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Shameless exploitation in pursuit of the common good.”
This case was prepared by Professor James E. Austin with assistance from Dr. Catherine Overholt to serve as the basis for
classroom discussion rather than to illustrate effective or ineffective administration.
Copyright © 1998 by the President and Fellows of Harvard College. To order copies or request permission to
reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to
londonessays.com No part of this publication may be reproduced, stored in a retrieval system,
used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying,
recording, or otherwise—without the permission of Harvard Business School.
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Newman’s Own, Inc.
“Shameless exploitation in pursuit of the common good.”
-Company motto
Paul Newman, distinguished actor and social entrepreneur, recalled in August 1998 the seeds
that gave birth to his food company about twenty years earlier:
We used to take the kids out and sing Christmas carols for the neighbors. One
Christmas I decided to take old empty wine bottles and fill them with my salad
dressing, put ribbons around them, and give them to the neighbors. Then about the
middle of January there were all these people beating on my door, saying, “Where’s
my refill!” So I thought it would just be fun to throw it into a couple of local
delicatessens and sell it. We had no aspirations for it. Nothing big time.
From this inconspicuous beginning, Newman’s Own grew into a multi-product company with
1998 sales projected at nearly $100 million. More distinctively, however, Newman donated all of the
company’s after-tax profits to charity. Over its life this social enterprise had distributed about $90
million to nearly 1,000 nonprofit organizations. The entrepreneurial undertaking had achieved
impressive and unexpected results commercially and socially, but faced significant challenges for the
future. Andy Crowley, President of Ken’s Foods and the bottler of Newman’s original salad
dressing, put forth a basic challenge: “Paul has to figure out what to do to perpetuate this.”
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Company Origins
Newman recounted the first step, “When I got the idea to put this stuff out, I turned to “Hotch”
(A.E. Hotchner), who had written my first really critically successful television show, was a neighbor
in Westport, Connecticut, and whom I’d known since 1955. Hotch did a lot of the early leg work.”
Hotchner recalled, “If ever there was an accident that turned into a beneficial undertaking, this
was it. For years Newman had been making his own salad dressing. Even in restaurants he would
sometimes embarrass us by asking the waiter to bring olive oil, vinegar, mustard, and what not to the
table, and he would mix it up. When he said, ‘Why don’t we get a proper bottler and put a few
bottles out,’ I thought, well, I’ll just humor him and the thing is going to evaporate. But he sort of
persisted.” In seeking advice from the president of a major marketing corporation, Hotchner learned
that big companies that launch a new product do consumer panels in multiple markets. They stand to
lose a million dollars in the first year of a new product launch. Newman proposed that they just use
friends for a taste test, invest $40,000, buy some bottles, and put them out. “We will have lost that,
but at least we will have been in the business.” After encountering considerable difficulty in
obtaining a bottler, Newman recalled, “It went from just a lark to some kind of real challenge.”
In the process Hotchner got connected with David Kalman, a food broker. Kalman stated,
“Because it was a small company consisting of an actor and a writer, they didn’t have the business
acumen for selling food. They knew they wanted to get involved but didn’t know how to get there.”
Kalman approached a small bottler of salad dressing, Ken’s Steak House in Boston (Ken’s Foods),
that sold its regionally marketed product to Leonard’s Supermarket in Norwalk, Connecticut, a
Kalman client. Kalman recalled the bottler’s first response to the proposal was, “Are you crazy?”
Andy Crowley, Ken’s President, commented on his reaction then: “I wrote a memo to my father and
business partner asking, ‘Do we want to get involved with an actor, race car driver, and part-time
cook?’” They decided to play it out and see what would happen.
Crowley indicated that over the next year they prepared many different samples and often
waited months to get a reaction from Newman who was away making a movie. According to
Crowley, there was “mounting frustration on all sides.” Stu Leonard, owner of the Norwalk
supermarket, finally arranged a meeting with Newman and Crowley on November 17, 1978 at his
supermarket. They had a blind taste test of salad dressings using employees, and Newman’s sample
bottled by Ken’s Foods ranked high. Leonard said, “Let’s pack 2,000 bottles. You take 500 and I’ll
take the rest. You’ll do it, right?” Crowley agreed.
With the bottler signed on, they turned to the label creation. When one of his associates asserted
to Paul that “You will not be able to sell one bottle until you put your face on the label.” Newman
replied, “The chances of that are infinitesimal.” The project hit a major roadblock. Newman
explained how this deal-killer was averted: “When the face came on the bottle, I knew that the profits
would have to go to charity. To make money off that would be so tacky. From this came the concept
of circular exploitation. I allow my celebrity status to be exploited in order to sell stuff from which I
then in turn channel the proceeds into good causes, hence the slogan of our company: ‘shameless
exploitation in pursuit of the common good.’ It’s a reciprocating engine.” The label with Newman’s
likeness was drawn by the daughter of one of his buddies who was part of Newman’s Formula One
power car racing team.
Newman’s Own was officially incorporated in 1982 as an S corporation with Newman as the sole
stockholder.1 They functioned for the first six months out of Newman’s lawyers office and then set
up a small office in Westport. Newman recalled, “We were closing down our pool and so I took the
pool furniture, umbrella and all, and put it in the office, where it still is today. A Ping-Pong table
1 S corporation profits are incorporated into the owner’s total personal earnings and taxed accordingly.
Newman’s Own, Inc. 399-052
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served as our conference table. It was all kind of a family operation.” Hotchner managed the office
and the staff of three. He pointed out, “The real challenge was that obviously Newman wasn’t a
businessman nor was I, so very quickly, not only did we have to become businessmen, but we had to
learn something about the food business, about the whole supermarket business, which is very
complicated and ruthless. If you make a mistake, you can really get burned.”
Newman’s Own contracted Advantage Food Marketing, in which David Kalman was a partner,
to serve as its master broker. Advantage managed all the sales and distribution functions, including
recruiting independent brokers throughout the nation’s main markets, negotiating and invoicing the
supermarkets, managing the shipments from the company’s manufacturers, and providing quality
control of all products and processing facilities. Advantage received a 7% commission on sales net of
trade discounts of which half was passed on to the independent brokers. Kalman stated the basic
goal: “When you’re a food broker, volume is the name of the game. We’re looking to do more sales
so that Newman can give out more money.” To finance operations, the company borrowed from the
bank with Newman’s personal guarantee. Later the bank no longer required this. Newman’s also
negotiated a 20-day payment term from its contract manufacturers and a 10-day term from the
supermarkets, although in practice these clients took about 18 days to pay. The manufacturers held
the inventories and billed Newman’s Own when they shipped to the supermarkets.
Product Development & Growth
From the original salad dressing, the company expanded its product line over the years to
include other dressing varieties, spaghetti sauces and salsas, popcorn, lemonade, ice cream, and
organic foods (see Exhibit 1 for timeline of product development and Exhibit 3 for sales data).
Hotchner described the product genesis process: “We don’t really have a plan for a line of foods and
when they will be introduced. We just get these ideas and then if something clicks, perhaps we’ll go
ahead.” Newman continued to be heavily involved with tasting and approving every product: “We
kind of do it on a case by case basis, but the products that seem to work best are the ones that people
think that I could have somehow created in my kitchen.” Kalman added another dimension,
“Quality in food is the most important thing. We’ve always aimed to have the best in the category.”
Salad Dressings
When Newman’s first salad dressing was introduced it was the only olive oil vinaigrette on the
market with more than 51% olive oil. However, one New York Times food critique stated that it had
a metallic taste. They quickly determined that was due to the use of dehydrated garlic and onions, a
standard industry practice. Newman switched to fresh ingredients and, counter to industry people’s
assertions that it would spoil, this resulted in an even more novel and well-received dressing. Sales
took off and the $40,000 original investment was recouped in a matter of months. Gross sales the first
year were about $3.2 million, generating pre-tax profits of $373,000.
Andy Crowley commented on the process of developing the salad dressing line, “You can’t
market anything that Paul doesn’t like, although you’re not dealing with an ego and that makes him
very easy to approach. He’s been very intuitive and very prone to taking gambles. To tell him ‘You
really can’t do that,’ his immediate response is ‘Why not.’ For example, the industry wisdom is that
labels should have a family appeal. His labels don’t. The legends on the back labels are Paul. Each
product and label are characters all to themselves.” Hotchner described the label creation process, “I
usually write something and then Paul will poke around with the original. It is fun doing them and
people get a chuckle out of them.” (See Exhibit 2 for label legend examples.)
After the initial adjustment to the ingredients, nothing further was done in salad dressings until
the company agreed in 1990 to an exclusive placement of Newman’s Own dressing in Burger King’s
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salad section. Burger King also wanted to have ranch, French, light Italian, and blue cheese varieties
in addition to the original, so Newman worked with a food consultant and his bottler, Ken’s Foods, to
develop these new formulations. These arrangements were made at very high levels and, according
to Crowley, did not make the Burger King purchasing agents very happy because the Newman’s
dressings cost significantly more than generic alternatives. Newman’s Own labels were displayed
prominently in the salad bars. This relationship represented an important revenue source and
continued for about 4 years. After it ended, Newman’s Own added the ranch dressing to its bottled
line, because it had been so well received by Burger King customers. However, the bottled versions
did not measure up to the quality of the Burger King offering. That unbottled form was more like a
refrigerated fresh delivery system with a three-month turnover in comparison to the bottled
supermarket sales that spent up to 12 months on the shelf in nonrefrigerated conditions.
Newman’s added Caesar in 1994 and balsamic vinaigrette in 1996, although the original Oil &
Vinegar dressing remained the company’s top seller. Salad dressings accounted for 38% of Newman’s
Own total revenues in 1998. Crowley discussed the salad dressing market: “The market has grown
from $300 million to $1 billion since we began and expands about 2% annually. The novel varieties
are where the growth is, although that is a coastal phenomena. In the heartland you still pave the
street with ranch. Ranch, Italian, thousand island are 85% of the market. Ken’s produces 40
dressings under its own label, of which the biggest sellers are light Caesar and light raspberry
walnut. In a consumer focus group that we did for our products we discovered that people
consistently placed Newman’s Own in the high quality segment.” In the 52-week period ending
April 19, 1998, Newman’s six salad dressings sales were $30.5 million, up 16.5% from the previous
year, and amounting to a 2.6% market share (with an average unit price of $2.36). This compared to
Kraft’s market share of 29.5% (average price of $2.05), Wishbone’s 17.2% ($1.94), Hidden Valley’s
13.6% ($2.86), five other brands each at 5% or less, including private labels and Ken’s at 4.6% ($1.26).
Crowley indicated that “We’re also a competitor of Newman’s but we go to market differently.
This does create tension at times with some people, but where are they going to go? They could go to
some fringe players, but with us Newman’s has never ever been in trouble with one of its products.
And when we negotiate with our glass supplier for 8 million 8-ounce jars, his million jars are right
there with ours. When we are shipping out a truckload to Stop & Shop and he has only three skids,
his go out at the truckload rate. He derives the benefit. Over the 16 years our unit price to Newman
has increased only 9%. It’s two way. It’s not a short-term situation. There’s a mutual sense of
loyalty, and Newman is a very loyal guy.” Newman commented, “It’s a long-standing relationship
which is 99% friendly and 1% competitive. To some extent they use their profits that they make from
us to create another competitive line which is troublesome, although we do try to stay out of each
other’s price range.”
Since 1982 Ken’s Foods grew from a $10-million company to $220 million. Newman’s Own sales
reached 18% of Ken’s total business at one point and in 1998 constituted about 5%. Crowley
commented on the relationship, “Monetarily they are significant but emotionally they’re also very
important to us. He forces you to get involved. You don’t just pack for Newman and not give back.
We’re closer to him today at 5% than we were at 18%.” Newman’s also used a California bottler to
handle its salad dressing production for the West Coast.
Sauces
About six months after the first salad dressing was launched the second product category of
spaghetti sauce was developed. Hotchner recalled the beginning, “Newman called me up one day
and said that he’d just come home and found a bottle of spaghetti sauce that he tried out and he said
‘it’s absolutely terrible; all full of sugar and preservatives, and it’s got more chemicals in it than
anything else. Why don’t we come up with a spaghetti sauce that’s full of fresh stuff?’ Nobody had
ever put out a sauce like that before. And we even had the audacity to call it ‘Industrial Strength
Spaghetti Sauce.’ The naysayers said you have to put something like garden fresh on it, but they
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were proven wrong.” But again, Newman’s Own needed to find someone who would manufacture
and bottle the product.
David Kalman approached Ed Salzano, Executive Vice President of Cantisano Foods, Inc., a
private label contract packer in Rochester, New York and one of Advantage’s clients. Salzano
recalled, “David, being a very tenacious and brash guy, stuck a bottle of Newman’s Own in front of
me and says, ‘Look what we’ve done for this. If you guys could make a great product, we could sell
it.’ So I came back at him and said give me Newman’s recipe for his spaghetti sauce. We played with
it to see how we could commercially adapt it and were sending samples back and forth for Newman
to taste. David would come back and say ‘Paul likes it, but try to change this.’ We didn’t know
where we were going with it. One day David said to go buy Time magazine. Newman’s picture was
on the cover and there’s an eight-page article about him and his company starting to give profits to
charity. And there was one line in there that his next product will be his Industrial Strength Venetian
Style Spaghetti Sauce. That’s how in 1983 we found out that we were packing spaghetti sauce for

them.”
Salzano indicated that many personalities had approached the company to make a sauce,
licensing their name to Cantisano for a royalty. “The difference with Paul Newman is that he took
title to the goods and then he resold it. So the fact that he was willing to put his money at risk made
us feel that this man was really committed to this program. The relationship with Newman is one
that is very unique, because we started to partner with him from the standpoint of looking at the
good things that he was doing and said, here’s someone that has a tremendous name and a
tremendous heart. And if we can help his business grow, we always felt that it was in our business’s
best interest. We took a whole different approach to Newman’s Own.
The initial Newman’s Own sauces were the first of the chunkier, all natural types of sauces
introduced to the market place. Cantisano played a supportive role in this development process,
testing out recipe ideas from Newman and sharing theirs. Salzano commented, “We looked at
Newman’s as a place where we brought a new idea to first. We also tried to be proactive in analyzing
for them the categories that we compete in because we have a greater level of sophistication in the
food business.” After producing several varieties of spaghetti sauce, Cantisano proposed developing
in 1991 a very different type of salsa as a new product category. “By that point we had a good feel for
what Paul’s tastes were like: spicy, chunky, with a bite.” In 1997 Newman’s added three more salsa
varieties. Newman’s also sold in foreign markets a small pasta line produced in Italy.
Cantisano chose not to develop its own products in the premium end because “we felt why
compete with a key customer.” They also refused the request to pack a sauce for Frank Sinatra
because they deemed it would be a conflict of interest. Salzano stated, “Any connections that we had
with the trade, we were willing to share with Newman’s Own because of the good that he’s doing. It
really came down to the cause and the mission. We would even play on the strength of our
relationship with the major grocery executives and say, ‘Hey, the more money Newman gives you,
the less he can help other people. It’s easier to beat up corporation XYZ because they’re in it for the
money. Newman’s in it for the love.”
Salzano indicated that the impact of Newman’s on Cantisano Foods was significant: “It allowed
us in our early stages of development to go forward and reinvest into our business because we
looked at his brand as stability because of our commitment to Newman and his to us. Newman is an
extremely loyal individual. It has been very good all the way around. Our company has grown
much more than tenfold.”
The total U.S. sauce market grew in size similar to that of dressings. Premium sauces constituted
25% of the total pasta sauce market. Newman’s Own six sauces held a 7.3% share of the premium
segment behind Classico (38.6%), Five Brothers (29%), and Barilla (16.2%). Newman’s sauces were
the lowest priced brand in the premium segment, being 13% below Classico, 8% under Barilla, but
19% above the mainline segment. Sauce sales accounted for 31.7% of the company’s 1998 revenues.
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The salsa products produced 11.5% of the company’s sales. Salzano indicated that sales of private
label brands were increasing, particularly in the premium segment.
Popcorn
Newman stated, “I’ve always been a popcorn freak, so that was a natural.” But developing a
product turned out to be difficult. Hotchner recounted, “That was the longest pursuit. Either the
popcorn didn’t pop right or taste right. It took us two years until we found a grower that produced a
hybrid especially for us.” The result was a higher pop ratio and a fuller bag that earned a Number 1
ranking in a consumer magazine. They developed kernels in jars in 1984 and then a microwave
version in 1986 as that form became more dominant. Newman’s offered four popcorn varieties,
which accounted for 8.8% of company sales in 1998.
Lemonade
The idea for the lemonade came from Joanne Woodward, renowned actress married to Paul
Newman. In 1986, she provided a family recipe from her native state of Georgia. The concentrate
for the lemonade was produced by a contract manufacturer in California and then shipped to dairies
around the country. This first entrant into the beverage category accounted for 4.2% of sales.
Ice Cream
Unlike the other products, the manufacturer, Ben & Jerry’s Ice Cream Company proposed this
product. Ben Cohen collaborated with Paul on various social sector undertakings. Newman noted,
“We’ve had lots of products from manufacturers whom we’ve turned down because they didn’t
come up to quality or our taste.” Ben & Jerry’s paid Newman’s Own a royalty and handled all the ice
cream production and distribution. Tom Indoe, Newman’s Own current Chief Operating Officer,
indicated that this type of licensing arrangement derived a smaller contribution than the other
products marketed directly by Newman’s Own.
Newman’s Own Organics
One of Newman’s five daughters was very interested in organic foods and had the idea.
Newman recalled, “Nell came to me with a friend of hers who had been in the swimming pool
business, and proposed that they create the organic food subsidiary. So, they educated themselves
and were on partial salary for some period of time to figure out what products they wanted to come
out with.” They produced pretzels as their main product. They became the dominant player in this
small niche market. They also made an organic chocolate candy bar. Sales for the first seven months
of 1998 amounted to $1.3 million.
An organic cookie to be called FigNewmans followed. Because of possible trademark
infringements, Paul Newman wrote the president of Nabisco and asked for permission to use the
name, indicated that it would not be competing against Nabisco’s Fig Newtons, and that the proceeds
would go to charity. The president wrote back indicating that they could not give permission
because of the precedent it would set, but if Newman’s would pay a royalty, say $1, then it could be
arranged. Newman agreed and thanked him for his generosity. The cookie was launched in 1998
and sales for the first seven months were $751,000. Newman commented, “It’s just delicious to watch
the organic business grow.”
Tom Indoe explained the relationship of the Organics operation to Newman’s Own: “It’s almost
like a division. They’re part of the S corporation and they have to survive on their own. We do their
administrative stuff, help with quality assurance, and provide sales support, although they’re more
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into health food stores than grocery stores. Through our relationship with K-Mart we got them into
that chain. If they need help, they’ve got it, and if we ask them to do something, they usually oblige.”
Philanthropic Activities
In 1997 Newman’s Own generated gross sales of $62.6 million, producing a before-tax surplus of
$8.5 million. These annual flows had enabled Newman to contribute over $90 million to charities
since the inception of the company. (See Exhibit 4 for balance sheet).
Philosophy
Newman observed, “I wish I could lay claim to some terribly philanthropic instinct in my base
nature, but it was just a combination of circumstances. If it had stayed small and had just been in 14
local stores, it would never had been charitable. It was just an abhorrence of combining tackiness,
exploitation, and putting money in my pockets, which was excessive in every direction. I believe that
people who acknowledge luck in their lives are more generous than those who only acknowledge
their own rugged individualism. I am moved by the benevolence of luck in my life and the brutality
of luck in others. One thing that really bothers me is what I call “noisy philanthropy.” Philanthropy
should be anonymous, but in order for this to be successful you have to be noisy. Because when a
guy walks up to the shelf and says, ‘Should I take this one or that one?’ You’ve got to let him know
that the money goes to a good purpose. So there goes all your anonymity and the whole thing that
you really cherish. Publicize the generosity in order to become more generous. That’s been the most
difficult part of it.”
Beneficiaries
Hotchner was involved since the beginning with Newman in deciding to whom to give their
social surplus. He explained an important juncture, “After some years, Paul said, ‘We really ought to
have our own charity. We don’t have one that we’re identified with. We’ve been getting a lot of
requests from parents of children stricken with cancer. Why don’t we set up a really unusual camp
for these children where we can give them a wonderful time.’ That was the beginning of the Hole in
the Wall Gang2 Camp in Connecticut.” The camp was built in 1987 at an initial cost of $10 million
and now there are 5 associated camps in the U.S., Ireland, and France, which have benefited 15,000
children. Each camp had its own board of governors and is largely financially independent of
Newman’s Own, although Paul helped found each one and remained personally involved. Other
leaders had been attracted to the cause; for example, General H. Norman Swarzkopf was a Co-
Founder of the Florida camp. (See Exhibit 5 for the camp association’s mission statement.)
Hotch, who is on the Connecticut camp’s board of directors, remarked, “It’s wonderful for these
kids. That’s been the major source of satisfaction for me and I’m pretty sure for Paul.” Newman
added, “It’s certainly a big joy, but buying a bus for migrant farm workers in Florida can make the
whole year work for them. And the ten grand that you give to some soup kitchen or the $25,000 that
goes to a program for wayward kids make huge differences, but we’re very whimsical about how we
choose these.”
2 The camp’s name is derived from the Paul Newman – Robert Redford movie “Butch Cassidy and the Sundance
Kid.”
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Grant Process
Newman’s Own has one of its 15 employees dedicated full time to handling the unsolicited grant
requests. They receive hundreds weekly. Applicants can call the company’s voice mail day or night
to request an application. Hotchner, heads the charity operations and discusses with Newman any
requests that need immediate response. The majority of the requests are accumulated in a looseleaf
book broken down by category (arts, education, health, environment, children, elderly, animal
protection, women’s issues, and peace/human rights). Each page describes a charity, its request, and
its overhead as a percentage of program costs. Usually in November, Newman and Hotchner sit
down and go through the book, making their choices. They designate the remaining $3-$4 million
not already allocated to preferred charities that receive annual repeat donations or to some
organizations endorsed by their friends. Newman noted, “If their requests are worthwhile, why not
let your friends use your money.” There are no rigid allocation formulas, but they tend to spread the
donations across different sectors, geographically, and favor smaller nonprofits that would have
greater difficulty raising funds. Hotchner explained, “Overall our bent is towards the very young
and the very old, who really don’t get funded enough. We don’t do much in the mainstream.”
Involvement of Business Associates
Newman noted that “All of our partners have been very, very generous in terms of helping the
camps and providing sponsorships.” David Kalman recalled, “I was there when they announced the
camp and I never knew that kids had cancer. I called my partner and said ‘We now have a charity.’
My partners and I have given hundreds of thousands of dollars to the camp because we want to.
Nobody told us to.” Andy Crowley said, “We rent the Big Apple Circus for a day in Boston and
invite 1500 kids from the oncology wards. We do considerable fund raising for the camp. Last year
we raised over $150,000 squeezing our vendors. You wouldn’t be a vendor if you weren’t involved.
It is a form of being loyal back. Everybody should do something. I could do it on my own or I could
work at this.” Ed Salzano spoke similarly, “We’ve made the Hole in the Wall Gang Camp our charity
of choice, and I sit on the board of the Camp. It has also exposed me personally and my associates to
what a true philanthropist and what social consciousness is all about. It’s different than
organizations sponsoring things for the advertising value. Being involved in giving away $90 million
to help other people and children with cancer is something that I could have never dreamed about.”
The supermarkets also were involved. David Kalman pointed out that “Newman’s Own’s social
purpose meant we have something to talk about other than price. What do you do when you walk
into a chain store and you’ve got ten guys behind you in the waiting room all selling the same item?
They bring the money bags with them and say, ‘Okay we’re going to put in 10 SKUs’3 and drop
down $100,000. We can’t do that.” Newman’s Own encouraged supermarkets to make suggestions
of charities in their own communities. They called these “goodwill alliances.” Newman had 85 such
alliances in 1997 and contributed around $750,000 to these charities which returned funds to the
communities from which they originated.
MANAGEMENT TRANSITION
With the growth of the company came the need to strengthen the company’s managerial
resources. Newman explained, “About five years ago the company got to be around $60 million and
was getting really complicated, yet it had a writer and an actor running it. We didn’t have the
marketing skills, the computer skills, any of the necessary skills. We really had to get a COO.” The
first operating executive the company hired was an individual with extensive consulting background
3 SKU: Stock Keeping Unit refers to product category and subcategory, e.g., Salad Dressing, 16-ounce & 8-ounce.
Newman’s Own, Inc. 399-052
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but not in the food industry. Hotchner remarked on the transition, “It turned out to be difficult
because this is no ordinary company and it doesn’t go by ordinary rules. It requires a certain amount
of imagination and certainly has to do with a relaxed attitude, and yet you have to watch the bottom
line. One of our mottoes on the wall is ‘If we have a plan, we’re screwed,’ so we never had a plan. It was
just sort of follow your nose and try not to make any major mistakes that would put you out of
business.” The new executive, who was engaged in late 1997, was Tom Indoe, whose whole career
had been in consumer goods and food marketing. He commented on the challenge of taking charge,
“You’ve got to establish credibility with Paul and everybody here. And I guess you have to have a
small ego.”
The New C.O.O.
Tom Indoe worked in sales and marketing for about three decades, first for Sterling Drug, then
for RJR, which acquired Delmonte, Morton Frozen foods, and Nabisco. Next he ran a $20 million
food company. Newman commented on what he was looking for in a manager, “someone with a lot
of marketing skills, who could run a business, was intimately connected with the grocery business,
and really good with people. Tom fit the bill. I liked his personality – outgoing and straightforward.
And Tom has made some sacrifices from a salary standpoint. It’s not like you’re working for a
completely for-profit enterprise.” Indoe commented on his motivation in joining Newman’s Own as
Chief Operating Officer and Senior Vice President, “First, they had potential for tremendous growth.
The second thing was the social benefit. I think everybody at one point says, at the end of the day,
what am I going to be known for? What did I really contribute? Is it that we put more Planter’s
Peanuts on the store shelf? So, here I get to run a consumer company that does a lot of good things.”
After joining Newman’s on December 1, 1997, Indoe took actions in several areas.
Planning
When Indoe arrived he was “shocked” to discover that the company had never had a budget, so
he and the staff constructed one for 1998. He remarked, “We didn’t know how well or poorly we
were doing in specific areas so that we could focus against some of those. So we started to develop a
game plan of what we were going to improve in our business.” This plan encompassed several of the
following initiatives.
Distribution
In o