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Cooking Up A Storm

Allrecipes.com began the new millennium by being named the #1 Food & Cooking website by Nielsen/NetRatings. What’s even more impressive is how they got there. Allrecipes achieved the top spot with next to zero advertising. So far, it has relied mostly on word-of-mouth referrals based on the interaction of its strong online community — people sharing and rating each other’s cooking recipes. With its magnetic appeal and low-overhead business model, Allrecipes has attracted some $9 million in VC funding during the past year. And based on how its multiple revenue streams are progressing, it now says it’s on track to turn a profit by the end of this year. To find out more, we turned to Jennifer Rice, Community Relations Manager at Allrecipes.com. She knows how to manage classic ingredients. Before becoming part of Seattle’s Internet scene, she worked at the Smithsonian Institution in Washington, D.C.–LS

Seattle24x7: How did you manage to take over the #1 Food & Cooking Website spot from rivals FoodTV.com, Cooking.com, MarthaStewart.com and Epicurious.com?
Rice: It’s been a long climb for us. FoodTV is the Food Network on cable television. They feature famous cooks (Julia Child, Paul Prudhomme, etc.) and publish their recipes on their website, FoodTV.com. Their membership numbers are huge, and so is the money involved. MarthaStewart.com is supported by her magazine and TV show. Epicurious.com is supported by Bon Appetit and Gourmet, both of which are Conde Nast publications.

We have no magazine, no paid advertising, no cable TV channel, no catalogue — yet we managed to attract 2.2 million unique visitors in December 2000. And we’ve done this mainly by word-of-mouth recommendations, as people tell their friends about Allrecipes.com.

Seattle24x7: What is the user experience on Allrecipes.com?
Rice: Our users feel like they own our website. They’re the ones contributing recipes, rating and reviewing them. When a recipe consistently gets poor reviews, we take it off. Highly-rated recipes get pushed to the front and make our Top Ten list.

One of the our users’ favorite features is “scaling.” You can scale the recipe up to feed 40 to 50 people, and mathematical algorithms will make sure you get the same result. For example, if you simply double the yeast in a baking recipe, chances are you’ll end up with a huge mess.

Seattle24x7: Do you have a test kitchen in your offices?
Rice: We have 13 culinary experts on staff, each with different backgrounds. We have our bakery chef, our seafood expert. Sometimes we’ll get a recipe that’s so unique that our experts really question how it will taste or how it will work. That is when we go into our test kitchen. Actually, all our desks are centered around the kitchen; it’s kind of fun. And the office always smells wonderful.

Seattle24x7: What has been your rate of growth? When does your traffic peak?
Rice: Our heaviest overall traffic tends to occur from Halloween through New Year’s Day. But we also get seasonal traffic surges. For instance, our Barbecue section gets high traffic from May through August, our Soup section gets higher traffic in February and March. That’s one of the appealing aspects of having the site organized by 24 different subsections.

Our growth has been viral. On average, each of our visitors is emailing recipes to seven other people. That’s one of the reasons why we haven’t had to do an extensive advertise campaign. About 15% of our users are international, with an English-speaking bias. We have a lot of readers in Canada and also in New Zealand, Australia, United Kingdom.

Where does your revenue come from?
Rice: We have multiple revenue streams:
(1) Advertising & Sponsorships. We’ve been approached by a number of consumer packaged-goods companies, like Betty Crocker and Hershey’s, mainly because our site visitors are 70% women, between the ages of 34 and 54.

(2) We can also offer product sampling, as well as “ingredient sponsorships.” For example, Domino’s Sugar might sponsor every recipe on our site that calls for sugar.

(3) Syndicated content. We have 13 editors on staff, writing and researching different subject matter. And other websites are interested in syndicating that content from us. Plus, we have an e-mail newsletter that goes out every two weeks, and that contains advertising.

(4) Grocery shopping, which is now in development. Currently, you can move recipes from a “Recipe Box,” into a “Shopping List.” But by the end of this year, you’ll also be able to send that list to a grocery store for delivery or pickup.

(5) Coupons. Our users have told us they want coupons on our site, and we’re currently working on that.

Seattle24x7: You also have an affiliation with one of the largest sources of cooking products?
Rice: Yes, Kitchen Etc. They’re based on the East Coast and have both brick-and-mortar stores and an online presence. We’ve been working with them to provide culinary ware, and some specialty food items. They have approximately 30,000 products. Amazon.com, in their kitchenware
section, has about 8000 items. And we offer even more specialty food items through our food partner, ElectricFood.com. They stock things like soy-milk products, ethnic foods and spices.

Are you profitable now? If not, when do you think you’ll be in the black?
Rice: We hope to reach profitability by December of 2001. That’s the way our budget and business model have been designed. So far we’re meeting all of our goals.

Seattle24x7: Are recipes considered intellectual property?
Rice: That’s a question we’re very sensitive about, and we provide info on that on the site. In layman’s terms, you can own and trademark the set of recipe directions and the title of the recipe, but not the list of ingredients. So you can trademark “Larry’s Chicken Soup,” and I can trademark “Jennifer’s Chicken Soup,” even though our ingredients might be exactly the same. Also, I can copyright the fact that I tell you to brown the onions before you put them in the broth.

When people submit recipes to Allrecipes.com, they still retain ownership of the recipe name and directions. And we give them full credit–“This Recipe has been submitted by Jane Doe.” But Allrecipes has the right to modify the directions using our terminology.

Seattle24x7: Could you publish a cookbook?
Rice: We don’t have plans to do a cookbook right now. But we do get a lot of newspapers asking us for reprint rights to recipes. We allow that, but we demand that the recipe include the name of the person who submitted it to us. We’ve promised our users we’ll never reprint these recipes, without giving credit to the person who submitted them.

Seattle24x7: We’ve got to ask you about the proverbial wireless applications.
Rice: Well, we’re there, too. We’re available on four different wireless Web providers right now: AT&T, Sprint PCS, Verizon and Bell Mobility in Canada.

Seattle24x7: Any safety issues? I just read somewhere to never put eggs in your microwave; they turn into small bombs.
Rice: There are a lot of safety concerns, particularly when cooking with kids. So we’ve designed a special kid-recipe section. We have things like Fruit Pizza and Peanut Butter Play Dough that are either no-bake items, or things kids can do themselves with very little help.

Seattle24x7: Sounds yummy, Thanks.

Larry Sivitz is the Managing Editor of Seattle24x7.
321 Minor Ave. N.
Seattle, WA 98109
Phone: (206) 292-3990
Fax: (206) 292-1793

E-Mail: staff@allrecipes.com

Founded: 1997
Number of employees: 50
Funding so far: $9M

Major Investors: Nevis Capital Management and Sugar Mountain Capital
Other Investors: Individual investors including Frederick J. Warren, co-founder of Brentwood Associates; Larry Murphy, former executive vice president and chief strategic officer for the Walt Disney Company; and Michael Brochu, president and CEO of Primus Knowledge Solutions. Prior Seattle-based investments include Sierra Online and OnHealth Network Company.

President CEO & Director: Bill Moore
CFO: Kelly Price
CTO: Tim Hunt
Marketing Dir.: Michelle McEttrick
HR Director: Carolyn Pedersen