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McIlhenny Co. lore is that Tabasco pepper sauce was created in the 1860s by founder Edmund McIlhenny. “A food lover and avid gardener,” the company’s Web site says, “McIlhenny was given seeds of Capsicum frutescens peppers that had come from Mexico or Central America. On Avery Island in South Louisiana, he sowed the seeds, nurtured the plants and delighted in the spicy flavor of the peppers they bore.”

That story, according to journalist Jeffrey Rothfeder, is almost certainly a fable. Author of the book McIlhenny’s Gold: How a Louisiana Family Built the Tabasco Empire, Rothfeder reports that McIlhenny “adopted” the recipe for Tabasco sauce from a New Orleans plantation owner, Maunsel White, who began producing his Concentrated Essence of Tabasco Peppers in 1849, two decades before McIlhenny began selling his supposedly unique sauce.

Rothfeder argues, “This desire to sugarcoat the truth is a recurring motif in the story of McIlhenny Co. The company has historically relied on half-lies and legend to embellish the image of its pepper sauce, generate increased sales, eliminate rivals and adorn the McIlhenny myth in southern Louisiana.”

What a profitable myth it is for this mysterious family-owned company. Every day on Avery Island, just outside New Iberia, the company produces as many as 600,000 long-necked, two-ounce bottles filled with the aged red pepper sauce known around the world. Profit margins on the company’s annual revenues of $250 million have usually been around 25% or more. “And this performance,” Rothfeder writes, “has produced vast wealth for the secretive McIlhenny clan, who retain 100% ownership in the business.”

A former editor for BusinessWeek, Time and Bloomberg News, Rothfeder has produced a fascinating and fast-paced biography of Louisiana’s most famous homegrown corporation.

He did so with no cooperation from the company. But he spoke to several family members and many current and former employees—enough to produce a colorful, evenhanded history of an iconic Louisiana brand that has secured a place in business history alongside instantly recognizable products like Coca-Cola and Kleenex.

Rothfeder is profoundly impressed with the company’s simple but brilliant business model: “three ingredients, locally available; one factory; extremely low overhead, especially raw materials and labor costs; a demanding level of employee loyalty; and a jealously guarded brand.”

And he revels in the unique culture and landscape of the isolated Iberia Parish salt dome, formerly known as Petit Anse Island, that would today produce Petite Anse Sauce if the original owner of the property—Edmund McIlhenny’s father-in-law, Judge Daniel Dudley Avery—hadn’t objected when McIlhenny went to name his new product.

Rothfeder’s admiration for the company’s prowess is tempered by his criticism of the family’s antiquated and insular management style and what he regards as a heavy-handed relationship with competitors, and a questionable scheme to secure the legal rights to the Tabasco name.

In one of the book’s more interesting chapters, Rothfeder describes how then-president John Avery McIlhenny acquired the Tabasco trademark in 1906 by falsely claiming his was the only company producing a pepper sauce called Tabasco.

As it turned out there were at least a dozen other companies using Tabasco in their names for a decade or more—a fact that rival Louisiana company B.R. Trappey & Sons vigorously noted as it defied the U.S. Patent and Trademark Office by continuing to produce its own version of Tabasco sauce. In 1909, Trappey persuaded the federal government to rescind the Tabasco trademark, but eventually lost when a federal appeals court reversed the patent office’s ruling and permanently awarded trademark to McIlhenny.

As Rothfeder observes, “Geographical destinations like Tabasco [the name of the region in Mexico where the generic peppers originate] are not given trademark protection.” Furthermore, he notes that companies are never given exclusive rights to the generic name of a product, like Idaho potatoes or Wisconsin cheese. “McIlhenny Co. is arguably the only American business to successfully overcome both extremely high barriers to a trademark.”

That success, he suggests, is due to the company’s once-impressive political connections, including the close relationship of John McIlhenny and President Theodore Roosevelt. “I have to admit it was favoritism,” one McIlhenny heir confessed to Rothfeder.

While Rothfeder relentlessly probes the company’s history and lays out the good and the bad, he is almost uniformly respectful of the long line of McIlhenny descendants who have managed the 138-year-old company. That respect comes to an abrupt end in the book’s final chapter in which he examines the style of the company’s current president, Paul McIlhenny.

Under the current leadership, Rothfeder claims, employees are undervalued, worker turnover has shot up, and inferior products are diluting the company’s brand. “McIlhenny Co. has become a more austere place to work,” he concludes. “Distinct from prior McIlhenny presidents, Paul can be frequently overbearing, his steely gaze inimical, and bouts of kindness are rare.”

One wonders if Rothfeder’s severe review of Paul McIlhenny’s stewardship might have been more favorable if the secretive McIlhenny possessed the good sense to view the book as a marketing and public relations opportunity and not a threat. Indeed, it’s difficult to imagine how cooperating with Rothfeder could have possibly produced a more severe review of the company’s current leadership.

Rothfeder is left wondering if the younger members of the family might someday revolt. “By apparently neglecting the company’s challenges,” he writes, “Paul McIlhenny has further tempted the ire of the younger shareholders, who are increasingly impatient with the business’s torpid pace of growth and the lack of imagination in the corporate suite.”

Despite what he sees as McIlhenny’s growing troubles, Rothfeder believes the company and its delightful red sauce will survive. As he notes, and as his book demonstrates, “It’s wise to remember that no one has yet gotten wealthy betting against the McIlhennys.”