FreshDirect Recipes - this could be big

A couple of years ago I had an idea relating to the way we purchase groceries. I thought maybe someday I'll get around to doing it, if no one does before me.

But this week I noticed that FreshDirect have launched a service that's the beginning of what I had in mind. Now that this cat is out of the bag I thought I'd share my full idea with the world here. If this plays out, I think FreshDirect could be onto something big big big[1].

The idea in a nutshell is this:
Most groceries we buy are intended for cooking. Cooking is driven by recipes. The question is - Why is grocery shopping so detached from recipes then?

My idea was: Use recipes as the shopping lists of the future. Let the shoppers decide on a menu, and ship the exact ingredients needed to fulfill that menu. There's so much inefficiency in the process today where the shopper/cooker has to translate the menu to recipes and then to shopping lists, and then to actual buying decisions. Surely a more streamlined and automated process for grocery shopping would be a winner in this space.

If you're scratching your head un-impressed, keep reading... this is where this gets  really interesting:

I think that recipe-driven shopping might be one of the biggest potential cross-promotional opportunities in history.  

Think about this scenario:

• FreshDirect (or whoever may emerge) offers national recipe-driven shopping to shoppers.
• They open an interface for anyone to register recipes with them. Enter your recipe and you get a unique 'Recipe ID'.
• Any time someone buys via your recipe, you get a small cut of the profits.
• FreshDirect also provides you with a unique 'Recipe ID Badge' that you can print next to each recipe. I made one up below (don't try the URL...;-):

Now play this through. Did the light bulb go off??

Recipes has to be one of the most frequently published items in print today. The cookbook shelf at B&N is one of the biggest, and there are hundreds of magazines dedicated to cooking (whether entirely or partially). Not to mention TV shows, websites, etc. However, with the print advertising market declining, this is a slow/no-growth market. 

But what cooking publishers have failed to see is that they own a treasure trove of completely untapped ad media right under their noses - the recipes themselves. It's one of those rare occasions where readers actively consume content with a clear intent of making a related purchase. It's the level of user intent you get when people "read" the yellow pages or use Google. In other words - a perfect advertising media.

Once this is realized (and FreshDirect seem well on their way to do so), a perfect cross-promotion platform is created. Every recipe published in books, magazines, TV, the web, heck - even in restaurants[2], becomes a small revenue generator for its publisher. In return, the whole cooking publishing industry becomes one huge sales funnel into FreshDirect. And unlike some other cross-promotion marketing schemes, this is one where the user is actually benefiting because it perfectly aligns with his initial intent - to purchase the ingredients for the recipes he's looking to cook.

Think about it - A magazine that cover-to-cover is 100% "ad" space, without alienating readers a single bit (on the contrary).

If I were an investor, I would not touch traditional publishing companies with a stick these days. But in the cooking niche there might be a very very bright future. And if publishers understand this, the future of FreshDirect (or whoever emerges as this platform[3]) will be even brighter.

[1] BTW - it's pretty amusing to me that every stupid 'social calendaring tagging video web 2.0 mashup' developed by two college dropouts gets ridiculous amount of publicity in the blogosphere driven by TechCrunch & Co., while real businesses like this get totally ignored... ;-)

[2] How cool would this be? - Restaurants have little incentive to publish their recipes. That's their livelihood, so why give the secrets away? But this dynamic completely changes if a restaurant could make 25-50c each time someone prepares one of their recipes at home. It's a 0 cost transaction and it gives the restaurant potential scale they couldn't have dreamed about achieving in their physical location.

[3] While FreshDirect is the first player to make an entry into this space, it is not necessarily the winner. The key to winning this space is offering grocery shipments nation-wide, and FreshDirect seems far from having the infrastructure to do so at this point.
The importance of the 'national' piece is extremely significant - Publishers of national magazines (ditto TV shows, books, etc) will not start referencing a recipe shopping destination that cannot ship to 95% of the readers, because doing that would alienate most of the readers. So this game is far from over, and I'm sure an arms race will soon start.

Comments

[Ouriel Ohayon]

Come on Yaron, don't make it simple. you can also find in the crowd real great businesses in TechCrunch...

[Yaron Galai]

Absolutely - TechCrunch is one of my favorite blogs, and certainly a lot of good companies covered there. But it seems like there's a strong preference for new ajaxy-socially-mashupy startups over some innovation done by companies like FreshDirect.

[Javy]

Whenever you get your groceries from freshdirect encourage the delivery guy to vote for the union, this corp. exploit its workers, they a funny health ins. and they make only $8.00 hour; FD use this people for a year and then fire them so FD do not have to increase their salaries FD is an awful company.