- In September 2019, Food52 sold its majority stake to TCG Capital for $83 million. Valued at more than $100 million, the company plans on opening a brick-and-mortar store for their branded products in 2020, according to The Wall Street Journal.
- The media and ecommerce business stands out with its terrific content, effective community engagement, and ability to monetize both, according to Mike Kerns, cofounder and partner at TCG Capital.
- As a company that "never had a lot of funding ... any aggressive expansion we've had was the result of proving out a concept and expanding organically," said Amanda Hesser, cofounder of Food52. So for the last 10 years, she and her cofounder Merrill Stubbs gradually adapted their business and content strategy.
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In a competitive marketplace that sees more than 500 million blogs and 12 to 24 million ecommerce sites worldwide, Food52 stands out with its terrific content, effective community engagement, and ability to monetize both, according to Mike Kerns, cofounder and partner at TCG Capital.
Founded by former New York Times food writer Amanda Hesser and Merrill Stubbs in 2009, the site initially focused on weekly recipe contests that would generate content for several cookbooks.
Ten years and 16 million followers later, the blog has become a company valued at more than $100 million — having generated approximately $30 million in revenue in 2018 and sold for $83 million in majority stake to TCG Capital in September. In a relatively short time, Hesser and Stubbs built a brand valued on par with New York Magazine, which was acquired by Vox Media at a $105 million valuation.
Turning a blog into a lucrative business involved a measured approach from Hesser and Stubbs. Since the company "never had a lot of funding," Hesser said, "any aggressive expansion we've had was the result of proving out a concept and expanding organically."
The story of Food52 began 10 years ago when the cofounders funded the site with an advance from a multi-cookbook deal. Before its launch, they collected email addresses through a splash page for the beta site. Thousands signed up, so Hesser and Stubbs knew they had generated some buzz.
As readership grew, here's how they tweaked their business and content strategy.
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Zero
Producing regular content and communicating with readers have been top priorities for Food52 from day one. The cofounders focused on organizing weekly contests, which involved testing recipes, styling and taking food photos, creating as much content as possible, and answering every reader's feedback, according to Stubbs.
"It was about giving people a reason to visit us every day, and building trust and a sense of us all being in this together," Stubbs said.
1,000
In 2010, the cofounders poured more effort into communication outside the site. However, there was no Instagram and Twitter was relatively new, so they went for email instead.
Hesser described their email format to First Round Review as "very magazine-like" — first by catching readers' attention with a solid headline, then by engaging with terrific photos and diverse content. Till this day, email remains the "most effective means of communication," the cofounders remarked.
10,000
When readership grew to around 10,000 within the same year, Hesser and Stubbs started recommending products and included links without affiliate fees.
They also started accepting article submissions from community members, which allowed early members — with great writing and home-cooking skills — to contribute to the website differently.
As a result, "we were able to give people a voice beyond participating in our recipe contests or in the comments section," Stubbs said.
100,000
At this point, Food52 had raised its seed round — a feat that's particularly impressive in 2010.
Never mind that the site had a sizeable audience; investors were not interested in media companies back then, the cofounders noted.
To make matters worse, Food52 was mostly a blog with no plans of becoming a media company, so it made for a tough sell. This explains why Stubbs thought raising $750,000 was "a long, hard road."
1 million
Around when readership reached one million in 2013, Hesser and Stubbs were ready to expand their business. "We felt that our content production had become a well-run operation, and this allowed us to experiment with some other areas we wanted to get into, like commerce," they said in an email.
To make sure the new plan was viable, the company had already started doing a trial run on a third-party platform in 2012.
The company tested products ranging from imported sardines to handcrafted ceramics — and everything sold out.
"The success of this pretty clunky commerce offering gave us the proof and the confidence we needed to raise a round of funding to build out our own native, fully integrated shop platform. Now, commerce represents 75% of our business," Hesser said.
10 million and beyond
With more than 10 million monthly visitors, community engagement and insight are some of Food52's most powerful resources. By 2018, the company launched its branded products, Five Two, after studying its members' comments.
Expand carefully
Having experienced "very scrappy" days, Hesser and Stubbs know the importance of growing a company carefully. Beyond abundant testing and research, here are their tips for effective expansion:
- Don't over-hire or recruit someone too senior for the job. Hesser and Stubbs "learned [this] the hard way." "In reality, no one person can transform your business on their own, and if they're not cut out for being in the weeds at least some of the time, they're probably not a fit in the early stages," they noted in an email.
- Don't follow trends just for the sake of it. At one point, the cofounders were seriously pressured to add videos onto the site. It was trendy, and everyone splurged on it, but they resisted. "We felt it wasn't yet clear how to monetize video, and we hadn't figured out how to do it efficiently," they said. Thankfully, the business partners waited. "This approach saved us a lot of money and angst."
- Think of your consumers first. Make your consumers the top priority. Each major business decision should prioritize the needs and preferences of your consumers. "If not, go back to the drawing board," they said. In Food52's case, the cofounders told First Round Review they got to know their users through personal engagement in the comments section and the site's hotline.
Consider the human factor
For a company that works hard at making informed decisions, one of the toughest challenges was dealing with personnel changes.
"We put a lot of thought into how we handle these difficult situations, but there's no playbook because you're dealing with people and everyone needs to be treated individually. Sometimes we get it right, sometimes we don't," Hesser said. "Once you get above 50 people, managing a team can become consuming and distract you from looking ahead."
The cofounders added that the human element is just as important internally as it is in the office. "Data is important, but so is gut. It's critical to find a balance between the two when building a consumer-facing business," Stubbs said.
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