Monday, July 22, 2024

Why Instant Pot Owner Pyrex Filed for Bankruptcy


When the Carmel Pratt slow cooker broke down in late 2019, she decided the Instant Pot would be the best value for her time and money. “I replaced like three appliances with this thing,” the 30-year-old said of the multicooker.

Years later, Pratt, a building consultant in Congress, New York, uses the same instant pot once or twice a week. It does not plan to upgrade to a newer version.

“I don’t feel the need to spend any more money,” she said. “The type I already own works great, and I don’t know where it would land if I threw it away and bought a new one.”

It’s a scenario like this that helps explain why Instant Brands, the parent company to Instant Pot, Pyrex, CorningWare, and other popular brands, went from selling the best countertop appliances on the market just a few years ago to filing for Chapter 11 bankruptcy this week. Industry experts have seen this before, and it’s a perennial puzzle for brands like this — durability can ultimately be their biggest enemy.

“Customers don’t buy in multiples,” said Mark Cohen, director of retail studies at Columbia Business School. “Having a consumer company trading primarily on a limited assortment that hasn’t been updated, outdated and not expanded is a death trap.”

The Instant Pot maker declares bankruptcy amid declining sales

After years of hot sales in the 2010s and a wave of demand early in the pandemic, the multicooker market is saturated, said Michael Wolf, founder of the Smart Kitchen Summit food technology conference and editor of the industry publication. the spoon. According to market research firm Circana, sales of multicookers fell 50 percent last year of 2021. For the 12 months ending in April 2023, sales of multicookers declined 20 percent compared to the previous 12-month period, according to Circana data.

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“I think consumer cookers, especially countertop ones, are often a difficult business because margins are so low,” Wolf said. “And at least in the United States, Americans are pretty cheap when it comes to buying new countertops.”

in statementInstant Brands CEO Ben Jadbo said the company continues to “address additional global macroeconomic and geopolitical challenges that have impacted our business,” and has secured $132.5 million in financing to continue operations.

In Tuesday’s filing, the company said the Chapter 11 protections would give it “time and flexibility” to create a plan to boost Instant Brands’ finances.

The Instant Pot, founded in 2009, became increasingly popular during the mid-2010s, when Americans’ interest in multicookers increased. It was the best-selling item on Amazon Prime Day in 2016, with 215,000 orders. Male online retailerand remained one of the top gadgets at the annual event in 2017 and 2018. The Instant Pot was acquired by private equity firm Cornell Capital in 2019 and merged with kitchenware company Corelle Brands, which included Old brands Pyrex and CorningWare.

There have been Facebook groups, cookbooks, YouTube channels, and blogs all dedicated to the multifunctional pressure cooker. The company has been sending out Instant Pots to influencers and bloggers who have written about how the device can make cooking easier and more efficient.

“It was just a stroke of marketing genius,” said Lisa McManus, executive editor of America’s Test Kitchen magazine. “They’ve made pressure cooking cool again—or maybe for the first time.”

She added that the product that used to intimidate amateur chefs is now available.

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According to circana. Unable to eat or hesitant to order, many Americans have had to get creative when it comes to food preparation. Instant pot made it easy.

Ellie Lightner, who collaborated on her home in Milwaukee in 2020, said her favorite food and mom bloggers were constantly posting recipes for the Instant Pot.

“I was like, ‘Oh my God, I can’t make white bean chili without an Instant Pot!'” said the 30-year-old psychiatrist. “So I had to get it.”

But Leitner, who bought the Instant Pot during the Black Friday sale that year, estimates that she used the pot twice. Now, she’s gathering dust under a stack of boxes in her basement. “Yeah, I think I regret buying it,” she said.

Instant brands, similar to Peloton, Cohen said he fell victim to post-pandemic trends.

After an initial surge in demand, “the bottom hit,” Cohen said. “And they’re most likely suffering from massive inventory that they’ve pushed into the channels that back their products, which have stopped selling.”

He added that Instant Brand’s other lines, like Pyrex, are harder to scale. Pyrex products are durable and decades-old. Unlike others in this category such as KitchenAid and Le Creuset, Cohen said Pyrex does not release new colors for its product nor is it viewed as a kitchen accessory.

Instant Brands has tried to expand its product line. Noted, McManus launched an air fryer—the Instant Vortex—which the American Test Kitchen named after it The best choice of this year. It also manufactured coffee machines, stand mixers, air purifiers, and an indoor grill. But they didn’t have the market reaction like the Instant Pot.

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“It’s hard to come up with something new that people will jump on,” McManus said, and a “twice lightning bolt” moment is rare.

It’s unclear what will happen to Instant Pot, Pyrex, and CorningWare. There is a possibility, Cohen said, that the company could find its financial footing through the bankruptcy process, successfully reorganize and get rid of most of its liabilities as the creditor becomes a new equity partner, giving the company a “new lease for life.”

But, he added, this is “the end of Hollywood.” Cohen said these companies often fail their restructuring plan, take on more debt, and eventually file for Chapter 7 liquidation. But the brands can live on — or a company can buy the intellectual property of Instant Pot, Pyrex, and CorningWare. The company can also acquire spot brands – Bloomberg reported The company makes a sale.

Regardless, Pratt of Congress, New York, will still use its Instant Pot.

She said, “I’m lazy.” “Having one pot that only requires one thing to clean is really reason enough to use it.”