One of the country’s largest hot sauce brands may have been born in California and allude to Guadalajara, Mexico, but it’s now technically a Dallas company.
Tapatío — whose well-known logo features a young man clad in a yellow suit jacket and oversize sombrero — was recently acquired by Highlander Partners, a Dallas-based private equity firm.
Highlander announced the acquisition in late January, but declined to disclose a price. While Highlander became Tapatío’s new majority owner, another Dallas-based investment firm, The Arnold Cos., also invested “a significant minority equity position,” according to a release.
The seller was the Saavedra family: Jose-Luis Saavedra Sr. founded the company in 1971 in Maywood, Calif., a heavily Latino, blue-collar city in Los Angeles County. The family also kept a minority ownership position, according to the release.
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In a statement, Jeff Hull, Highlander’s president and CEO, called the hot sauce brand “a generational business that is distinguished by a strong, authentic brand in the fast growing hot sauce category.”
He also pointed to “several secular trends that are dramatically reshaping consumer food choices” and are likely to benefit the hot sauce brand.
Those trends include Gen Zers and Millennials aging into their peak spending years, Americans’ increasing appetite for Mexican food and move toward more health-conscious sauces and a shift toward more “experiential” — i.e., spicy — eating habits, according to a Highlander representative. Highlander declined an interview request about the purchase.
The purchase adds a major serving to Highlander’s portfolio: Tapatío ranks among the country’s most popular hot sauce brands, with one analysis by Instacart placing it fifth. The sauce is manufactured in LA County and is particularly popular in California and the West; Highlander now aims to “purposefully target opportunities” to expand its geographic reach and introduce new flavors, according to the release.
In a statement, Luis Saavedra Jr., a former CEO for Tapatío, called Highlander “a perfect fit,” citing the firm’s “long-term strategic approach” and “extensive background in the branded Hispanic food category.”
Highlander’s current portfolio includes stakes in more than a dozen companies, including Monarca Food Solutions, a Chicago-based snack company; Milwaukee-based Pretzilla; and SanoVita, a Romanian health food company.
In 2021, Highlander sold Plano-based Bettera Holdings, LLC, the parent company of the gummy company Bettera, for $1 billion.