Newman's Food Line Benefits 600 Charities
SALAD dressing is not the only thing flowing out of actor Paul Newman's food company, Newman's Own Inc.
So are profits.
More than 600 charitable organizations received the firm's after-tax earnings - $6.7 million - in 1995. Newman's Own, based in Westport, Conn., has been giving away 100 percent of its annual profits since its inception in 1982, according to the firm. Since then it has donated close to $69 million.
Mr. Newman reviews requests for funding and selects recipients, often from outside the charity mainstream. Recent focuses include groups aiding children, the elderly, and the environment. He also gives to several national health-care organizations.
Newman and a writer friend, A.E. Hotchner, started the company after their homemade salad dressing was a hit Christmas gift. Today, Newman's Own has 12 factories in North America and sells salad dressings, salsa, pasta sauces, popcorn, and lemonade - all made with natural ingredients.
Industry watchers say that in the beginning Newman's name was probably what got shoppers to try his foods. But now they are coming back for a different reason.
''At this stage of the game, it's the quality of the products,'' says Jack Ryder, president of Cannondale Associates, a food-marketing consultancy in Wilton, Conn. That proceeds go to charity plays a big role with consumers, he adds.
Total sales for Newman's Own were about $60 million last year, up from about $55 million in 1994, the privately held company reports. Sales in the United States increased in 1995 over 1994 for several of its products, including salsa and salad dressings. The latter gained 7.3 percent, while the pourable dressing market in general was down by 3.5 percent last year, according to Information Resources Inc.'s Infoscan in Chicago.
Newman's has been one of the more successful celebrity brands, capturing an impressive amount of shelf space in several sections of supermarkets, says Lynn Dornblaser, publisher of the magazine New Product News in Chicago. She cites both product quality and the actor's do-gooder image as reasons. A spin-off line of organic products started by his daughter is also doing well.
The company shuns advertising, thus keeping costs down. But that doesn't hurt them much, Mr. Ryder says. ''[Newman's] face on the packaging is a ton of advertising right there.''