Wonder, the always-evolving restaurant/delivery/meal kit conglomerate founded by Marc Lore, is now selling ads.
That is the key takeaway from last week’s news that Wonder had acquired Tastemade, a media company known for cooking videos and food-focused streaming series. The price was around $90 million, according to the Wall Street Journal.
With the deal, Wonder gets access to the more than 173 million people who follow Tastemade on social media or watch its shows every month. More to the point, it gets Tastemade’s advertising business, which sells that audience to companies like Coca-Cola, Starbucks and Kraft.
That includes Tastemade’s in-house production studio, which allows for unique advertising options. A recent episode of Tastemade’s popular scaled-down cooking show, Tiny Kitchen, featured miniature Coke bottles. Another takes place in a pint-sized Starbucks. Both were paid for by the respective brands.
By buying Tastemade, Wonder sees an opportunity to extend those campaigns downstream, into its restaurants as well as its Blue Apron meal kits (acquired in 2023) and the Grubhub food delivery app (acquired earlier this year).
For example, an advertiser might buy units in a Tastemade series, a product placement in a Blue Apron meal kit or on a Wonder restaurant menu, and a sponsored listing on Grubhub, reaching consumers at different points in their buying journey. Wonder, of course, generates revenue along the way.
The strategy takes some cues from the retail media network model that has taken hold in the online retail world. Companies like Walmart, Target and Amazon now operate their own digital advertising businesses, allowing brands to pay for premium placement on their apps and websites. Third-party delivery apps such as DoorDash, Uber Eats and Grubhub have followed in their footsteps.
By all accounts, these ad businesses are fast-growing and profitable. In 2022, media investment firm GroupM predicted that retail media advertising would increase by about 60% by 2027, to $160 billion. Amazon’s ad business alone accounts for about $50 billion in annual revenue and counting.
What Wonder believes it can add to that formula is the ability for advertisers to tie their online ad campaigns into the real world through Wonder’s restaurants or meal kits. This sort of end-to-end experience is where the ad business is heading, said Wonder’s chief growth and marketing officer, Daniel Shlossman, who now oversees the Tastemade business.
“[Advertisers] want to be able to connect with customers across the digital and physical,” he said. “It used to be physical. Then things moved much more digital. And I'd say we're coming back to having … more of that 360-degree opportunity encompassing both of those.”
Wonder believes Tastemade’s production chops will only add to its pitch to advertisers, who will be able to buy high-quality custom-made videos highlighting their products. Wonder may also avail itself of those production capabilities to create content around its own restaurant brands and the chefs behind them.
“I think everything’s on the table,” Shlossman said. “From a production and content perspective, there are areas where I'd say Tastemade does things that we don't currently do internally.”
The acquisition is the latest and perhaps biggest sign of Wonder’s lofty ambitions. It has already said it wants to become a “super app for mealtime,” and adding Blue Apron and Grubhub were clear steps toward that goal. But it also wants to turn all of those customers and their data into an audience for advertisers, which adds a new layer of revenue to its ledger and charts a potential path to profitability.
Fueled by $1.6 billion in funding and the uncompromising vision of Lore, Wonder in just a few years has laid the foundation for a large, modern ecommerce business in the vein of an Amazon or Walmart. Now comes the hard part: integrating all of these moving parts into a coherent whole.
And even if it can do that, Wonder will still need to accomplish the more basic but no less complicated work of getting customers in the door (or the app) amid an uncertain and highly competitive consumer environment.
It’s currently in the midst of opening about one new Wonder storefront a week en route to a total of 90 locations by the end of this year, all in the Northeast. The stores, which produce food from up to 30 different restaurant brands, are doing well so far, Shlossman said.
“We continue to see really positive numbers and really great customer satisfaction across a lot of these different cross sections,” he said. “So it gives us a lot of confidence as we continue this pace and really accelerate the pace that we're on.”