Too Big To Fail

Why Condé Nast had the wrong idea about Gourmet all along

FTR Side bar: Too Big To FailThe news that the November issue of Gourmet magazine would be the last in the storied publication's history hit a certain segment of the populace with a wallop. The loss seemed incomprehensible. To them, Condé Nast's squandering of 68 years of equity seemed, not to put too fine a point on it, incredibly shortsighted.

"The people who made that decision don't seem to know anything about magazines," says Michael Wilson, editor in chief of La Cucina Italiana, the American counterpart to an 80-year-old Italian title. "It's a shame." As editor of a magazine built on the brand equity of a prestigious name and a catalog of decades of recipes, Wilson knows whereof he speaks (Cucina's ad revenue is up 20 percent this year). "There are a million things they could have done to save Gourmet," he says.

Jonathan Gold, a cult-hero food writer who now writes a column for LA Weekly and was the first food critic to win a Pulitzer, served for years as New York restaurant critic for Gourmet. Upon hearing the news of its demise, he posted on Twitter: "Unbelievably sad about Gourmet - a heaviness to the day, as after the death of a friend."

"Being a food writer thrust into the world of Gourmet felt very much like it had when I was a young music writer who suddenly found himself writing for Rolling Stone," he tells MEDIA. "Other food magazines and food sections may have done certain things in a cleverer or flashier way, but Gourmet was the rock."

Ironically, a few days after Condé Nast announced Gourmet's closure in October, the MPA released data indicating the food category was showing signs of life, well in advance of other categories. Overall, magazine ad pages dropped 26.6 percent in the third quarter of 2009 compared with 2008, but the food category stood out as the only vertical to show improvement, with a gain in ad pages of 3.9 percent over the third quarter last year. And while it's still down 10.8 percent for the year through September, the lift, in time for fat holiday issues, is promising. Though, sadly, too late for Gourmet.

And while Gourmet was down in ad pages 44.4 percent this year compared to last, it might have been beginning its long climb out of the hole - falling 39.7 percent in the fourth quarter, compared with 46.1 percent in the third. While those are hardly the type of figures that make the efficiency experts at McKinsey hang up their blazers and roll up their shirt sleeves, it at least shows that the magazine might have survived had measures besides closure been taken.

But, as far as McKinsey was concerned, this had to be a horse race between LA-based Bon Appétit and Gourmet. And besides the fact that Bon Appétit's slide was less steep than Gourmet's, so was its price tag. One longtime editor marveled at the expenditures Gourmet ran up producing each issue. The costs could have been reigned in says the editor and the million-reader audience honed, to create a smaller, leaner, but no less special Gourmet.

But when it comes down to it, many assume that Gourmet's actual value to Condé went far beyond its circulation base. "There are rock n' roll bands whose music you enjoy, and there are bands whose logo you are tempted to tattoo onto your skin," says Jonathan Gold. "The people who loved Gourmet were passionate about Gourmet. It represented something real and important in the culture: cuisines to master, goods to taste, a world to see. When Gourmet, for example, ran a recipe calling for chicken stock, it ran a little sub-recipe in the back of the magazine, even though we knew that most of the readers would probably reach for a can opener instead. Bon Ap just calls for the can."

In the end, McKinsey and the powers that be at Condé may have just been can opener sort of guys.

FTR Side bar-Too
Big To FailJohn Gerzema, chief insights officer at Young & Rubicam, suggests that Gourmet had strong value to Condé Nast in terms of its category leadership and consumer affinity. His research shows, "Gourmet was considered the highest in quality, prestige, intelligence, and trendiness. It was also considered the most upscale, commanding the strongest pricing power. Compared to Bon Appétit and Food & Wine, Gourmet was 36 percent more differentiated and 52 percent more esteemed."

It might be that the bureaucratic infrastructure of Condé Nast forced it, once the decision was made to retain McKinsey, to act on any recommendation the firm made. Rather than try to fix the problems of a fledgling flagship, the far easier task, when faced with two similar magazines during a recession, was to cut the one that was way more expensive and had lower readership and a higher ad rate that depended on luxury ad spending.

Condé Nast had a passion brand on its hands. A very large passion brand (though not as big as they thought), but a passion brand nonetheless. Condé kept inflating the circulation, such that the magazine's core readership and core value to advertisers became diluted. Instead of deeply discounting subscriptions in the hopes of gaining extra advertising, it's possible Condé could have tapped a passionate readership who likely would have paid much more for it, if given the choice.

Gourmet editor-in-chief Ruth Reichl told the Los Angeles Times the day after the closure news hit the wires that she had no idea it was coming. A few months earlier, though, she pondered the seeming contradiction of growing circulation and shrinking ad pages. "It's ironic because our circulation has never been higher. And yet advertising dollars are a challenge," she told KPCC-FM. Food publishing is a niche category, and while the Martha Stewarts of the world can reach mass audiences, not every print product can, or should even try. Condé squandered Gourmet's value as an editorial product and as a vehicle for ads.

Research conducted by Insight Express on behalf of MEDIA also found that there is something of a halo effect - many readers value a title even if they are not regular readers or subscribers. In the survey, National Geographic turned out to be the title that the most people said they would miss. Of those who said they would have a reaction to NatGeo closing, 27 percent who were not readers of the title said they'd miss it if it were gone.

Gourmet will live on in cookbooks (ironically its most recent was released this fall) and with its recipes online at Epicurious. And while online food coverage has exploded in recent years, it is as different from high-quality magazines as grabbing a taco from a truck is from dining at Le Bernadin. "I like print. It is uniquely well-suited to food, which is a purely physical medium," says Gold. "I don't see an online model supporting something like Gourmet's superb and expensive test kitchen, which polished recipes to a shine. Online food coverage has its place too - it is now possible, for example, to find formulas for Bangalore-style curries from publications based in Bangalore."

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