Chapter 12 Case Study
NEWMAN’S OWN ORGANICS:
SALES PROMOTIONS AND RETAIL RELATIONSHIPS
Jason David had recently been promoted to director of sales promotions for Newman’s Own
Organics. He was excited to find ways to expand product offerings into a wider variety of retail
stores. His assignment was to fine-tune both the consumer and trade promotions that would be
offered in various markets.
Newman’s Own Organics is a spin-off from the original Newman’s Own company. In the 1980s,
celebrity actor Paul Newman and his friend, writer A. E. Hotchner, decided to concoct a batch of
salad dressing to be given to their friends for the Christmas holiday season. The dressing became
so popular that the two created the Newman’s Own company to sell the item. The two agreed
that proceeds and profits would be given to charity.
Newman’s Own sold more than 10,000 bottles of the salad dressing in its first two weeks on the
market. In the first year, Newman’s Own made a profit. The company slowly expanded to a
wider variety of salad dressings, and then to salsa, marinara, steak sauce, pizza, and even wine.
Among the more famous charities supported by Newman’s Own are the Hole in the Wall Camps,
which bring together children with serious and terminal illnesses for a free summer-camp
experience. The Newman’s Own Foundation had given more than $250 million to various
charities prior to Paul Newman’s death. The figure now approaches $300 million. The
company’s mission statement reads, “Shameless Exploitation in Pursuit of the Common Good.”
Newman’s Own Organics was founded by Nell Newman, Paul’s daughter, in 1993. She became
the sole proprietor in 2001. The product line for Newman’s Own Organics includes pretzels,
chocolate bars, “Fig Newmans,” Champion Chip Cookies, Chocolate Cups, Newman O’s, Pop’s
Corn, Alphabet Cookies, coffee, dried fruit, olive oil and balsamic vinegar, dried fruit, pet food,
mints, tea, and soy crisps.
The company’s products are certified to be genuinely organic by Oregon Tilth. This
means that the ingredients are grown on farms that have not used artificial fertilizers or
pesticides for three years or more. The farms and processors have been certified by an
independent third party. Kosher certification is made by the Union of Orthodox Jewish
Congregations.
Newman’s Own Organics is described as the “second generation.” The company is for a profit,
with a royalty paid to the Newman Foundation based on sales and profits. In this way, the
organization is able to capitalize on the popularity of Paul Newman, the strong relationship to
charitable giving, and the niche market of organic foods. Jason’s responsibility was to find and
develop retail outlets for Newman’s Own Organics products. Large retailers that sell food
products, such as Target and Walmart, constitute one major marketplace. Small grocery stores
that are more upscale and feature organic foods are a second. Third would be any specialty stores
that offer organic products.
Prospects might be developed by identifying the stores that carry Newman’s Own products.
Further, the internet offers the potential to sell products directly to consumers without a retail
store but also to direct consumers to stores that carry the items. Various types of promotions for
the products and various charities, including the Hole in the Wall Camps, could be promoted on
the Newman’s Own Organics website.
Jason knew that he had the advantage of a strong brand, plus connections to the original
company that would give him in-roads into meeting with prospective retail customers. He also
knew that it would take more than a name to persuade retailers to make room on the shelves for
the products. Beyond simple placement, the ultimate goal was to develop bonds and relationships
that would lead retailers to feature the products in advertisements and promotions over time.
1. What types of consumer promotions would be best suited to end-users of Newman’s Own
Organics products?
2. What types of trade promotions should Jason offer to retailers?
3. Would you expect Newman’s Own Organics products to sell at a higher price than
competitors, match competitor prices, or to compete by lower prices in various ways,
including using sales promotions?
4. Should Jason explore placing Newman’s Own Organics in restaurants to gain brand
recognition? Why or why not?
5. Can you envision any types of trade shows the Jason should attend on behalf of
Newman’s Own Organics? Access the Trade Shows News Network at www.tsnn.com and
BizTradeShows at www.biztradeshows.com for specific trade shows and locations.
6. Now that Paul Newman has passed away, what challenges will be present as the “second
generation” companies moves forward and memories of Paul Newman begin to fade
away?