With Recipes, the Key to Making Millions Is Not About the Food
(Bloomberg) -- In 2017, the team from Sir Kensington’s made an estimated $140 million for their ketchup recipe when they sold it to Unilever.
The same year, Nathan Myhrvold, a technology expert-turned-experimental chef, released the five-volume Modernist Bread (Cooking Lab, $560), co-authored by Francisco Migoya. It’s Myhrvold’s latest juggernaut; he co-authored the best-selling Modernist Cuisine: The Art and Science of Cooking (Cooking Lab, $625) in 2011. Before that, he was the chief technology officer at Microsoft.
That was a good year for big-ticket food projects. But it came when recipes are being continually devalued as they flood the internet, free of charge. Social media has made it ever easier for people to copy the dishes of others. It makes me wonder: How can someone monetize a recipe?
Myhrvold, who is starting work on his next opus, Modernist Pizza, has strong feelings about recipe ownership and the money it represents. If music and poetry can be copyrighted and monetized, he thinks singular recipes should be, too.
“There is certainly a comparison between recipes and computer code,” he tells me over the phone. “A recipe for a distinctive product is like code, which is protected by copyright.”
There’s one problem: In the U.S., most recipes aren’t legally protected by copyright. That’s because they essentially contain only ingredient names and proportions.
“Copyright law does not protect merely utilitarian articles, ideas, facts, or formulas. Since food is a useful article, copyright law will apply only if the food incorporates highly creative features that are separable (either physically or conceptually) from the food’s utilitarian features,” says Natasha Reed, copyright expert at New York’s Foley Hoag LLP law firm, at Fine Dining Lovers.
Abroad, it’s generally not much different: “Such an instruction is neither original nor individual and does not qualify as a work of art,” explains Martin Berger of the Swedish Patent and Registration Office.
So is there a case for the monetizing of recipes? Myhrvold draws analogies from his former technology job—and decries the blatant plagiarizing of dishes.
Recipes as Computer Code
Myhrvold tells the story of putting fonts into the Windows program when he was at Microsoft decades ago.
“There are thousands of different font designs. They are a collection of numbers that plot the design. According to a court ruling, they’re not protected, though the font names are,” says Myhrvold. “The coordinates of the points, which you’d put into a computer program like proportions in a recipe, are not protected. It’s messed up, but it’s the law.”
Similarly, consider the Cronut. The technique and recipe for frying up a donut with croissant-like layers aren’t protected, but pastry chef Dominique Ansel did trademark the name and has aggressively pursued knockoffs. Pepperidge Farm took Trader Joe’s to court over alleged infringement of its Milano cookies. And Magnolia Bakery, famous for its cupcakes, was able to trademark the jaunty swirl of its frosting.
Trademarks, though, are about protecting a brand, not actively bringing in money (unless you consider litigation and damages an active revenue source). Myhrvold points to patents as a potential way to monetize a recipe—although, for most chefs, that’s impractical. Patenting a recipe costs thousands of dollars, and it must qualify as unique and useful. For example, tofu has a lot of patents because the process of coagulating it is unusual. There are also many yogurt patents. “If you’re Chobani, you want to protect your formulations,” he says.
“If I say, ‘I’m going to patent my carrot cake recipe, and it’s special because I add mace and red pepper,’ it’s unlikely to get that patent,” says Myhrvold. “It’s in the realm of what cooks do. But a novel chemical compound that no one’s used before, or in this way—you could get a patent.”
In other words, chefs are powerless when it comes to protecting their creations, says Myhrvold.
He points to a case a dozen years back, when an Australian cook worked around the world in top kitchens. He then opened a restaurant in Melbourne, where he served exact replicas of such dishes as Wylie Dufresne’s “shrimp noodles.” The food world erupted, but there was no legal recourse: The dishes weren’t copyrighted.
As Exhibit A for what happens when you can’t copyright recipes, Myhrvold cites Jean-Georges Vongerichten’s legendary molten chocolate cake, first made in 1986 by accident and now served around the world. (While making individual chocolate cakes for a party of 500, Vongerichten neglected to check the oven settings. He thought the mistake had ruined his restaurant; instead he got a standing ovation.)
“Jean-Georges’s recipe dominated because it redefined chocolate cakes, and all you have to do is under-bake it. If he had [been able to copyright] that recipe, and got a nickel for every 100 of those served, he would own all the buildings where his restaurants are,” says Myhrvold.
The key to raking in millions on a recipe, I come to realize, is that it’s invariably not about the recipe.
“From the beginning, we password-protected our original recipes in text files,” says Sir Kensington’s Scott Norton, who started making ketchup with Mark Ramadan as a college project. “We absolutely saw them as our own, original work.”
Still, he admits, “Had we not started the company and proved the value in them, no one would have come along, looked at the recipes alone, and seen them as anything of tremendous value without traction in the market. Sir Kensington’s team and reputation has brought us to where we are far more than our ever-evolving recipes have.”
“A street hawker recipe is dependent on the reputation it comes with, not just the sauce and techniques,” says KF Seetoh, an Asian-food tour expert who has taken Anthony Bourdain through Singapore’s markets. “Although many look simple, there are many little touches an iconic hawker puts in their dishes that more than meets the eye. It’s techniques, not just recipes, like mass production methodology in a tiny kitchen.”
Seetoh estimates that hawkers recipes can command from $250,000 to many millions, provided they can carry the popular luster to whomever might buy it. The most expensive hawker recipe known today in Singapore is Kay Lee Roast Meats, whose honey pork and roast duck recipes sold for more than $5 million. “A few hundred portions a day at a humble $4 to $6 price, in a low-rent space with minimum manpower, is very sexy for investors,” Seetoh says.
©2018 Bloomberg L.P.