The Food Network, the cable channel based in New York, is developing new initiatives to license its name on cooking-related merchandise and to market products through DRTV spots and show segments.
It tested its first DRTV spot this year with an offer for a cookbook by “The Two Fat Ladies,” celebrated chefs Jennifer Paterson and Clarisse Dickson Wright, who host the British cooking show by the same title. The network aired a 30-second DRTV spot for the cookbook for four weeks and observed a large spike in sales.
“That offer was extremely successful for us,” said Amy Rosen, the network's recently hired director of merchandising, who has worked for the Home Shopping Network, QVC and MGM/Universal. “We tripled our sales in the four weeks with the DRTV spot, vs. the six weeks without it.” She declined to release specific sales figures.
The network began selling exclusive videotape versions of the “Fat Ladies” programs on its Web site last month, but has not decided if it will market those tapes through a DRTV spot.
Rosen is now developing more TV-based offers that include everything from Food Network-branded T-shirts and caps to network-endorsed cookbooks and cooking devices.
“We are going to build up our Web site, and we're going to be priced competitively,” she said. “We're also working on licensing the Food Network name out to various brands, and that may be in the line of foods or housewares or things like that. We're just in the process of working out those plans.”
Cookbooks are the biggest area of merchandising efforts for the network, which is a title sponsor of a cooking festival in Philadelphia called “The Book and the Cook.” The annual event brings famous chefs to the city to prepare special meals and to promote their respective cookbooks.
The network also plans to market a cookbook in November based on its show “Taste,” hosted by gourmet food and wine critic David Rosengarten. The book, published by Random House, is expected to be priced at about $29 in soft cover and $45 in hard cover.
“There's also going to be a 'Best of the Food Network' cookbook that will feature several of our different chefs, as well as favorite recipes from the Food Network kitchen,” Rosen said. In addition, she said the network is in negotiations with several of its celebrity chefs to license or co-market cookbooks and other merchandise.
Not Another QVC
Although the Food Network wants to leverage its brand into various kinds of merchandise, it does not intend to become another shopping channel, such as QVC or the Home Shopping Network. More likely, its merchandising strategy would be similar to that of children's network Nickelodeon, which licenses its name to toy manufacturers.
“QVC's revenue stream is selling merchandise,” said Erica M. Gruen, president and CEO of the Food Network. “Our primary business is owning and operating a TV network, and programming a Web site. Right now, it is more lucrative for us to sell advertising than to sell merchandise.” She declined to disclose financial information about the network, which is majority-owned by E.W. Scripps Corp.; Tribune Broadcasting Co. and various cable operators own a minority interest.
QVC this year demonstrated its increased efforts to sell cooking-related devices with the launch in February of its “Local Flavors Tour,” in which the network travels throughout the country to televises shopping programming from restaurants, culinary schools and cooking conventions.
Meanwhile, HSN's most notable recent promotion in the culinary category was for a line of soups made by Al Yeganeh, the New York restaurateur who inspired the short-tempered “Soup Nazi” character on the NBC sitcom “Seinfeld.” HSN sold $60,000 of soup in 12 minutes, which set an HSN record in the category of gourmet foods. The offer included a soup variety pack of four 20-ounce soups.
While it is rare for QVC and HSN to sell products with a network brand, Rosen said the Food Network wants to leverage its brand recognition in licensing agreements.
“We're looking for retail presentation as well branding our name,” she said. “It really has to be something that we use on air and something that the Food Network and the chefs who use it can endorse. There are a lot of products you can offer the customer and for what the Food Network is–a leading source of information about cooking–we have an obligation to make sure what we're telling them is correct.”
Rosen said the network is considering the possibility of combining cooking shows and shopping segments for cooking products or gourmet foods that may be difficult to find in a particular viewer's region.
“We would potentially showcase an item within a program that we do and then potentially offer it for sale on air or through the Web site,” Rosen said. “For example, if 'The Two Fat Ladies' are using a special piece when they're cooking and they can only get it in London, we want to be able to offer that to our consumers so that they can use that appliance as well.”
One of Rosen's former responsibilities at the shopping networks was to market collectibles, a high-margin group for such networks. She is considering Food Network collectibles as a possible future offer.
Another possibility is to place Food Network-branded products in retail stores, as long as big advertisers would not object, much in the same way Martha Stewart licenses a line of products sold in Kmart stores. And while other cable programmers such as ESPN are opening “eatertainment” restaurants, the Food Network is not considering entering the restaurant business in the immediate future.
