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December 16, 2020

Jefferson Capital Partners Announces Food Manufacturing Investment

NEW ORLEANS — Jefferson Capital Partners (JCP) and Greater New Orleans, Inc. are pleased to announce the investment of growth capital to Louisiana Pepper Exchange (LPE), a New Orleans-based trading company that provides pepper mash to the global hot sauce industry. Their support will allow the company to make a significant capital investment into its facility and bring on essential new company personnel. This is the third Opportunity Zone (OZ) operating company investment for JCP.

LPE specializes in providing pepper mash to kitchens, co-packers and sauce makers, locally and nationwide. The company maintains significant logistical and supply chain advantages with its location adjacent to the Port of New Orleans.

“We are thrilled to partner with Chris White and the LPE team.” said Joe Truhe, a Partner with Jefferson Capital Partners.  “We believe spicy foods are on trend and LPE’s dominant position in the pepper mash supply chain provides a variety of tremendous growth opportunities.   LPE also embodies much of what makes New Orleans such a compelling market with its proximity to the port of New Orleans and access to the Public Belt providing a durable competitive advantage.”

Louisiana Pepper Exchange is led by Chris White, a graduate of the United States Military Academy at West Point.  Upon graduation, White served 8 years in the Army Active and Reserve Components as an Armor Officer.  White invented and patented a Flexi Tank specifically designed for the shipment of pepper mash for the hot sauce industry.  LPE got its start providing bladders and a patented injection system to solve the problem of pepper mash separating and fermenting in transit when shipped by water and rail.

“We have had considerable growth over the last two years and Jefferson Capital Partners was the perfect partner to help fuel our growth immediately and into the future.” said White, Founder and CEO of Louisiana Pepper Exchange.  “JCP shares our home base of New Orleans, which is particularly important to me.  We are very proud and excited to have this partnership in place and adding a little spice to the life of many more customers in the future.”

Pepper mash is a more flavorful alternative to dehydrated pepper powder and is more stable than whole peppers, offering end-users a more flavorful product while reducing waste and spoilage. The mash is available in over 20 varieties, with the 6 most popular being: Cayenne, Ghost Pepper, Red Habanero, Orange Habanero, Jalapeno and Chipotle.

In addition to processing its own products, LPE also offers co-packing services to select craft hot sauce makers and leverages its bottling capabilities, certifications and supply chain advantages to help their customers grow into large grocery store chains and multi-unit restaurant groups. The company has already established a vertically integrated operation to provide pepper mash (as a base ingredient) to a large percentage of the existing hot sauce market. The JCP investment provided LPE with access to capital that was previously limiting the Company’s growth and expansion.

“This investment represents continued faith in Greater New Orleans as a food manufacturing hub and the success of the Opportunity Zone program,” said Michael Hecht, President and CEO of Greater New Orleans, Inc. “We are incredibly excited about Louisiana Pepper Exchange’s commitment to bring high visibility to an industry that already provides a nearly $800 million impact to our region’s annual GDP, a number that will only grow in the near future.”

LPE recently launched a pepper puree product for sale in retail and restaurant markets.  The puree is equivalent to a minced garlic product versus a whole garlic clove.  The puree offers significant sustainability, food waste and efficiency advantages to restaurants and home cooks. The puree is now available in 6 varieties across 800 stores in the Southeastern United States.

JCP was represented by Sullivan & Worcester with Novogradac providing tax and OZ accounting support.  LPE was represented by Jones Walker.