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Heat's on in Paula Deen's kitchen as Smithfield Ham drops chef

FILE - This undated image released by Smithfield Foods shows celebrity chef Paula Deen wearing a Smithfield apron as she stands in front of various Sm...
This undated image released by Smithfield Foods shows celebrity chef Paula Deen wearing a Smithfield apron as she stands in front of various Smithfield meat products. Smithfield dropped Deen as a spokeswoman.AP

While the saying goes, "if you can't stand the heat, get out of the kitchen," that's easier said than done for a woman who has built a food empire out of a humble, Southern home kitchen.

Fallout for the celebrity chef Paula Deen continued Monday, as Smithfield Foods announced it has severed its partnership with Deen after it was revealed she used racist language.

"Smithfield condemns the use of offensive and discriminatory language and behavior of any kind. Therefore, we are terminating our partnership with Paula Deen," the company said Monday in a statement to CNBC. "Smithfield is determined to be an ethical food industry leader and it is important that our values and those of our spokespeople are properly aligned."

Court documents revealed the food celebrity—famous for high-calorie Southern cuisine—has used racial slurs and tolerated discriminatory jokes in her various business dealings. Deen has since posted three online video apologies. Fans, meanwhile, are flooding social-media outlets to defend their queen of Southern cooking.

Smithfield's decision to ax its partnership with Deen comes after the Food Network on Friday dropped Deen, and said it would not renew her contract, which expires at the end of this month. Her cooking shows have been a staple on that network for years—in which fans watch her fry butter and use doughnuts as hamburger buns.

(Read More:Paula Deen's Fans Take to Social Media to Defend Her)

Deen's Empire Worth an Estimated $6.5 Million Annually: Analyst

Marshal Cohen, chief industry analyst for The NPD Group, estimates Deen's empire to be worth around $6.5 million annually—which includes her retail and contract revenue.

Beyond her food network contract, Deen has product deals with many companies from pharmaceuticals to big-box retailers. Deen's name is associated with a diabetes drug by Novo Nordisk. Deen previously disclosed she suffers from diabetes.

Deen's vast product deals also span a who's who of retail—Macy's, Sears, Wal-Mart, JCPenney and QVC (owned by Liberty Interactive). Many of those companies are now evaluating their relationships with the well-known chef.

In a statement to CNBC, Paul Capelli, QVC vice president of corporate communications, said: "QVC shares the concerns being raised around the unfortunate Paula Deen situation. QVC does not tolerate discriminatory behavior. We are closely monitoring these events and the ongoing litigation.

"We are reviewing our business relationship with Ms. Deen, and in the meantime, we have no immediate plans to have her appear on QVC."

Sears Holdings tells CNBC they are "currently exploring next steps as they pertain to Ms. Deen's products."

Bad Celebrity Behavior in a Digital Age

As companies address the Deen situation, the public jury on her racial comments is still out.

Americans' willingness to forgive celebrity misconduct often depends on whether the transgressions occur in the particular field the celebrity "plays in," said Eric Martin, a partner at branding firm Boost Partners.

"Tiger [Woods] rebounds, as does Manti Te'o, in a way that Lance Armstrong or Pete Rose never will" because the misconduct by Rose and Armstrong was in their respective industries, Martin explained.

"Martha Stewart's insider trading conviction was far enough outside her field of celebrity that she could reemerge," Martin said.

In Deen's case, the public is not only reassessing her food business and dealings—but its star, who built an empire on a warm, giving public persona.

"Paula Deen's celebrity isn't simply about her food. It was also about her being the loving mom/grandma people admired. She had celebrity for being a nice, decent, giving person," Martin said. "Using racial slurs, no matter where one is from, but particularly in the South, strikes at the very heart of that image."

But perhaps unlike some previous celebrity flubs, Deen's missteps are happening in a rapid-fire, social-media age, where judgement via Tweets can be swift.

"Damage can happen at hyper speed in this era of social media, and the blogosphere," said Marty Brochstein, senior vice president of the International Licensing Industry Merchandisers' Association.

Brochstein also agrees with Martin in that Deen's controversy could be especially damaging. "Anything that even hints at racism is particularly injurious to a brand," Brochstein said.

Brochstein said it's important for companies that have business arrangements with Deen to react—but not over react.

Martin, however, thinks Deen's image may have taken too much of a hit already. "I think her star is quite tarnished and will never regain its luster. She certainly can redeem her reputation among her core followers," Martin said. "But I do not see her empire being rebuilt," he said.

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