Walter Pearce moves from investment newsletters to award-winning food letter and the wonderful world of ancillary products.

Sometime after graduating from the University of Virginia with a liberal arts degree and no particular career goals, Walter Pearce found himself working for a small, five-person firm producing seminars and conferences. They dealt largely with environmental regulations. "Remember Superfund and toxic waste storage?" he says. "It was the early '80s, the era of Reagan deregulation, and it was an increasingly hard subject to sell, so we partnered with a newsletter publisher, Inside Washington Publishers."

Intrigued by newsletters

"In the course of working with them, I was intrigued by newsletter publishing--what a great business, not just selling a service but with renewal income possibilities."

So, after leaving the conference firm and a short, unhappy experience in high tech, he thought, "Why not look for a job in newsletter publishing? I wound up as a marketing manager for KCI Communications. It was 1986, first working on a short-lived project called 'Free Enterprise' and later on Personal Finance," Walter says.

"Time went by and as [owner] Allie Ash became more involved with cars and his Ferrari dealership, I was named publisher in 1992."

Today Newsletter Holdings' KCI Communications publishes eight financial newsletters and eight e-zines. Another division of Newsletter Holdings, the National Institute of Business Management (NIBM), publishes the late Louis Rukeyser's newsletters. Pearce says the Rukeyser mutual fund newsletter may soon be sold and they are in the process of 'winding down' Louis Rukeyser's Wall Street.

But the title which caught my eye is The Rosengarten Report on food, seemingly quite a reach for a longtime investment publisher.

"There's a story," Walter says. "Gary Bencivenga (the well-known copywriter) was running a fund-raising event and David Rosengarten was involved as the celebrity chef. He came to Gary to ask advice about his newsletter. Gary thought, 'Oh Lord, another newsletter,' but when he read it he realized, 'This guy can really write.' One thing led to another and we became publisher of the newsletter."

Foodies' lists hard to come by

Walter continues, "There weren't then and really aren't now any food newsletter lists for us to use, so we went to high-end food magazines and kitchen equipment catalogs. As often happens, the package Gary created for us was an out-and-out winner.

"Plus, David knows everyone in the business and we had great testimonials from people like Al Roker and chef Mario Batali." (Mario writes, "His newsletter is my in-depth info source for well-researched and intelligent commentary on anything from chocolate to Chianti.")

"Circulation reached over 35,000, maybe 38,000 at the top, but then we realized we had a management problem," Walter says. "David had been used to writing for an audience of about 800 knowledgeable food fanatics and we needed to reposition the editorial for the more general audience. Renewals, to be honest, were poor."

I should add that their poor renewal rates do not especially reflect on the quality of the editorial content. "Lifestyle" newsletters--food, travel, weight loss--are often the victim of the subscribers' changing whims.

Additional products

Walter again: "Along with editorial changes--and David still does all the writing--we also needed additional income sources. We were able to find it in developing a nice back end. Sales of gourmet food. We have found a few that work but olive oil is the crown jewel. We have a quarterly olive oil club.

EVOO (thanks Rachael) is a perishable product. "It's never better than when it is fresh squeezed and every three months it is being processed somewhere in the world and we buy the best. Club members get three bottles for $79 or $99 plus S & H.

"We've also had success with a monthly cheese program and a cured meat program. Wine, on the other hand, bombed. It's still just too difficult to be able to ship wine across state lines."

No longer a print edition

Walter tells me, "We've made significant changes. The newsletter no longer has a print version but is online only. Along with the monthly report there is also a weekly e-zine and an olive oil e-zine is being launched," Walter says.

(I had to note for Walter that the website still contains several testimonials referring to the feel of the paper and the newsletter dropping through the mail slot.)

But the website has all the features of the master copywriter Gary Bencivenga; it's one long--very long--unrelenting sales letter, in which "Click here to find out more" and "Click here for a no-risk subscription and Receive 12 Free Gifts!" appear regularly.

Circulation has settled at around 7,000, which still sounds like a good business when you can sell back-end products at twice or more than the $39.50 price of the newsletter.

Plus, Walter says, "We will be going full-bore on developing the online business. Still, in coming full circle, we are developing a direct mail package to market the olive oil program."

To conclude, a long-time financial publisher is succeeding in the new world of food newsletters and, presumably, eating better at the office as well.

KCI Communications Inc., 7600A Leesburg Pike, West Building #300, Falls Church, VA 22043, 703-394-4931, fax [phone], www.rosengartenreport.com