Login or signup
36
E-COMMERCE

Upstarts: Convenience Cuisine
 

Not sure where your next meal is coming from? Try the Web. A look at why several Internet start-ups are hoping online shoppers will turn to the Web to satisfy their appetites.
Advertisement

What's Cooking On-line?

If you're not sure where your next meal is coming from, you might try the Internet

The Web's next killer app? Think arugula.

A host of entrepreneurs are convinced that, just as the on-line arena has changed the way we communicate, shop, and invest, it will change the way we seek sustenance as well. "People have to eat three times a day, but even on the brink of the new millennium, nobody has found a way to get more free time," remarks David Hodess, the 37-year-old CEO and cofounder of Cooking.com, one of the new players catering to today's time-starved -- and just plain starved -- consumers. Along with former Disney Store executive Hodess, refugees from Microsoft and PepsiCo, as well as such high-profile venture capitalists as John Doerr, are staking their money and their good names on new sites that promise to point and click consumers to their next meal.

What to have for dinner tonight? The next five nights? That dinner party you've scheduled for Saturday? Both Hodess's Cooking.com, in Santa Monica, Calif., and another on-line start-up, Tavolo, in San Rafael, Calif., offer thousands of gourmet products and wares that can help answer those questions. Each site is financed with $50 million in seed funds and is as much an information resource as a culinary E-tailer. Click on either site's weekly menu planner for week-at-a-glance menu suggestions, with printer-friendly recipes.

In addition, both sites offer various foodie bells and whistles. Tavolo's site (www.tavolo.com) has features that convert recipes from standard to metric measurements, tailor recipes to the number of people being served, and create a shopping list based on your weekly menu. Cooking.com has an on-line glossary for boning up on the history of cognac or determining the precise definition of a zapotilla.

But customizable recipes and on-line glossaries are just the marketing bait. What these sites really want to do is sell you stuff. "Providing a free recipe certainly has value for the consumer," says Ken Cassar, an electronic-commerce analyst with Jupiter Communications, an Internet consulting company in New York City. "But it's also a great opportunity to sell mortars and pestles."

As Tavolo founder and CEO Kevin Applebaum is fond of noting, with $55 billion in total sales (both on-line and on terra firma), the market for cooking products and gourmet foods represents a huge category. The leading national retailer of cooking supplies -- Williams-Sonoma -- has a market share of less than 1%. But Applebaum, who honed his marketing skills at PepsiCo and Procter & Gamble, also knows he's not alone in spotting cooking sites' potential. Numerous national retailers, from Macy's to the aforementioned Williams-Sonoma, are also chasing the ever-expanding on-line opportunity. So is the ubiquitous Martha Stewart, whose Web site, launched in 1997, is in the process of receiving a $25-million tune-up, courtesy of new investor Kleiner Perkins and its general partner, John Doerr.

The real challenge for all the gourmet sites, says another Jupiter Communications analyst, Michael May, will be to get the people who purchase gourmet food and wares on-line to go from buying gifts to buying for themselves. The majority of the $200 million in on-line sales of small appliances and gourmet-food items last year occurred during the fourth quarter, for holiday gifts, notes May. Arugula-artichoke-with-roasted-garlic pesto pasta sauce may make for a terrific gift, but it isn't what people are buying for their own dinner tables -- at least not tonight.


Cyberconsumption

Food and kitchen supplies may not be the biggest on-line shopping category at the moment (books currently hold that honor), but according to Jupiter Communications, they're where the growth will be between now and 2003. Odds are, Peapod and its ilk will eventually outpace their Amazonian counterparts.

Projected on-line consumer spending, by category

1999 2003 % change
(in billions)
Groceries $0.2 $7.5 3,650%
Housewares $0.1 $1.5 1,400%
Specialty gifts* $0.1 $1.0 900%
Music $0.3 $2.6 766%
Apparel $0.8 $6.7 738%
Videos $0.2 $1.1 450%
Toys $0.3 $1.6 433%
Electronics $0.4 $2.1 425%
Flowers $0.2 $0.8 300%
Books $1.3 $4.9 278%

*Gourmet food makes up a significant percentage of this category.

Source: Online Consumer Spending Forecast,
Jupiter Communications, September 1999.


Party of 10? Click Here

Sure, much of the on-line cooking sector caters to aspiring chefs. But what if you and the kitchen aren't on speaking terms? And you happen to like it that way?

Take heart. A crop of new sites seek to gratify the pantry-phobic as well. Feel like takeout tonight? San Francisco-based Food.com offers on-line ordering -- and, more important, local delivery -- from more than 13,000 restaurants nationwide. Feeding your face is merely a matter of entering your zip code and navigating menu offerings. Since restaurants are notoriously low-tech, the company's server in Seattle translates on-line orders into a fax or a phone call, which is then sent to participating eateries, a service for which Food.com reaps a $400 setup fee, a $50-a-month retainer, and 5% of each order.

For those who'd rather dine out, at least two new companies offer on-line reservations. Both foodline.com, in New York City, and OpenTable.com, in San Francisco, are attempting to replace the traditional phone-and-paper-based restaurant-reservation system with a Web-based one. They charge participating restaurants about $200 a month in service and transaction fees (and in OpenTable.com's case, a $1,000 setup fee). Currently serving a handful of cities, both plan to be nationwide and to ultimately link their service directly into the restaurants' individual point-of-sale systems. They also hope to personalize the diner's experience. "Imagine being able to remember that Mr. Jones is allergic to shellfish or sending a promotional E-mail to your top 100 August diners," rhapsodizes former lawyer Paul Lightfoot, Foodline.com's 29-year-old CEO.

CookExpress.com, launched in January 1999, offers an on-line option that's between cooking from scratch and dining out: a gourmet, ready-to-cook meal sent to your home by FedEx. Founder Darby Williams, 46 -- another Microsoft escapee -- calls CookExpress.com a "smarter way to cook." Three-part meals (for example, roasted salmon with herb-caper sauce, potato-olive salad, and baby arugula), each requiring less than 30 minutes to fix, are delivered to your door (currently just in the Bay Area, where CookExpress.com is based) or by overnight delivery nationwide. Prices range from $8 to $15 per serving, plus a single $4.95 local delivery charge or a shipping cost of $12.95 to $16.95 (based on the number of meals).

Yeah, but is the stuff fresh? To mollify those squeamish about the idea of filet mignon that arrived through a delivery service (albeit packed in high-tech gelatin ice), the company has devised a system of labeling each package with color-coded dots that change color if the food hasn't remained chilled. The packaging also indicates how long the food inside should stay fresh (usually two days).

Williams boasts that the company has the potential to be a billion-dollar enterprise within five years. He plans to expand the CookExpress.com same-day service into at least 30 U.S. markets as well as another 6 to 8 markets outside the United States -- each worth $25 million in his estimation. He also hopes to add a retail component to his distribution.

The logistical complexity of such an undertaking actually appeals to Williams, although, he readily concedes, "had I been in the food business before, I probably never would have done this."


Child in the Wild

Julia Child is cooking. So who better to ask about the marriage of virtual and victual reality? And, surprise! She's all for it, having become Web-friendly and computer-adept herself during her many years of bringing haute cuisine to the masses. Contributing writer Alessandra Bianchi caught up with the culinary grande dame at her home in Cambridge, Mass.

Inc.: Do computers and cooking mix?

Child: They certainly do. It's marvelous what computers can do for you when you're cooking. In fact, A La Carte Communications, the producer of my new television series with Jacques Pepin, has a site, Alacartetv.com, and it has everything on there! You can get TV schedules, cookbooks, even précis of our upcoming shows.

Inc.: Do you use a computer in your work?

Child: Yes, I have had a computer since they first came out. I use it for writing. I used to do my books in longhand, but word processing is so much easier, for a clear copy and for cleaning up. Recently, I started using the Web to find books -- cookbooks from London, for example -- and it was a snap. It's tremendously useful for getting products, too. By clicking on www.fromages.com, you can get real French cheese directly from France, even though you're a person and not a company!

Inc.: But would a serious chef log on to the Web for advice, recipes, and menu planning?

Child: Perhaps not now. But eventually, quite possibly. Now it's fairly primitive, and a good chef would already have a recipe in his or her own library. The cooking information on the Web isn't always complete or easy to find. For example, if you look up fava beans on a search engine, you don't get much. But the Web sites are particularly good for beginners. One thing the sites haven't entirely worked out is how you pay for the research you do. Eventually, it will be wonderful.

Inc.: What do you think the development of cooking Web sites says about our culture?

Child: I think it shows we're a progressive culture embracing new ideas. It's incredible, really. Of course, it helps to know what you're looking for. But what's happening on the Web is marvelous for cooking.

Last updated: Jan 1, 2000




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Comment and share features
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: