By Daniel Gross
an you make a ton of money and build a brand that racks up a quarter of billion dollars annually in sales if you know absolutely nothing about business and management? In their occasionally hysterical new book, Shameless Exploitation in Pursuit of the Common Good, Paul Newman and A. E. Hotchner, say you can – but only if you give the profits away.
The tale of how two middle-aged men whipped up the $250-million-a-year Newman’s Own food empire from scratch starts in 1980, in Westport, Connecticut. Newman was somewhat obsessed with salad dressing. He took an oil-and-vinegar cocktail of his own design everywhere he went, “not just as a taste preference, but also as a defense against those insufferable artificial additives.”
Newman and A.E. Hotchner, a novelist and biographer of Ernest Hemingway, wanted to market a mix they had stirred up in Newman’s basement. But they knew that celebrity-related products frequently failed at the consumer box office. And so did industry professionals. “No offense, Mr. Newman,” one marketing consultant said, “but just because they liked you as Butch Cassidy doesn’t mean they’ll like your salad dressing.” His droll response: “Maybe we should call it Redford’s Own.”
But Newman’s star status helped out. They held – and won – a tasting test at the kitchen of “a local caterer we knew named Martha Stewart.” In September 1982, when the all-natural salad dressing was formally introduced at a bar in New York – with Newman and his wife, Joanne Woodward, providing the entertainment – film reviewer Gene Shalit showed up. The bushy-mustached critic raved.
Newman’s Own had another selling point that proved more powerful than Paul Newman’s blue eyes. From the outset, the founders agreed to give all profits to charity. Sales caught on, fueled by the rapid introduction of spaghetti sauce. Newman’s Own grew steadily and, um, organically – adding popcorn, lemonade, and cookies to the product mix, which now numbers 77.
In its first 20 years, Newman’s Own has earned – and given away – $150 million. The biggest beneficiaries of the empire of lemonade, popcorn, and vinaigrette have been a string of camps created by Newman’s Own that serve children with cancer.
“There are three rules for running a business; fortunately, we don’t know any of them,” the co-authors protest. But they knew at least one. A company competing in a market dominated by giant, deep-pocketed brands – Kraft, Ragu, and Orville Reddenbacher – needs an edge. And the goal of any successful brand manager is to have the target audience develop positive associations with the brand. What better way to do so than to give away your profits to a good cause?
Daniel Gross is editor of Sternbusiness.