Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
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“This is a very focused market and if we can get to where people are looking on the Internet for serious cooking information, we will get them to remember the Digital Chef name,” Applebaum says. “Portal arrangements and supplying information to Food Central build up the brand.”
Applebaum started Digital Chef because he believed consumers wanted a one-stop Web store where they could easily look up and purchase exotic food products they couldn’t find in grocery or specialty stores.
No longer alone
Digital Chef was the first serious Web retailer to stake out the gourmet food category, but it no longer enjoys the luxury of being the market’s sole proprietor. In fact, the online gourmet food and kitchenwares business is heating up fast with several new competitors.
In September, Cooking.com, operated by a team of former Walt Disney interactive marketing executives, opened, while Rolling Pin Kitchen Emporium Inc., which operates 37 retail stores throughout the south, and Worldwide Kitchens, a division of Baltimore-based Maryland Equipment Co., are also coming online.
Applebaum is aware that other Web retailers have big ambitions for selling online to gourmet cooks, but he’s unfazed by the competition. Instead of standing pat, Applebaum is expanding Digital Chef to include kitchenwares and adding seasoned retailing executives to the management team. In January, Applebaum hired Sarah Esterling, former vice president of merchandising at Cooking.com, for a similar post at Digital Chef and named Bill Wallace, the culinary director of Draeger’s Market in San Francisco, as vice president of food.
Both positions are new and designed to capitalize on each executive’s long time knowledge of food retailing and sales. Esterling, for instance, developed and launched Williams Sonoma’s private label food and cookbook business, while Wallace developed the curriculum for Draeger’s Culinary Center, a well known California cooking school.
“We already have the content in place and now we are hiring retailing executives with the length and breadth of experience to really start to build up the site,” Applebaum says. “Mass merchandising doesn’t work in this niche. We had to get people on board who know how to specifically package and sell gourmet foods and kitchenwares.” Now that it has more capital and a bigger management team, Digital Chef is expanding into kitchenware.
Direct marketers such as Williams Sonoma and Chef’s Catalog have already proven that gourmet cooks are willing to shop at home for the culinary gadgets they want. But Applebaum believes the speed and convenience of Internet shopping will persuade shoppers to put away their catalogs and order online. And to entice them, Digital Chef now offers about 1,500 kitchenware products from such well-kown brand name manufacturers as Kitchen Aid, Braun, Black & Decker, Sunbeam, Oster, Toastmaster and others. “Complementing foods with kitchenwares makes us a more complete Web retailer,” Applebaum says. Adding cookware to Digital Chef’s product mix caps a busy two years for Applebaum.
And though he isn’t talking details yet, he’s still planning a major advertising campaign that will soon feature Digital Chef in leading gourmet food magazines and on serious TV and radio cooking shows. That upcoming campaign, plus other elements of Applebaum’s plan, impresses analysts and professional cooks with the comprehensiveness of Digital Chef’s overall corporate strategy and Web plan.
“Serious chefs want more immediate access to information and if they are on the Web looking up a specific recipe they are highly likely to pause and buy food or a tool to complete the process,” says Randy Carroll, president, The Chef In Your Kitchen, Weston, Conn. “Digital Chef has enough going on its site that makes me curious enough to want to stop and browse.” •