Newman's Own Story

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Actor Paul Newman at his New York apartment

Newman's Own is now a major brand in supermarkets, with sales exceeding $100 million annually and profits of more than $12 million. Since its start in 1982, Newman's Own has given all its profits—more than $137 million—to charity and established the Hole in the Wall Gang camps for kids with serious diseases. But its humble beginnings offer lessons for any entrepreneur. Like many rookie proprietors, actor Paul Newman and his sidekick, the writer A.E. Hotchner, had a good product (the actor's homemade salad dressing) but lacked the experience to launch it in the hotly contested world of packaged goods. In this excerpt from the forthcoming "Shameless Exploitation in Pursuit of the Common Good" (Nan A. Talese/Doubleday; $22.95), the two recount their experiences in trying to get a business off the ground.

It is December 1980, a week before Christmas, Westport, Connecticut. Paul Newman, known to his friends as ol' PL or Calezzo de Wesso (Bonehead), had asked his buddy A.E. Hotchner (Hotch), sometimes called Sawtooth, to help him with a Christmas project that he was assembling in this basement, which wasn't a basement in the usual sense. There were crusty stones, a dirt floor, crumbling cement, and overhead timbers covered with active cobwebs. Also three long since vacated horse stalls, but the unmistakable aroma of horses remained. A very picturesque place in which to mix salad dressing.

The project was to mix up a batch of PL's salad dressing in the washtub and fill old wine bottles using the assembled funnels and corks and labels, and on Christmas Eve our collective families would go around the neighborhood singing carols and distributing these gift bottles of PL's dressing. PL was very proud of his salad dressing, and this was the apotheosis of his salad days. Over the years, even in four-star restaurants, PL had been rejecting the house dressings and concocting his own. Captains, matre d's, and sometimes the restaurant owner would scurry around to assemble Paul's ingredients while neighboring diners gawked in disbelief.

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At that time, almost all dressings, especially the mass-market ones, contained sugar, artificial coloring, chemical preservatives, gums, and God knows what. So Paul really started to make his own dressing not just as a taste preference, but also as a defense against those insufferable artificial additives. The precise number of giveaway bottles were lined up on the dirt floor like a battalion of infantry soldiers, but there was still a quantity of dressing left in the tub. That's when it occurred to Paul that we could bottle the rest, hustle them into some upscale local food stores, make a buck, and go fishing. And that is how our baby got started—not in a manger, but in a tub—not a wise man in sight, a fading movie star and a cantankerous writer, but that was it.

If we ever have a plan, we're screwed!
it is 1982, and we are sitting in the conference room of the largest marketing company in America. On the table in front of us we have a bottle, once filled with Chianti, now containing an olive oil and vinegar salad dressing, which is the object of this meeting. "You gentlemen have come to the right place," the president tells us. "We launch new products for some of the biggest brands in America—Libby's, Heinz, Del Monte, Campbell's, Kraft—so we can give you an exponential trajectory on the welter of details that have to be accomplished to launch your salad dressing. It's essential to know in advance how the public will react to your product."

"What would that cost?" we ask. "Depending on the focus depth, somewhere between three hundred and four hundred thousand dollars. Now once you're ready to roll out the product, you'll have to learn how to attend to distribution, promotion and advertising, public relations—our experience is with the big guys, and they figure to spend a million dollars to launch a new product—that's the general rule the first year."

The odds on new products are about the same as roulette. "Celebrity products fall into a category of their own," said Karen, a trim blonde in a tailored suit. "When celebrities come out with their own products—Rocky Graziano's spaghetti sauce, Mickey Mantle's barbecue sauce, Nolan Ryan's All-Star Fruit Snacks, Gloria Vanderbilt's salad dressing, Reggie Jackson's candy bar, Carl Yastrzemski's Big Yaz Bread, Diane von Furstenberg's facial tissue, Bill Blass's chocolates, Richard Simmons's Salad Spray, Tommy Lasorda's spaghetti sauce, Yves St. Laurent's cigarettes, Frank Sinatra's neckties—all examples of products these famous people promoted with unsatisfactory results. There's never been a real celebrity success in the food business. We estimate the total start-up loss for celebrity products somewhere close to $900 million. No offense, Mr. Newman," Karen said, "but just because they liked you as Butch Cassidy doesn't mean they'll like your salad dressing." "Maybe we should call it Redford's Own."

"They wouldn't like it any better." "I'd like to have someone to blame." We said nothing on the walk across the parking lot to Newman's Volkswagen, the rear seat of which had been removed to accommodate a small block Ford V-8. After we got rolling, we discussed what we had just heard and decided that it would be better to devise a plan of our own: So it was decided that we would split the "brainstorming" responsibilities. Hotch would do the legwork and Paul would put up the $40,000 seed money. By the time we were on the open road, traveling at Newman's usual 90 mph pace, we both felt pretty good about the afternoon, having saved $1,300,000.

From the very beginning, we bucked tradition. When the experts said that something was "always done" in a certain way, we'd do it our way, which was sometimes the very opposite. Finding someone to bottle the dressing was the most difficult part of getting under way. We traveled to a plant in North Carolina to see a major bottler, who, as it turned out, was interested only in runs of 100,000 or more. We considered taking on a partner, and with that in mind we approached the Bigelow Tea Co. in neighboring Norwalk. But they were unenthusiastic about the potential for our salad dressing and turned us down.

Hotch made an appointment with a mayonnaise bottler in the Bushwick section of Brooklyn. He was frisked and escorted to a crowded office, where, through the thick haze of cigar smoke, he was faced with a group of five men who lounged on chairs arranged around a large central desk. They wore bright neckties and sported diamond rings on their pinkies. Hotch was offered a seat, a cigar, and a glass of Sambuca. Hotch loathed Sambuca, but he downed it bravely. The guy behind the desk, who had hands the size of catcher's mitts, did the talking. "So, kid, you're into salad dressing with this Newman actor and you're lookin' to get it bottled, right? Okay. You're usin' olive oil? Good. That's where we come in. In fact, that's where we are. Take a look at that glass case over there ... No, not the one with the guns, the one with the Umbria olive oil. That's us—we got olive oil by the balls. You use our olive oil, we bottle your dressing, you'll have dressing by the balls."

An assembly line was filling bottles of mayonnaise. Hotch was expecting a scrubbed Hellmann's-esque scene with white-robed, hair-capped workers tending rows of antiseptically serviced jars; instead, he saw a line of disheveled people, no covering on hands or hair, desultorily filling jars as they moved past on a slow-moving belt. "Well, kid," said the Godfather behind the desk, "we'll spring for the olive oil and we split fifty-fifty, but we got to go with the Umbria name, not this—what'd you call it?" There are probably still track marks from Hotch's 'Vette, bearing indelible testimony to his frightened foot on the throttle as he fled the scene.

Scarcely a day passed but what Paul was calling from some unlikely place. He phoned Hotch from racetracks, in between his races, on location while shooting Absence of Malice and The Verdict, from airports on his way to make speeches on behalf of the nuclear freeze movement. The overriding purpose of these phone calls was to get his dressing into a bottle, a bottle bearing the Newman's Own name on a proper label, a bottle that would allow us to thumb our noses at the naysayers. Paul had always been perverse about complacency. It was his theory that he had to keep things off balance or it's finito. That's why he took up racing cars when they said, Not when you're 47 years old, you out of your mind? That perversity also accounted for many of his risky movie roles, going where he hadn't been before.

None of the big commercial bottlers took us seriously. With the help of a local food broker, David Kalman, we finally did locate a bottler named Andy Crowley, who was exactly the kind of bottler we were seeking; Crowley ran Ken's, a small bottling plant outside Boston that made bottled dressing for Ken's Steakhouse, a modest Boston restaurant, and a private-label dressing for Stop & Shop. Kalman arranged to meet with Crowley at Boston's Logan Airport, but first he needed the formula for the dressing. Paul was packing to go someplace, but before taking off, he paused to scribble the ingredients for the dressing on a brown paper bag, which is what Kalman showed Crowley at the airport meeting.

Andy later explained to us that since the formula did not contain gums and chemical chelating agents, it would spoil in a short time; he urged us to add some of the chemicals that would fix its longevity. We refused. But to Andy's surprise, after testing, his chemists concluded that since Paul's dressing consisted of oil and vinegar and contained mustard, those elements combined to form a natural gum. We were elated with this lucky happenstance, but Andy presented us with another problem. We did not have EDTA (ethylenediaminetetraacetic acid) in our formula, which was thought to be essential in preserving life span on the shelf. "Let's try half of the usual edta. What about it?" he said. We didn't budge.

It was one thing for us to mix up a batch in Paul's kitchen, but quite another thing to produce the same result in a commercial bottling plant. Over a period of six months, Andy sent us 30 or more samples, but each time we asked for additional tweaking, trying to get ingredients balanced exactly the way we wanted them, so that the unique zesty taste of the dressing when we mixed it in Paul's kitchen would be duplicated in the bottle. It didn't help that Paul was in front of the camera somewhere or other or that Hotch was busy with some theater or literary pursuit. When Andy informed us that he was giving up on us, it meant we had to start all over again, disheartened but still determined to make it work.

Just when things look darkest, they go black
we decided that before we went through the arduous process of searching for a new bottler, we should find out how we stacked up against the competition. So we organized a competitive tasting in the kitchen of a local caterer we knew named Martha Stewart. The fate of our dressing now hung in the balance. If we scored poorly, we'd probably give up the ghost. Our guinea pig tasters took their time, dipping, chewing, cleansing, tabulating, and the wait for us was pretty excruciating, like waiting for reviews on opening night. All but two ballots had us number one, and on those two we were ranked second. It was then and there that Paul anointed us Salad King (referring to himself as the Salad King of New England), and the following day, his lawyer, Leo Nevas, incorporated us using his office as the corporation's address.

At this time Paul was driving race cars for an old friend of his, Bob Sharp, and it was on the way to a race at Lime Rock that Paul mentioned our salad dressing adventure. Bob suggested that we meet with his friend Stew Leonard, who owned a big supermarket in neighboring Norwalk. We subsequently had lunch with Stew, who warned us (as we had heard many times by now) that his attempts to sell celebrity products had fizzled. "If your dressing is really good," Stew said, "you've got a good shot at it since you'll sell the first bottle because your face is on the label."

"Whoa!" Paul said. "My face is on the label?" "Of course," said Stew. "How else do you get their attention?" Paul balked: "My face on a bottle of salad dressing? Not a chance in hell." Stew offered a proposal: "I'd like to set up a tasting. If your dressing is something special and you have a good label on it, I'll get Andy Crowley at Ken's to bottle it and I'll kick off your sales with a big promotion at my store." We told him that Crowley already turned us down. "Gentlemen," Stew said, "I am Andy's best customerI sell more Ken's than all his other customers combined. If your dressing measures up, I assure you he will bottle it."

We are on (their boat) the Caca de Toro, mock fishing. The president and vice president of Salad King are having an executive meeting, not knowing which will sink firstthe boat or the business. Paul is still brooding over the tacky suggestion that he put his face on a bottle of salad dressing. Hotch suggested that perhaps the time had come to bag the whole idea. The bobber dipped and Paul reeled in a hermit crab. "You know, there could be a kind of justice here, Hotch. I go on television all the time to hustle my films. TV gets me and my time for free, and the film gets exposure for freemutual and circular exploitation, so to speak. Now then, if we were to go the lowest of the low road and plaster my face on a bottle of oil and vinegar dressing just to line our pockets, it would stink. But to go the low road to get to the high roadfor charity, for the common goodnow there's an idea worth the hustle, a reciprocal trade agreement." Then he and the hermit crab went in for a swim.

Stew asked Andy to come down to his store to discuss the situation. Andy spent two hours explaining the fundamentals of the business, and at one point, Andy recalls, "when I mentioned a cash discount, Paul interrupted me and asked, What's that?'" Finally, after hours of discussion, Stew interjected himself and said, "Okay, Andy, enough! I want to go ahead on this. I'll buy 2,000 cases. Are you going to make it?" "What was I going to say," Andy says, "other than okay, because he was one of my biggest customers."

We are now in business, but we are determined that it not turn into serious business. We devise a mock Napoleonic "N" with a laurel wreath around it for the neck of the bottle. On the label we poke fun at the usual corny hype on our competitors' bottles with Nomen Vide Optima Expecta ("See the Name, Expect the Best"), Tutto Naturale, and in place of a copyright notice, we have "Appellation Newman Contrle." As a spoof of businesses that tout their ancestry, our slogan is "Fine Foods Since February."

Stew Leonard has posted a prominent announcement on the huge signboard outside his supermarket: welcome, paul newman. This was a big mistake, because hundreds of shoppers packed the store, refused to leave, and gridlocked the premises. In two weeks' time, 10,000 bottles were sold and Ken's had to put on extra shifts for their production line. We knew that Newman's Own would now have to bust its restraints and have a life of its own. Our little joke, our whimsical $40,000 adventure, was like a character in a play or characters being developed in a book who suddenly take off and run away from the writer, and all you can do is say, Look at that little bugger go. We didn't know where Newman's Own was taking us, but it definitely had a head of steam.

We didn't have an office, a bookkeeper, or any other employees, not even a telephone. We rented a two-room office across the hall from our lawyer's office, which was located above a bank in Westport. Because we were operating on the original $40,000 investment, we felt we were on shaky ground. So instead of buying office furniture, Paul decided that since it was September and he was closing his swimming pool, he would simply furnish the office with his pool furniture, even to the extent of keeping a beach umbrella over our shared desk (his picnic table). Paul's Ping-Pong table became our conference table.

We were beginning to learn the food ropes, when to say yes, when to say no (and mean it), and, since we were inevitably going to make mistakes, how to avoid fatal ones. In a relatively short time we had a platoon of Newman's Own pasta sauces attacking the shelf spaces. We were also augmenting our salad dressing troops. In 1983, our first full year in business, our sales catapulted to $3,204,335, with a profit of $397,000, which we dispensed to scores of different charities. In June of that year, when time came for Joanne to open their swimming pool and she couldn't find the outdoor furniture, Paul told her to replace everything. It looked as though we were going to last longer than expected.