The New York Times cooks up a new e-commerce plan with meal kits
May 5, 2016 03:33 PM
(Bloomberg)—It’s all the food that’s fit to eat.
This summer, the New York Times will begin selling ingredients for recipes from its NYT Cooking website as the newspaper publisher seeks new revenue sources to offset declines in print. The Times is partnering with meal-delivery startup Chef’d, which will send the ingredients to readers within 48 hours. The Times and Chef’d will split sales from the venture.
“Our audience spends a lot of time cooking at home,” said Alice Ting, vice president of brand development, licensing and syndication for the Times. “So for us it was a natural area to investigate.”
The Times’ foray into meal delivery is another example of how the publisher is looking for new ways to make money from its content, brand and journalists to hedge against the uncertain future of newspapers. Last year, circulation and advertising accounted for about 94% of total revenue.
In recent years, New York Times Co., No. 824 in the soon-to-be-released Internet Retailer 2016 Second 500 Guide, has started businesses around live conferences, a wine club and an online store that sells hats, shirts and other trinkets with Times logos. The paper also runs a growing travel unit, “Times Journeys,” in which tourists pay thousands of dollars to see countries like Iran or Cuba, many of which are led by Times foreign correspondents.
The Times expects meal delivery to be as big as Times Journeys, “if not bigger,” Ting said. Last year the company’s “other revenues,” which include rental income, conferences and e-commerce, generated about $95 million in sales, according to its annual filing. The Times doesn’t break out e-commerce revenue separately. Internet Retailer estimates 2015 web sales at $10.2 million, according to Top500Guide.com data.
‘Comfortable in the kitchen’
NYT Cooking, edited by Times food editor Sam Sifton, has about 7 million monthly active users and features more than 17,000 recipes from the Times archive. On Wednesday, the site featured one recipe for marinated celery salad with chickpeas and parmesan and another for braised chicken with artichokes and olives. Readers can save and rate recipes and leave notes for other cooks. And this summer they’ll be able to buy food kits a la carte or enroll in a subscription service. They’ll also get recipe suggestions based on their preferences.
“These meal kits we’re offering are just another tool to help our users become more comfortable in the kitchen,” said Amanda Rottier, product director of NYT Cooking, which launched in September 2014.
Chef’d has exclusive relationships with over 90 chefs, companies, and brands, including the publishing company Rodale Inc. and magazines like Men’s Health. Meal kits for two people range from $19 to $39, according to the Chef’d website. CEO Kyle Ransford calls his company “the last mile between the recipe and your front door.”
There are dozens of other companies, including Blue Apron Inc. (No. 231) delivering meal kits to consumers’ homes. The Times chose Chef’d partly because it had similar relationships with other publishers. “We wouldn’t do this if we didn’t think there was a revenue opportunity,” Ting said. “This is definitely not the last one.”
As the advertising market remains uncertain, the Times is relying more on its readers to support its journalism. The paper now has about 1.36 million paying digital subscribers to its online news and crossword products. Earlier this week, the Times reported first-quarter profit that beat estimates as it added digital subscribers but reported a drop in both print and digital advertising in the quarter.