Publishers Dig Into New Revenue Through Dining Experiences
Why Garden & Gun, Time Out Group and Vice are placing big bets on culinary brand extensions.
For non-epicurean publications, opening a long-term, food-based brand extension might seem a bit unusual. Even for epicureans, a 38,000 square-foot food hall represents a daunting investment.
But when presented with the opportunity to create new lines of business by expanding their brands into real-world dining experiences, Garden & Gun, Time Out Group and Vice Media went all-in creating a restaurant, a cultural market and a food hall, respectively.
So far, the Garden & Gun Club, which opened its doors in April 2018, and the Time Out Market in Lisbon, which launched in 2014 and is soon to be followed by five more locations this year, have been successful in terms of driving revenue for their respective brands, and serving as another, deeper touchpoint for audience engagement.
Based on partner interest already, John Martin, publisher of Vice Media’s Munchies vertical, expects that the Munchies Food Hall, set to open in April of this year, will not only serve as a strong revenue stream, but it will put the Munchies brand in front of millions more eyeballs than they currently experience.
The Munchies Food Hall will exist within the American Dream mall—whose long-awaited opening in New Jersey’s Meadowlands Sports Complex is scheduled for April—and will serve as the retail center’s high-end dining option.
“When we launched Munchies and we were putting the business plan together—this was back in 2013—we sort of outlined the grand vision for the brand,” says Martin. “We were looking at all of the things we could do and food halls were on there as something that we wanted to do.”
Since that point, Martin and his team tested out the idea of opening Munchies Food Halls around the world, and even says that they got pretty far along in the processes within European markets. It was when they were presented the opportunity to partner with the new shopping and entertainment complex in New Jersey, that the plan for first physical brand extension of this size really took off.
“To be perfectly candid, I was skeptical at first. I said, ‘Isn’t that the mall that’s never going to be opened?’” But after Martin went and looked at the New Jersey location, as well as the other properties that the mall developer company Triple Five Group has, including the Mall of America in Minnesota, he realized that this facility would far surpass the malls he remembered from his childhood. “It’s an entertainment complex more than anything. It’s a spot where people go to do fun things and that makes sense for our brand.”
Rebecca Wesson Darwin, president and CEO of Garden & Gun, was also initially skeptical about entering into a permanent culinary brand extension, primarily due to the financial risks that come with operating a restaurant.
For Garden & Gun, the restaurant model was not a new idea. “There was a Garden & Gun Club in Charleston in the late ‘70s and early ‘80s—very different from what we created now—but it was much more of a disco bar kind of place,” says Darwin. “But that idea of a Garden & Gun Club has always kind of been in our heads and when given the opportunity for a real manifestation of it, it seemed to make sense.”
That opportunity came when the president of the Atlanta Braves organization came to Darwin with a proposition that the magazine open a restaurant adjacent to SunTrust Park, the new stadium outside Atlanta that opened in 2014.
“I did say no a couple of times and then they wouldn’t let me say no,” says Darwin, but ultimately, the promise of the other chefs who were opening spaces in the park that both she and the magazine trusted made her decide that SunTrust was also a good setting for the new Garden & Gun Club, which opened its doors in April 2018.
Though Garden & Gun is not exclusively an epicurean publication, Darwin says that food is a staple of Southern culture—which is at the core of the magazine—so therefore, it has become a pillar within the magazine’s content as well. She says that both the food-related e-newsletter, The Skillet, and the October/November issue, also known as The Southern Food Issue, have always been hugely popular among readers, so food “felt like a space that we knew a lot about that we could do something meaningful in.”
Similarly for the Time Out Group, the first Time Out Market was actually a result of the mayor of Lisbon proposing the idea of a cultural event space in the center of the city in 2012. The Time Out Portugal team, who at the time was print-only and didn’t have a digital presence yet, came up with the idea to have the best of the city—from food to art to events—under one roof. Two years later, the first permanent, physical extension of Time Out was opened.
While Time Out is also not solely focused on food, Julio Bruno, CEO of Time Out Group Plc, explains that the crux of the brand is to help people experience cities better, which it now does in 315 cities across 58 countries. And he says the brand does this by taking a hyperlocal approach and highlighting events and experiences in the city and showcasing and critiquing the best food that the city has to offer.
About a year later, when Bruno joined the company as CEO, he saw the value that the market was bringing to the brand by creating a physical experiential extension of its editorial offerings, and from there strategized how to grow the division.
Now, five additional markets are set to be opened this year alone—Miami, New York, Boston, Chicago and Montreal, in that order—with a continued plan to open two or three locations every year going forward—such as London and Prague in 2021.
“We’ve been running it for four years already and we have learned and honed all of the things that we’ve learned in Lisbon that we are planting into our markets in the USA,” says Bruno. “It’s a very important part of the evolution of the brand. Time Out is about showing you the best of the city and now, not only do we show you the best of the city, we are part of the best experiences of the city.”
Bruno says that the initial plan was to open the second market in London, the birthplace of Time Out, which launched in 1968, but due to permit hang ups, his team explored other locations in which the Time Out brand had a strong presence, such as New York and Chicago where there have been media teams based for 23 years.
From publisher to restauranteur
In order to get the actual brand extensions up and running, the publishers explained that an investment in talent needed to be made, since, “most of us grew up in the magazine business, we aren’t restaurateurs necessarily,” said Darwin.
For G&G, it was a team effort across all of its departments to work on launching the space, but she says they hired an architectural firm and worked with several of the editorial staff’s favorite designers, artisans and furniture makers to get the space looking like the modern, yet traditionally Southern club they envisioned.
Beyond the physical space, Darwin’s team also relied on the help of James Beard Award-winning chef and friend of the magazine Mike Lata to create the menu, though she says they chose to not have a named and known head chef, “because as a magazine that covers so many of these chefs, we felt it would be a bit of a challenge to get in bed with one particular chef.”
That is not the case for Time Out’s strategy of selecting the chefs and restaurateurs for their Market. It went with an invite-only approach.
“They have to be in the city, they have to have been reviewed by Time Out already and they have to have five stars,” Bruno tells Folio:, emphasizing the high-end dining experience he wants the Market to offer. “We choose the best chefs through editorial curation—by professional journalists and food critics that Time Out is known for.”
And while the chefs, events and installations are mainly curated by the editorial team, Bruno has been hiring talent with hospitality and restaurant backgrounds for the Markets division, starting with his hire of Didier Souillat as the CEO of Time Out Market in 2016.
At Munchies, Martin says that to date, his team has been able to keep the majority of the planning in-house, relying on the teams at Vice who have years of expertise in creating sponsorship activations, spatial design and content to create the experience.
“The first thing is the curation process and the skills there are being incredibly opinionated, which we have in spades,” Martin says.
These opinions came in handy when selecting which types of vendors the editorial team wanted in the space. He says that the team selected 10 to 15 categories of must-have foods, then created a “hit list” of favorite chefs within those categories. After that, the team focused on unexpected additions.
“More than anything, we want strong operators because it’s a high volume of experience. This facility is going to get 40 million visitors a year and that’s not bullshit,” explains Martin. “That’s based on the comps of their other facilities so it’s a very high-volume environment so the operators need to be prepared for that and have the operational abilities to support that.”
Beyond editorial planning and curation, however, he continues that the design team, who is led by Adam Mignanelli, the VP of design, North America at Vice, has also been very valuable to the planning process.
“The footprint and space was created by American Dream,” says Mignanelli, but continues that his team stays “in lock-step” with the developers in order to create an Instagram-able and interactive 38,000 square-foot representation of the Munchies brand. “Internet and social video needed to be present in the space to showcase our content, as well as huge photography that injects fun and excitement as you wind through the space. Simply put, I personally wanted visitors to walk into the food hall and feel engulfed in a heaven of appetite-driven bliss through visuals and the food itself.”
“How do we make money on this?”
For the Garden & Gun Club, the revenue is strictly consumer-based at the moment, whether that is from individual diners, private events or people purchasing items in its gift shop section. And as revenue-driver for the overall G&G brand, Darwin says “It would be fabulous if it turned out to be a huge revenue source for us, but still advertising in print and digital and circulation are still our biggest sources of revenue.”
The real value of the physical restaurant space for Darwin is the ability to drive deeper engagements with the G&G readers, who want more from the brand beyond the six issues they receive a year.
“Yes, we definitely want it to be profitable, but it’s definitely not the main reason for doing this,” she says. “I have always believed in really doing things that the reader wants you to do. It’s important for us to do other extensions of the brand and be in more places.”
As for Time Out Market, Bruno explains that the revenue model for the Lisbon and the future U.S. and UK locations is that Time Out covers the cost of both the front and back office, including lease, marketing, cutlery and china, cleaning and getting people in the doors, and then they take 30 percent of the revenue that the chefs earn.
“The 30 percent is how we pay for everything and how we get our profit as well,” explains Bruno. “And then the Time Out Bars are run by our own personnel, our own bartenders,” of which they keep 100 percent of the profits.
And 30 percent is no small number. In 2017, Bruno reports that 3.6 million people came to the Time Out Lisbon location and in 2018 that number grew.
“This year, the analysts suspect at least 40 percent of our revenue will come from the actual markets, six of them this year—one in Lisbon, four in the USA and one in Montreal, Canada. So the revenue there has always been very important because this is a rapid growth element,” he says.
High foot traffic numbers to the Lisbon location is what inspired the future Montreal and Prague locations, two cities that Time Out didn’t even have a presence in until the plans for the Markets came about.
“In Montreal, they came to us looking for an eat-in center, because they wanted to have the Time Out brand there. This also happened in Prague,” says Bruno. “The Strength of the brand and the quality that the brand promises—that is why they wanted us there. It’s further validation to what Time Out is because those two cities came looking for us.”
In these locations, instead of Time Out paying for the lease and all of the operation costs, the landlord will cover the overhead and earns a cut of the profits. Time Out is still responsible for designing the space, selecting the talent and operating the market, but it is promised a minimum profits share each year, with the possibility of earning more based on earnings.
The Munchies Food Hall will also have several food vendors within the space, but unlike Time Out Market’s relationship with its chefs and restaurateurs, they sign leases directly with American Dream. Munchies does recommend who these vendors are, but otherwise Martin says they don’t serve as a broker or a middleman for them.
However, Munchies’ success does rely on the vendors’ success.
The first thing Martin thought when going forward with the plans to create a food hall was, “How do we make money on this?” And to earn a profit, Munchies entered into a partnership with American Dream where it is promised a minimum profit share, but is also incentivized to earn more by how well the food hall performs. So to get more traffic in the door, Munchies is tasked with creating strong marketing campaigns for their food hall, which is a big part of the brand.
“We have a marketing commitment and that is of the reasons that they partnered with us is because we have a huge digital megaphone and we can draw a lot of eyeballs to this.”
Once the operation-side of it is set, Martin says that his team can then get creative with how else they can monetize the space, such as retailing branded merchandise, ticketed cooking classes and partnership activations, which will drive revenue to both the brand and the vendor partners.
Capitalizing on partner interest
Another revenue source that both Munchies and Time Out can expect is from their sponsorship integrations and partnership activations.
“We have so many in Lisbon that I couldn’t even begin to tell you,” says Bruno, pointing to everything from the brand of coffee makers they use to the products used in the cooking academy to the sponsored concerts.
Munchies’ sponsorship plan so far focuses on partner brand activations and has been working with American Dream to extend sponsor activations beyond the food hall and into the other activities that the mall has to offer. For example, Martin says that he expects being positioned at the base of the indoor ski hill, a feature in the new shopping and entertainment center, will provide partners with activation opportunities, such as an “après-ski” at the food hall.
For Garden & Gun, this source of revenue is not yet a part of the Club’s business model, but Darwin expects that it is something the team will consider in the future.
“We have always had a really strong program of doing integrated marketing partnerships and we certainly will think about using the Club as a place to not only entertain our clients but put our advertisers in touch with our clients,” says Darwin. “As we move forward with it, I expect that we’ll do more and more of that. It’s not sponsored and we’re not getting money from advertisers.”
The value of engagement
At the end of the day, these brand extensions are working to drive audience engagement, whether that is through developing deeper relationships with existing readers or drawing new ones to their media platforms.
Darwin mainly sees the Garden & Gun Club as a way to provide loyal readers with another platform to interact with the brand. “I would say we put more value on deepening the engagement, but of course we’re always looking for new people.”
However, Bruno expects that with the mass of people that will experience the Time Out Market, reaching new audiences is inevitable.
“You can imagine that when you have 10,000 people a day, more or less, a lot of those people are just experiencing the Time Out brand for the first time,” says Bruno. “And then there are some older clients of the brand who have forgotten, but now they see the brand in this format and they are re-engaged with the brand. This is another example of the the virtual circle between the Time Out Market and the Time Out media-side.”
To get those visitors to the media side of the brand, he says that in order to access the free wifi at the market, users have to give them their emails and go to the Time Out website, where they can find behind-the-scenes content around the Market’s chefs.
Martin also is playing to new audiences through the location of the food hall. He says that when he was asked why the first Munchies Food Hall wasn’t placed in a neighborhood like Williamsburg or Bushwick, he explained that those audiences already know what the Munchies brand is.
“I want to grow our brand and make a huge tent food brand. I don’t want to preach to the choir, necessarily, all the time,” he says. “There are 40 million people who are going to come here every year, and not that many people know Munchies, so it’s a great opportunity for us. We deliver to our core Vice audience and then we benefit from our mainstream audience.”