Orleans-style cuisine, you have to "Jazz It up with Zatarain's."

Key Dates:

1889:

The company is founded in New Orleans.

1963:

Zatarain's moves to nearby Gretna and is acquired by James Viavant.

1984:

Central Soya Co. buys Zatarain's for $24 million.

1985:

Wyndham Foods acquires Zatarain's; boxed rice dinners are introduced.

1987:

Martha White Foods buys Zatarain's for $35 million.

1993:

Zatarain's is taken private in a leveraged buyout.

2003:

McCormick & Co. buys Zatarain's for $180 million.

Company History:

Zatarain's, Inc., is a leading producer of rice mixes. Based in New Orleans, the company's products tilt toward the spicier side of the flavor spectrum. A Louisiana institution for more than 100 years, Zatarain's first hit the national marketplace in the late 1990s with five rice mixes. These accounted for 65 percent of sales in 2003. Zatarain's produces more than 200 different items, including seafood boil spice mixes, breading mixes for fried food, and sauces, but most are distributed only in New Orleans. A handful of the company's 35 different types of rice mixes--Dirty Rice, Gumbo Mix, Jambalaya Mix, Red Beans and Rice, and Black Beans and Rice--receive national distribution. The company entered the frozen dinner market in 2002 with a dozen varieties, including Red Beans and Rice, Jambalaya, and Blackened Chicken Alfredo Pasta. Minnesota-based Fairmont Foods helped package the frozen dinners, which were based on recipes developed by Zatarain's in New Orleans. Zatarain's Gretna, Louisiana, facility includes a 30,000-square-foot plant and a 100,000-square-foot warehouse.

New Orleans Origins

The story begins in 1889, when Emile A. Zatarain, Sr. founded a business at 925 Valmont Street, New Orleans. (The name "Zatarain" reportedly means "fishing hole" in the Basque language of Batua.) Root beer extract, seasonings, and bleach were among the first of Zatarain's products. The line-up eventually expanded to include tangy Creole mustard and pickled products.

The business was incorporated on May 29, 1922 as E.A. Zatarain & Sons, Inc. and also did business as Zatarain's Pure Food Products. Ownership of the company passed to Emile A. Zatarain, Jr. and his wife Ida May Bennett Zatarain, who contributed recipes for Remoulade Sauce, Olive Salad, and other products.

By the 1960s, reports New Orleans CityBusiness, Zatarain's had fallen low on capital as it relied on outdated, inefficient packaging technology. James Grinstead Viavant, founder of the Avondale Shipyards in New Orleans, acquired Zatarain's Pure Food Products from the Zatarain family in 1963. Viavant merged Zatarain's with his Pa-Poose Products Co., Inc. and another recently acquired business, Pelican State Lab, owner of the Fish-Fri branded mix that would become a Zatarain's best-seller.

Production was modernized as it moved to a five-acre site in Gretna, Louisiana, a suburb of New Orleans. Unprofitable items such as bleach, dye, and pickled goods were dropped from the product line. In 1967, the company name was changed to Zatarain's, Inc. Viavant is credited with building the business into a regional supplier in the 1970s.

Changing Hands in the 1980s

Fort Wayne, Indiana-based Centra Soya Co. bought Zatarain's, Inc. for $24 million in May 1984 as Viviant neared retirement. Annual sales were $10 million at the time and would reach $14 million in 1986. San Francisco holding company Wyndham Foods, Inc. acquired Zatarain's 18 months later. Soon after, Zatarain's entered the institutional food service industry, supplying such markets as hospital cafeterias. Within five years, food service would account for 30 percent of sales.

Zatarain's produced 60 different products at the time. In 1985, the company rolled out the boxed rice dinners that would later be distributed in supermarkets across the country. Dirty Rice and Gumbo Mix were first, followed by Jambalaya Mix.

Zatarain's briefly labeled some of its products with the word "Cajun" in the mid-1980s. However, the word lost much of its meaning due to a number of imitators exploiting this particular food trend. Zatarain's would from then on refer to its products as "Louisiana-style" or "New Orleans-style." (Louisiana is actually home to two distinct styles of cuisine, the Creole of New Orleans being the more refined cousin of Cajun. Both are spicy.)

In December 1987, Zatarain's was acquired by Martha White Foods, Inc. of Brentwood, Tennessee, for about $35 million. Martha White was a unit of E-II Food Specialties Co., which owned several former Beatrice Co. consumer and food businesses.

Zatarain's changed hands a few more times. It was owned for a period by American Brands of Old Greenwich, Connecticut, in the late 1980s. Revenues reached about $16 million in 1989.

Expansion in the 1990s

Zatarain's was identified with the flavor of New Orleans cooking. The company's best-selling mix going into the 1990s was its Crab Boil seasoning blend, while Fish-Fri was number two, reported New Orleans CityBusiness. The company, which had 60 employees, was turning out at least four new products a year.

Zatarain's Partnership LP, made up of Citigroup Venture Capital and several Zatarain's employees, took Zatarain's private in a leveraged buyout in 1993. In spite of the numerous changes of ownership, management was relatively stable. Former vice-president of marketing and sales Lawrence Kurzius succeeded Chloe Anderson to become the company's fourth CEO in 1997.

In the early 1990s, Zatarain's products began appearing on grocery shelves throughout the South, where they were well accepted. Sales reached $26 million in the fiscal year ended July 1995. By 1996, the brand's geographic reach extended into Kansas and Virginia. Revenues were $30.5 million in fiscal 1997, when Zatarain's had 95 employees.

Zatarain's began its push for national distribution in the late 1990s. According to the Times-Picayune, of its 200 products, the company chose only five rice mixes to market nationally--jambalaya, gumbo, dirty rice, red beans and rice, and black beans and rice.

The company's first national TV campaign hit the airwaves in January 1999. CEO Lawrence Kurzius told the Times-Picayune that increasing acceptance of spicier ethnic foods in the United States seemed to be playing in the company's favor. Nevertheless, some parts of the country, such as New England, proved a harder sell than others.

Sales were $63 million in the fiscal year ended July 1999. With a 7.5 percent market share, Zatarain's was the country's fourth largest purveyor of rice mixes, after Uncle Ben's (10 percent). A $1 million, two-story addition was being constructed next to the company's headquarters in Gretna, Louisiana. In the ramp-up for national distribution, the number of employees had grown from 100 to 150. In 1998, Zatarain's began a five-year run of sales growth in excess of 15 percent a year.

New Horizons in a New Century

Having completed a successful nationwide expansion in the United States, Zatarain's looked to Canada for opportunities. Kurzius pointed out to the Times-Picayune the common Acadian heritage that Louisianans shared with French Canadians.

The company extended its product line into pasta dinner mixes, all with New Orleans-type seasonings, in 2000. Zatarain's spent $8 million on advertising in 2001, reported Adweek. Sales rose 16 percent to $98.9 million in the fiscal year ended July 2002, and employment was up to 260 people. The company was rolling out a line of frozen rice bowl entrees, beginning in the Southeast.

McCormick & Company Inc. acquired Zatarain's for $180 million in cash in June 2003. Interestingly, McCormick, based in Sparks, Maryland, had also been founded in 1889, operating as a purveyor of root beer. With $2.3 billion in annual sales and 9,000 employees, McCormick was the world's leading spice producer. The buy promised accelerated global expansion for the Zatarain's, which was already found in all 50 states.

While pushing for mainstream acceptance of New Orleans-style food, Zatarain's continued to aim new products towards Louisiana chefs. Offerings included the extra spicy Pro Boil originally developed for professional seafood boilers and a squeeze-bottle version of its Creole mustard.

Principal Competitors: Bruce Foods Corporation; The Golden Grain Company; Lipton; MASTERFOODS USA; Rex Fine Foods Inc.; Tony Chachere's Creole Foods of Opelousas Inc.

Further Reading:

• Charski, Mindy, and Alicia Griswold, "Packaged-Goods Account in Play," Adweek, Midwest Ed., November 25, 2002, p. 6.
• Drown, Stuart, "State Food Producers in Stew over Bad Grub Called 'Cajun,'" Baton Rouge State Times, June 24, 1988, p. 1B.
• "Funeral Notice: Ida May Bennett Zatarain," Times-Picayune, March 1, 2004, Metro Sec., p. 5.
• Gautreau, Chris, "Zatarain's a Spicy Morsel for Industry Leader McCormick," Advocate (Baton Rouge), May 9, 2003, p. 1A.
• "James Viviant, One of Avondale Founders," Times-Picayune (New Orleans), October 29, 1999, p. 4B.
• Karlen, Josh, "McCormick Conjures Cajun Deal," Daily Deal (New York), May 9, 2003.
• Larroque, Nicole, "Zatarain's Flourishes Despite a Series of Ownership Changes," New Orleans CityBusiness, January 15, 1990, p. 10.
• Lingle, Rick, "Poucher Funnels Savings into Rice Mixes," Packaging Digest, November 1, 1996, p. 108.
• Mulvihill, Kathleen, "Zatarain's Adds Spice to Cooking Craze," New Orleans CityBusiness, July 7, 1986, p. 18.
• Pandolfi, Keith, "N.O.'s Top 100 Private Companies: Zatarain's," New Orleans CityBusiness, March 24, 2003.
• Pandolfi, Keith, and Elisabeth Butler, "McCormick to Spice up Zatarain's Distribution," New Orleans CityBusiness, May 12, 2003, pp. 1f.
• Plume, Janet, "'Older Is Better' in the Big Easy," ADWEEK Southeast, September 25, 2000, p. 5.
• Reichard, Peter, "New Orleans Food Distributors Increasing Revenues and Adding Employees," New Orleans CityBusiness, March 18, 2002.
• Sentementes, Gus G., "McCormick & Co. to Buy Brand of Louisiana-Style Food Mixes, Spices, Flavorings," Baltimore Sun, May 9, 2003.
• Sine, Richard, "The Rice Stuff," Times-Picayune (New Orleans), November 28, 1999, p. F1.
• Sonnier, Cheramie, "Zatarain's: From Rice Mixes to Frozen Foods," Advocate (Baton Rouge), April 24, 2003, p. 1F.
• ------, "Zatarain's Produces Some 200 Products with Louisiana Flair," Advocate (Baton Rouge), April 24, 2003, p. 4F.
• Treadway, Joan, "N.O. Roots Puzzle Finds Lost Pieces; From Political Heroes and Saints to Old Street Names and Spicy Concoctions, the Basque People's Spanish-French Heritage Runs Deep in Local History," Times-Picayune, May 31, 2003, Metro Sec., p. 1.
• Yerton, Stewart, and Ronette King, "Zatarain's Sold to McCormick; Food Mix Operation Will Stay in Gretna," Times-Picayune (New Orleans), May 9, 2003, Money Sec., p. 1.
• Young, Tara, "4th Street Extension May Aid Industries," Times-Picayune (New Orleans), Metro Sec., November 27, 2001, p. 1.

Source: International Directory of Company Histories, Vol.64. St. James Press, 2004.