Newman’s Own, Inc.

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Newmans Own, Inc.

246 Post Road East
Westport, Connecticut 06880
Telephone: (203) 222-0136
Fax: (203) 227-5630
Web site:

Private Company
Employees: 18
Sales: $100 million (1999)
NAIC: 311421 Fruit and Vegetable Canning; 312111 Soft Drink Manufacturing

Since its founding in 1982 by veteran actor Paul Newman and writer A.E. Hotchner, Newmans Own, Inc., has grown from a small salad dressing producer into a highly successful specialty prepared foods company. After initial success with salad dressings, the company added pasta sauce, salsa, steak sauce, popcorn, and lemonade to its food line, each bearing Paul Newmans famous face on the label. Newmans Own Organics: The Second Generation, an organic food division headed by daughter Nell Newman, was established in 1993. All the companys products are made without artificial ingredients or preservatives, and are distributed in major U.S. grocery chains as well as in Canada, Europe, Israel, Japan, and Australia. Paul Newman, founder and president of Newmans Own, donates 100 percent of after-tax profits from Newmans Own to charitable and educational organizations. As of November 1999, he passed the $100 million mark in charitable giving from the proceeds of Newmans Own, benefiting over 2,000 charities. Of note among his many philanthropies is The Hole in the Wall Gang Camp in Ashford, Connecticut, which was founded by Newman in 1988 for children with serious illnesses, and five affiliate camps in the United States and Europe. Paul Newman remains closely involved as high-profile company spokesperson and philanthropist, and Newmans Own, Inc., continues to thrive. He personally approves all new products and recipes.

1982: Newmans Own Begins on a Whim

For several years, Paul Newman and his long-time friend, author A.E. Hotchner, were in the habit of giving bottles of their homemade salad dressing to friends as holiday gifts. They would mix up a batch in Newmans basement and hand out old wine bottles filled with the dressing while Christmas caroling in their Westport, Connecticut, neighborhood. The response was favorable, and their limited edition bottled dressing became a sought-after item in neighborhood gourmet shops.

Newman and Hotchner reasoned they might attempt to market their dressing. They were told to expect to spend $400,000 on test marketing, but instead they simply invited a group of friends to choose from among a few salad dressing samples, and then selected the favorite. The two men each contributed $40,000, and a private manufacturer agreed to bottle the dressing. Thus, in 1982, Newmans Own, Inc., created its first product: Olive Oil & Vinegar Salad Dressing. As a joke, Newman put a likeness of his own face on the label, deciding to give any after-tax profits away because he had no need or desire to make money from the business. He convinced his friend Stew Leonard of the famous Stew Leonards grocery store in Norwalk, Connecticut, to take 10,000 cases, though Leonard cautioned Newman not to expect much from a celebrity food product.

Marketing experts also had their doubts, warning Newman to expect $1 million in losses during the first year. Instead, Newmans Own Olive Oil & Vinegar Salad Dressing was wildly successful, generating after-tax profits of nearly a half million dollars in the first year, which was all donated to charity. Quoted in a company press release, Newman stated, If wed followed the experts advice, wed probably still be bottling dressing in our basement, wondering if Newmans Own was a worthwhile business venture. Hotchner went on to become Newmans partner, vice-president, and treasurer of Newmans Own, Inc., based in Westport.

198399: Growing A Business; Increasing Philanthropy

What had begun as a lark quickly took on a life of its own. The Olive Oil & Vinegar dressing was soon followed by Newmans Own salad dressings in varieties including Caesar, Creamy Caesar, Balsamic Vinaigrette, Italian, Ranch, and others. Success inspired Newman and Hotchner to branch out into other food items, and the Newmans Own product lines grew to include pasta sauce in seven varieties, steak sauce, Bandito salsa in three strengths, Old Fashioned lemonade, and Picture Show popcorn. By 1987 the company was growing at about 20 percent per year. Only five years after the companys inception, Grocery Marketing reported that the success of Newmans Own appeared to be due to the combination of the popular Paul Newman image on the product labels, a strong public relations effort, and quality products that inspired repeat sales. Each year the company showed increased earnings, grossing $36 million in 1988. The next year the company realized a reported 16 percent pre-tax profit, about five times the 3.4 percent food industry average.

The companys finances remained an internal affair, while manufacturing and distribution were subcontracted out to various concerns around the United States. The pasta sauces were manufactured in Rochester, New York; the popcorn was pack-aged in Iowa and Illinois; the salad dressing was bottled in Fullerton, California, and Framingham, Massachusetts; and the lemonade was created in various locations throughout the country. Supermarkets and giant chain stores such as Wal-Mart and Kmart were responsible for 90 percent of all sales. As the company grew, opportunities for increased profits and visibility were sought. One such opportunity came with an alliance between Newmans Own and Burger King Corporation, with good results. In 1990, the fast food chain reported that by adding Newmans Own salad dressings to its offerings, the company doubled its salad dressing sales for the month of July.

A notable aspect of Newmans Owns success was the companys lack of advertising. However, the food labels them-selvesprinted with an illustration of actor Paul Newmans face smiling out at the consumerserved to create an easily identified brand identity. The Newman image on the label was often cleverly customized to illustrate the product, for example, putting the actor in a sombrero on the salsa labels, adding steer horns to his head on the steak sauce bottle, or translating his image into a Roman bust for the Caesar dressing. The witty, tongue-in-cheek marketing copy on the labels, which seemed almost to poke fun at the Newmans Own enterprise, added to the products appeal. The company said that the label and promotional copy were written by Paul Newman and A.E. Hotchner themselves, who imbued it with their distinctively off-beat sense of humor. For example, the Sockarooni spaghetti sauce label claimed that it delivers a zesty twist that will knock your socks off, while the Virgin lemonade label said it was made from lemons that have never been squeezed. This irreverent marketing approach seemed to wink at the consumer while promoting a line of high-quality, all-natural food products.

For publicity, the company turned to charitable events. In 1990, Newmans Own and Good Housekeeping magazine began sponsoring an annual national recipe competition. To be eligible, every recipe entry needed to include a Newmans Own food product among the ingredients. The recipes were chosen from thousands of submissions from around the United States, and the final judging was held at prestigious venues such as New York Citys Rainbow Room or the Waldorf Astoria hotel. Each year, several recipe semi-finalists were chosen, and a professional chef prepared the recipes. To lend excitement to the event, Newman and Hotchner personally tasted the resulting creations, with Newmans wife, actress Joanne Woodward, sometimes joining in. The top prize of $50,000 was given to a worthy cause of the recipients choice, with smaller prizes given to the runners-up, as well as to favorite charities of selected supermarkets that sold Newmans Own products. The contest judging and Good Housekeeping received good publicity, helping to market Newmans Own products while promoting a high-profile charitable event.

With the steady growth and increasing success of Newmans Own the company remained fully committed to charity, with Paul Newman continuing to give away 100 percent of after-tax profits in the form of grants to non-profit organizations. At the end of each year, Newman and Hotchner sat down together to review grant applications personally and divide the years pro-fits among educational and charitable organizations that they deemed most in need of assistance. As Paul Newmans charitable giving became more widely known, more and more organizations began to apply for aid. As early as 1993 there was a notable increase in applications, from 1,500 up to 2,500. In that year alone, 460 applicants were given aid.

Perhaps the most well known of the Newmans Own philanthropies was The Hole in the Wall Gang, a charitable association founded by Newman to operate a group of six camps for gravely ill children. Named for the outlaw-heroes in Newmans celebrated film Butch Cassidy and the Sundance Kid, the first Hole in the Wall Campinspired by letters to Paul Newman from children with life-threatening diseaseswas founded in Ashford, Connecticut, in 1988. A nonprofit residential camp, The Hole in the Wall Gang Camp offered free lodging, medical care, counseling, and recreational activities for children with cancer and other serious diseases. Subsequently, five affiliated camps were added, all partly funded by Newmans Own: The Painted Turtle Gang Camp (California), The Boggy Creek Gang Camp (Florida), The Double H Hole in the Woods Ranch (New York), LEnvoi (France), and The Barretstown Camp (Ireland).

Company Perspectives:

Paul Newmans unique flair for successfully combining business and philanthropy has proved to be right on target, endorsed by satisfied customers and appreciated by charities throughout the world.

In 1993 a new division, Newmans Own Organics: The Second Generation, was established. The brainchild of Nell Newman, the third of Newmans five daughters, it was created to develop products using certified organic ingredients, marketed with the slogan: Great products that just happen to organic. According to a 1998 New York Times report, Ms. Newman convinced her father to start the division after impressing him with an all-organic Thanksgiving dinner she prepared. The division was based in Aptos, California, where Nell Newman lived, and was headed by herself and her business partner Peter Meehan. The first product, seven-grain organic pretzels, was followed by organic chocolate bars and fat-free Fig Newmans.

Plans for a major marketing push of Newmans Own products were set in motion in the United Kingdom in 1993. It was reported in Marketing that a budget of £500,000 was set aside for the first advertising campaign, planned for print ads in the womens press. It was hoped that the appeal of the famous actor combined with the companys policy of donating profits to childrens charities would be a draw for consumers. Fisher Quality Foods, Newmans Owns sole importer in the United Kingdom since the brand launched there in 1989, was set to become the brands sole manufacturer, in anticipation of the new marketing campaign. At the time of the reported expansion, Newmans Own pasta sauce had a two percent U.K. market share, while the salad dressing enjoyed a five percent U.K. market share.

Newmans Owns unorthodox success caught the attention of several business schools. In 1995, Newman and Hotchners offbeat company became the focus of a hands-on business course at Fairfield Universitys School of Business in Fairfield, Connecticut. With the cooperation of a group of management, finance, and marketing professors, Newmans Own invited teams of stu-dents to run focus groups, brainstorm about new products, and plot marketing strategies for the Westport company. At the end of the course, the student teams reported their findings, with the top two teams receiving $2,500 to be donated to their favorite charities. Three years later, Newman addressed a group of students at the Harvard Business School, joking that he was planning a hostile takeover of the H.J. Heinz Company, according to the student newspaper The Harbus. Newman mesmerized his audience with his unusual approach to business. James Austin, chairman of the schools Initiative on Social Enterprise, said, Newmans Own reveals the synergistic relationship between the social purpose and the commercial operations.

As the company continued to evolve, Newmans Own acknowledged the need for a more directed marketing approach. Thomas Indoe, a former executive with Del Monte Foods and RJR Nabisco, was brought on board in 1997. His first big change was to include a line of copy on the actual product packaging advertising the philanthropic mission of Newmans Own, since focus group research had determined that less than 25 percent of consumers knew that after-tax profits went to charity. Indoe also instituted the practice of using newspaper inserts to advertise Newmans Own products with a headline reading Over 90 Million Given to Charity by Paul Newman, aimed at improving public awareness of the companys charitable goals.

1998 was a busy year for the company. Retail World noted plans to increase Newmans Owns range in Australia, with four new pasta sauces to be introduced in that country in the second half of the year, and new salad dressings to follow. The same year, Frozen Food Age reported the launching of Newmans Own Ice Cream. Though it was manufactured and packed by Ben & Jerrys Homemade of Waterbury, Vermont, the line of all-natural premium ice cream was to be marketed apart from Ben & Jerrys ice cream, without that companys identification printed on the packaging. Ben & Jerrys retained the license to produce, distribute, and sell the five-item Newmans Own ice cream line, which bore such humorous flavor names as Pistol Packin Praline, Milk Chocolate Mud Bath, and Obscene Vanilla Bean.

Two Newmans Own-inspired cookbooks were published in 1998: The Hole in the Wall Gang Cookbook: Kid-Friendly Recipes for Families to Make Together (Fireside), with an introduction by A.E. Hotchner, and Newmans Own Cookbook (Simon & Schuster). Both well-received cookbooks contained recipes using Newmans Own products, as well as recipes contributed by such famous friends as Whoopi Goldberg, David Letterman, and Julia Roberts. In keeping with the companys charitable spirit, all proceeds from the sale of the two cook-books went to The Hole in the Wall Gang Fund.

Into the New Millennium

As the year 2000 approached, most Newmans Own products were still in production and going strong, with only the Newmans Own ice cream line discontinued. Organic cookies were added to the organic food line, and the seven-grain pretzels had become the natural food industrys best-selling organic pretzels. Most important for Newman and Hotchners unique enterprise, however, was the announcement in November 1999 that Paul Newman had passed the $100 million mark in charitable giving since his company began, to over 2,000 charitable and educational organizations. In April 2000, talk show celebrity Oprah Winfrey highlighted Paul Newman and Newmans Owns charitable efforts on her television Angel Network. Winfrey announced the establishment of a weekly Use Your Life award of $50,000, funded in part by Paul Newman, to be given to an honoree chosen for his or her work on behalf of the betterment of others.

For his part, Paul Newman remained actively involved in the company: working as spokesperson, writing ad copy, tasting new food products, judging recipes, and personally choosing and approving charitable and educational donations. As he once told a New York Times reporter, If we stop having fun, were closing up shop.

Key Dates:

Newmans Own, Inc., is founded by Paul Newman and A.E. Hotchner.
The Hole in the Wall Gang Camp is founded and built in Ashford, Connecticut.
First annual recipe award co-sponsored with Good Housekeeping magazine.
Newmans Own Organics division is launched.
Two Newmans Own cookbook titles are published.
$100 million in lifetime charitable giving is reached.
Paul Newman makes significant donation to Oprah Winfreys Angel Network Use Your Life award.

Principal Divisions

Newmans Own Organics: The Second Generation.

Principal Competitors

Kraft Foods, Inc. (salad dressing); Lipton (salad dressing, pasta sauce); Campbell Soup Company (pasta sauce); Nabisco, Inc. (steak sauce); The Coca-Cola Company (lemonade); The Pills-bury Company (salsa); Conagra Grocery Products Company; General Mills, Inc. (microwave popcorn).

Further Reading

Allen, Mike, Making His Own Charity an Acquired Taste, New York Times, November 18, 1998, p. G2.

Brand Building, Marketing, July 15, 1993, p. 7.

Brozan, Nadine, Chronicle, New York Times, January 19, 1993, p. B2.

, Chronicle, New York Times, October 29, 1997, p. B10.

Dagnoli, Judann, et al, Food Brands Team with Fast-Food, Advertising Age, July 22, 1991, p. 40.

Driscoll, Lisa M., How to Succeed in Business Without Knowing Nothing, New England Business, September 1989, pp. 2226.

Fabricant, Florence, New Salsa Is True to Newmans Own Taste, New York Times, April 3, 1991, p. C7.

Fenn, Donna, Star Quality, CFO, May 1987, pp. 102, 104.

Ferretti, Fred, Charitys Leading Man, Gourmet, April 1997, p. 82.

Fitzpatrick, Jackie, Newmans Own as a Business Course, New York Times, December 31, 1995, Section 13CN, Connecticut Weekly Desk, p. 11.

Newmans Own Ice Cream to Debut in Five Flavors, Frozen Food Age, March 1998, pp. 8, 40.

Henry, Jim, Newmans Own Organics Enters Chocolate Market, Candy Industry, September 1995, p. 16.

A Hollywood Good Guy Talks Tough, New York Times, November 22, 1998, Sec. 3, p. 2.

Hume, Scott, et al, Burger King Attacks Big Mac with Brands, Advertising Age, July 16, 1990, pp. 3, 39.

Klein, Alvin, The Way It Really Was, Hotchner Style, New York Times, September 5, 1993, Connecticut Weekly Desk, p. 12.

Markgraf, Sue, Indulgence Supreme, Dairy Foods, March 1998, pp.


McNeil, Liz, A New Twist on Pretzels, People Weekly, August 14, 1995, p. 75.

Nelton, Sharon, Creating a Hit of Her Own, Nations Business, December 1994, p. 63.

Newmans Own, Publishers Weekly, October 1998, p. 75.

Newmans Own Daughter, Vegetarian Times, April 1999.

Kathleen Paton

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Newman’s Own, Inc.

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