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Publications International, Ltd. (PIL) has developed The Recipe Value Multiplier™, a proprietary, data-driven tool that recognizes the true value of recipe magazines to grocery retailers. PIL shows that a significant “hidden” value exists in recipe magazines sold in checkout pockets in grocery stores.
Employing data from a national supermarket chain, The Recipe Value Multiplier illustrates that while selling the high gross-margin recipe magazines (35 percent to 37 percent), each pocket sells an extra $1,457 in perimeter ingredient sales -- so every $1 of recipe magazine sales leads to $14 of perimeter sales.
“The Recipe Value Multiplier confirmed both the impact of recipes to the grocery trade and the value of the recipe magazines, which are sold primarily in grocery stores,” said Jerry Croft, PIL’s president of cooking and digital media “Now the trade can quantify and appreciate the greater business impact of recipe magazines and has a new tool to unlock further growth opportunities.”
After evaluating the model at the behest of PIL, Jeremy Fingerman, formerly of Campbell Soup Co. and the Manischewitz Co., said: “The Recipe Value Multiplier is conservative. Only perimeter items are included, and repeat use and word-of-mouth pass-alongs are not included. The model works by first identifying the grocery stores’ total recipe magazine sales and calculating the number of recipes prepared per year by the magazine buyers.”
“Proprietary research executed by PIL among PIL magazine buyers revealed that the purchaser uses an average of 6.53 recipes from each magazine,” noted Jeffrey Krulwich, a 25-plus-year year veteran of the publishing and consumer products industries who was also asked by PIL to validate the model’s findings. “With this information, a calculation of the number and value of perimeter ingredients is reached and valued against magazine sales. This creates the ‘value multiplier,’ a ratio demonstrating that for each dollar of recipe magazine sales, the yield of perimeter ingredient sales is $14.30. Thus, The Recipe Value Multiplier is 14x.”
“14x is a huge value for the grocery store, and non-recipe magazines and other front-end products do not deliver comparable returns,” added Fingerman. “While total magazine industry sales have dropped 3 percent, recipe magazine sales have grown 13 percent, and the trend is expected to not only continue but grow even faster.”
Chicago-based PIL creates, prints and distributes over 20 million books and 15 million magazines annually.