By Donna Balancia
Emeril Lagasse has built his multimillion-dollar fortune on two words — loyalty and involvement.
OK, it’s really one word — “Bam!”
As tens of millions of televisions know, he uses that trademark line to stoke up the rowdy audiences at his “Emeril Live!” show that airs on The Food Network.
Although he might be famous for his jovial demeanor and his passion for cooking, it’s Emeril’s longtime partnerships and hands-on work ethic that are the cornerstones to a multimillion-dollar empire, his associates and industry officials say.
The one-named “wunderchef,” whose humble beginnings would eventually lead to stardom and fortune typically reserved for rock musicians and movie stars, is a serious businessman who has the final say on everything that bears his name.
Forbes tabbed him 85th on the magazine’s 2003 list of top 100 celebrities, estimating his earnings at roughly $7 million a year. His representatives say that amount is far less than his actual earnings, but because his company is privately held, they declined to reveal his annual income.
Judy Girard, president of The Food Network, said putting Emeril in prime time helped E.W. Scripps turn the network around. The Food Network was launched in 1993 and it was bought in 1997 by Cincinnati-based Scripps — the owner of the Press-Journal, the Tribune and The News.
“We’re celebrating the 10th anniversary of the network, and Emeril was practically the first employee here,” said Girard. “The network truly wouldn’t be as successful as it is without him, not only because he’s an extraordinary personality, but because he really pointed the way for us.
“Scripps bought The Food Network in 1997, and at that time we were in 28 million homes with almost no ratings,” recalled Girard. “Now we’re in 81 million homes.”
Skyrocketing to stardom
The Fall River, Mass.-born guy-next-door has managed to build an empire based on his love of the art of cooking and his desire to bring it to the people through his New Orleans restaurant.
His first restaurant venture in 1989 led to his lucrative deal with The Food Network, and his myriad product lines, including food, cookbooks and cookware. His associates say he is so familiar to people and he has such a regular Joe appeal, that he is simply known as “Emeril.”
“The one-name thing was never planned,” said Tony Cruz, Emeril’s business manager and director of finance for New Orleans-based Emeril’s Homebase, the company that oversees Emeril’s operations. “Audiences have gotten so familiar and have such a genuine love for him they know him as simply Emeril.”
In August, he renewed his contract with The Food Network for five years and for a multimillion-dollar sum, industry observers say.
One of several chefs on the network, he has two shows, “Essence of Emeril” and “Emeril Live!” Although the former is a subdued and serious cooking show based on his cooking theory, “Emeril Live!” can only be described as a TV “experience,” complete with a lively audience toe-tapping to the sounds of Doc Gibbs’ jazz band, eager to gawk at celebrity guests and — of course — dying to sample the food.
“Emeril has a good business sense but at the same time he is really creative,” said Cruz. “He can attract good quality people. He can bring out the best in everyone.”
The serious side
The business of Emeril is divided into the restaurant side, Emeril’s Homebase, and the licensing side, Food of Love Productions LLC, which oversees the partnerships with companies such as Brown-Forman Corp. subsidiary Fetzer Vineyards or B&G Foods Inc.
Cruz declined to reveal the terms of the deals he has struck for Emeril with his partners, but said they are all based on percentages of sales and that each one is a unique financial arrangement, “depending on what we’re trying to accomplish.”
There are about 1,350 people working for Emeril, Cruz said, with 50 at Homebase and the other 1,300 mainly scattered among the restaurant locations.
There are nine restaurants — soon to be 10 — in all: Three in New Orleans, two in Las Vegas, two in Orlando, one in Atlanta and one in Miami with another soon to be opened there.
Emeril started in a Portuguese bakery as a youth, and his mother gave him some tricks of the trade. As a young man, deciding whether to pursue a life of music or the culinary arts, he discovered New Orleans.
He worked at the highly regarded Commander’s Palace, and eventually opened his first two restaurants. In 1990, he opened Emeril’s, and then Nola was opened in 1993 — the same year he joined The Food Network.
The restaurants bring in an estimated 40 percent of Emeril’s annual revenue, Cruz said, noting the celebrity chef takes the time to personally train the staff of his restaurants.
Cruz, an accountant who met Emeril back in the days when the chef was general manager at Commander’s Palace, said it was a rough road in the beginning.
“Emeril was there for seven years and had a huge following,” Cruz recalled. He said Emeril had the desire to start his own restaurant.
“We started construction on Emeril’s in New Orleans in 1989,” he recalled. “Emeril basically started out with a small line of credit, about $150,000. He got turned down three or four times.”
But finally, he was approved by Whitney National Bank — a partnership that still exists.
“One of the things I admire is his commitment and loyalty,” said Cruz. “That was the bank that gave him his first opportunity and there is a loyalty there. They continue to do business together.”
The percentage of revenues that Emeril’s restaurants bring in is something that needs to be examined continually, industry analysts say.
“Celebrity chefs are good for the kickoff of a restaurant,” said Bob Derrington, managing director and restaurant industry analyst for Morgan Keegan Inc. in Memphis, Tenn.
“Emeril’s name recognition in a market like New Orleans is higher than, for example, a market like Memphis,” he said. “But once you get past the celebrity side of the business, it comes down to quality of the occasion and the consumer’s enjoyment of that.”
Derrington said among the enjoyment factors that determines whether a customer will return are service standard, price point and quality of execution.
That face — everywhere
Food of Love Productions is always busy cooking up new deals. In addition to his existing partnerships, the licensing end of the Emeril business is expanding popular lines.
A big part of the licensing side of business is the deal with B&G Foods. The Roseland, N.J.-based company, which produces Trappey’s Peppers and Regina wine vinegar, has worked with the chef for four years.
Cruz said Emeril creates recipes, and B&G takes that recipe and produces it in larger formats. There are 45 products with B&G foods, and the biggest selling of Emeril’s products are the seasonings and pasta sauces, Cruz said.
“The product line itself couldn’t be mass-marketed, so we started it off as a gourmet line that is now becoming a mainstream item,” Cruz said. “We got the product distributed to 85 percent of the marketplace without having to invest a tremendous amount in advertising.”
Cruz said B&G recently spent $5 million on a campaign with “Good Morning America” and the ABC Network to pitch the Emeril brand.
Marvin Schwinder, director of marketing for B&G Foods, said the company saw a natural marketing device in the celebrity chef and his large fan base.
“I initiated the discussion with Emeril,” said Schwinder. “He has so many fans, we thought there was a marketing opportunity there.”
“They (company officials) wanted somebody who would be true to Emeril’s ideas And he liked that we owned several brands he already used.”
Schwinder said the products bring in $50 million annually and they are sold in supermarkets, club stores, mass merchants and specialty retailers.
Another moneymaker is the deal with All-Clad Metalcrafters, a subsidiary of Dublin, Ireland-based Waterford Wedgewood plc. Emeril partnered with the company roughly three years ago, Cruz said, in an attempt to get a cookware product on the market that he actually enjoyed using.
The partnership has yielded a stainless steel line, a bakeware line, a non-stick cookware line and there is a new line of electrical appliances coming out. The cookware is worth roughly $40 million a year to Emeril.
Among his other sources of revenue are his cookbooks — he’s sold more than 4 million at $25 to $35 apiece — his partnership with Brown-Forman Corp. (NYSE: BFB) subsidiary Fetzer Vineyards wines; his cutlery deal with Solingen, Germany-based cutlery maker Wusthof; and his flatware and glassware deal with Waterford Wedgewood.
Especially fun for Emeril, said Cruz, is the relationship with Fetzer, which started as a promotional deal in supermarkets but has emerged into a complimentary arrangement.
“We partnered up with those guys to release a line of red and white wine a little over a year ago — in late 2002. We’ve sold 40,000 cases of our first wine,” said Cruz.