Media Fortune Fame & Folly

Will ATK cooking go global?

The pandemic has changed appetites for food as well as media. Being stuck at home, not commuting and feeling unsafe going to restaurants has encouraged consumers everywhere to spend more time and money cooking. Analysts say the average American has traditionally spent 50% of their ‘dining dollars’ away from home and that this halved during the pandemic. Many Generation Xers (born 1965-80) and millennials (1981-96) have got into cooking for the first time during months of working from home. They’ve tried new recipes, baked bread, created gourmet sauces – and turbocharged the business for food media everywhere.

Take the New York Times whose seven-year-old NYT Cooking app now has 750k subscribers paying $5 a month. Last year, some 113m users were attracted to its recipes and guides – 40% up on 2019. The news brand that has been quicker than most to contemplate a world where digital readers can ‘pick and mix’ their chosen content is finding its archive of 25k recipes is winning new, non-newspaper users all the time. NYT Cooking now boasts a newsletter that is the New York Times’ second largest, after its daily news round up, The Morning. It also boasts 370k YouTube channel subscribers and 3m Instagram followers. 

The Meredith-owned, 25-year-old Allrecipes – which claims to be “the world’s largest community-driven food brand” – provides more than 60m home cooks with recipes from their peers around the world who inspire each other through photos, reviews and videos. Its 2020 web traffic increased by 20% to an average of 51m monthly uniques. Total annual page views rose by 50% to 2.9bn. Circulation of its bi-monthly magazine has grown almost three times to 1.4m in the past few years.

Condé Nast’s Bon Appetit is rumoured to be planning an app to compete with NYT Cooking, including recipes, video and virtual cooking lessons. The powerhouse magazine has a monthly readership of 5.8m in print and 16.3m uniques. It reports a 49% growth in subscribers during 2020. Average monthly video views are 166.4m.

In Australia, News Corp’s Taste reaches 5m people in print and digital – some 25% of the country’s adult population who can access its 50,000 recipes free of charge. Even in one of the countries least affected by the pandemic, Nielsen has reported an increase of 70% in time spent on online food and cooking sites. Usage by Australians aged 13-24 grew by 144%.

In the UK, the Immediate (Burda)-owned BBC Good Food is the largest food and cooking site, the leading magazine (1.3m readers) and (pre-pandemic) was organiser of exhibitions attracting a total of 1m visitors. In 2020, global user numbers peaked at 53m monthly in April and averaged 40m users / month across the year. Magazine subscriptions grew by 14%. Its 100+ new episodes of original video content generated 93m views.

More people are cooking than ever before and the trend seems likely to continue, even as the pandemic recedes. In the US, it has helped to galvanise an innovative cooking media group which is about to celebrate its 30th anniversary. In 1992, a publisher and private equity executive had together launched the stylish Cook’s Illustrated magazine. The difference was that they would not take advertising but would depend only on circulation revenue, a seemingly odd thing to during the decades when high-priced food ads were readily available. 

Their idea was to be as independent-minded as, say, Consumer Reports in the US and Which? in the UK. It then became a pioneer TV broadcaster and one of the first publishers to launch a paywalled site, in the late 1990s – again when almost everyone else was intent on building audiences, leaving for later the little question about how to monetise.

Today, the magazine is part of America’s Test Kitchen (ATK) which features eponymous TV shows on the non-commercial PBS channels, Cook’s Country magazine, an online cookery school and lots of books, video and kitchen equipment. The company is known for its rigorous testing of recipes and equipment – and for the folksy TV shows. It is trusted for its integrity, the no-ads policy and is admired for a level of innovation other specialist media dream about.

The privately-owned ATK is believed to have revenue of more than $100m – doubled in 10 years – and EBITDA margins of over 20%. Last year, revenue grew by double digits and gave ATK its most profitable year. 

The essence of the company is:

  • Two PBS TV shows with 4m viewers 
  • Two paid-circulation magazines with a total of 1m subscribers
  • 500k digital subscribers paying $39-75 for online access to recipes and videos
  • 1m book sales annually 
  • 1.3m YouTube subscribers
  • Online cookery school membership, doubled in the past four years

It’s arguably the most trusted test kitchen in the US and has thousands of videos that show how to cook virtually anything. The ATK headquarters has four test kitchens spread across 15,000 sq ft of Boston waterfront. Sixty full-time cooks test recipes up to 100 times (they say), with help from a panel of 40,000 volunteer home cooks. They also test cookware and supermarket ingredients. The ATK building has two television studios.

There are lots of distinctive things about this company.

The most important may be that – for all its versatile, multimedia approach – ATK generates some 60% of its revenue from subscriptions and uses the TV channels – and, increasingly, programmes on OTT providers like Roku, IMDB, Samsung, and Pluto – to promote subs. That’s the heart of the business. The other 40% of revenue comes from 1m book sales annually, affiliate e-commerce with Amazon, and online education.

It’s also launched ATK Kids for 8-13 year olds, an idea prompted by its “Complete Cookbook for Young Chefs” which was in the New York Times bestseller list for almost two years. Parents pay $25.99 monthly for their children to be members of the Young Chefs’ Club. Its Youtube Channel has 1m subscribers and ATK Kids almost trebled its revenue in 2020.

Americans also remember something slightly less impressive about America’s Test Kitchen: a three-year legal stand-off with Christopher Kimball, the company’s TV face and co-founder. The dispute, which was settled out of court in 2019, had centred around allegations that Kimball had used ATK resources to establish his own rival company. But it must also have been provoked by the 2015 appointment of ATK’s first CEO as part of the owners’ search for a strategy for succession, digital growth – and more profit. 

Enter David Nussbaum, the veteran publishing executive who had been CEO of F+W and Penton Media. With serious tech credentials and a onetime background both in journalism and private equity, the energetic Nussbaum seemed just right for the three family owners of a business which – curiously – will “never” be sold.

The company – which never makes acquisitions and has negligible debt – is unmistakeably ambitious to grow further and faster, especially in online video: “Unlike most media companies, ATK has been producing video for 19 years, so we’re good at it. We combine great recipes with science and compelling stories, and have experienced talented and well-known chefs. Thus, video is our no.1 strategic focus and our fastest-growing sector”.

The CEO says ATK really is a different kind of media company: “We do view ourselves as the Consumer Reports of the recipe and cooking field. First, we take no advertising. The others…are heavily advertising-based, so that’s one major way we’re different. Second, we test each recipe upwards of 50 times. Third, the rough average we spend on our recipe development is $10,000 per recipe, and I guarantee you there’s no competitor that’s even close to that. Fourth, we think about the quality of the food, the quality of the recipe, the ease for the home cook — everything we do is something you can do at home. I think those are the big differentiators.”

As if to emphasise the difference, the CEO has added 35 people since he took over, up from a headcount of 165 in 2016: “I don’t think there is any media company in America that grew by that much.” Now, he’s just got the owners’ approval for 50 new recruits, including software engineers and video/TV people to spearhead the next phase of expansion. But the investment in video shows how ready ATK may be to internationalise a business that is no longer built around print magazines. It has started thinking about it.

At a time when the best rewards in media go increasingly to ‘narrow but deep’ versatile specialists, ATK is a multi-channel standout: a case study for narrowcast media everywhere. But non-US firms – also benefitting from their own growth of home cooking – could do worse than befriend the content-rich, super-steady America’s Test Kitchen. A perfect JV partner. What are you waiting for?

America’s Test Kitchen