October 19, 2023
Photo: Canva
Can Instant Pot Survive Post-Bankruptcy?
The New York Times reported earlier this year that “Instant Brands has struggled to find new fans for its beloved Instant Pot and other products.” Now the company has filed for bankruptcy.
Introduced in 2010, the Instant Pot emerged as an electronic marvel for both pressure and slow cooking. Its swift ascent in popularity gave birth to an enthusiastic community known as “Potheads,” who passionately experimented with a variety of recipes, from soups to puddings.
Vanity Fair put it bluntly by stating that “the Instant Pot failed because it was a good product,” and “maybe even a great one.” It saves time and labor, “promising to turn ingredients into family meals while you clean up, tend to your kids, and do all of the other things you could be doing instead of keeping an eye on the stove.”
However, the allure of the Instant Pot seems to have waned among newer audiences, placing its parent company in a precarious position. Instant Brands, the conglomerate behind the Instant Pot and other renowned household names like Pyrex, Snapware, and CorningWare, recently disclosed its decision to file for Chapter 11 bankruptcy. This strategic move aims to secure $132.5 million in financial support, allowing the company to reorganize and remain operational rather than dissolve its assets.
In a recent statement, Instant Brands emphasized that the fresh capital would ensure uninterrupted payments to employees, suppliers, and vendors. Additionally, the bankruptcy proceedings won’t encompass the retailer’s operations beyond the U.S. and Canada. While the company remained tight-lipped about the performance of specific products, data from the market research firm Circana indicated a 20% slump in multicooker sales between April 2022 and April 2023.
Smrity P. Randhawa, a clinical accounting professor from the University of Southern California Marshall School of Business, highlighted a challenge for companies like Instant Brands and Peloton: They manufacture long-lasting products that don’t require frequent replacement. Barbara E. Kahn, a marketing professor from the Wharton School of the University of Pennsylvania, stressed that makers of such durable goods must incentivize consumers to upgrade or replace their items.
Merely achieving viral popularity doesn’t guarantee a company’s lasting success, particularly for brands offering products intended for single-time purchases. While a product might enjoy a sweeping demand surge, this momentum often dwindles, potentially depriving the company of its primary income stream. Moreover, maintaining a sustainable business is challenging when relying solely on products without a continuous revenue model.
In contrast to the Keurig coffee maker, which can be upgraded with advanced features, Instant Pots maintain an inherent simplicity.
This month, TheStreet stated that the Instant Pot company should survive its Chapter 11 filing, “which will be a relief for millions of people who own its products.” Before the bankruptcy, the company had been majority-owned by Cornell Capital, but now it’s been sold.
Instant Brands’ proposal has been approved for “the sale of its housewares and appliance businesses to affiliates of Centre Lane Partners,” according to PR Newswire.
Instant Brands anticipates that the sale will ensure its continued operations and the backing of its entire brand portfolio. Before the companies finalize these deals, they will undergo scrutiny by regulatory authorities in both the U.S. and Canada. The aim is to complete both transactions by the end of Q4 2023.
The company estimates that nearly 90% of American homes (and more around the world) own a product from Instant Brands.
BrainTrust
Nikki Baird
VP of Strategy, Aptos
Doug Garnett
President, Protonik
Gary Sankary
Retail Industry Strategy, Esri
Recent Discussions
Discussion Questions
Are there better ways for companies with products like the Instant Pot to generate continuous sales while maintaining the “outdated” notion of building long-lasting products? Would shifting their products to an upgradable lifecycle only harm the brand from a sustainability standpoint in the long term?
Poll
Loading …
A solid product strategy includes tactics to continue to drive growth and sustain revenue post-peak. I do take issue with the statement, “Instant Pots maintain an inherent simplicity.” One of the issues in our house is that using an Instapot is anything but simple. It may just be me, but I had to have the reference card handy to anything other than the very basic functions. This is one of the reasons my Instapot has been sitting in a cupboard next to my breadmaker. Neither of them will survive our pending retirement downsize.
Many of the products sold by Instant Pot are very durable and long-lasting, so purchase frequency among core customers is low. That’s not a bad thing in terms of the brand image it creates, but it also creates commercial challenges. There are two ways to overcome this issue. The first is to constantly innovate and refresh the periphery of the range – with more fashionable lines and new big hitters. This can be difficult, but it is an important sales driver – and one that Instant Pot largely failed at. The second way is to win over new customers. Here, Instant Pot suffered because many of its products/brands like Pyrex are expensive and they do not sufficiently explain the benefits. If you’re looking to buy cookware in a store like Target, own brand is often cheaper and looks better – and that’s what many shoppers now opt for.
I really don’t think this is about the durability or longevity of the product – I mean, what a statement to make: we failed because our products didn’t fail and consumers didn’t have to replace them. A bit counter to consumer mindset these days – the company could’ve easily gone out of business as consumer disgust over how quickly they die led them to abandon the brand.
This is more about platform than it is about anything else. Instant Pot was a one-hit wonder. The company did not have a core technology or value proposition that could be used to expand a product line. Maybe that is whatever went into making pressure cookers being perceived as “safe”. Maybe that is the multi-function aspect – maybe they should’ve gone after blenders or food processors as relatively single-purpose devices that they could’ve taken out with a multi-function blender, food processor, soup cooker or something. Whatever it may be, it is this failure of imagination (or customer analysis and feedback) that ultimately doomed Instant Pot, that and an over-reliance on both a single product as the basis of the company’s success and the ultimate failure of assuming that past results predicted the future.
And, for the record, I own an Instant Pot and while I am not a “Pothead” I do still use it regularly. The very people who insisted I needed one – theirs are gathering dust, mostly because they still fear the pressure part of pressure cooking.
I am having a difficult time with “90% of households have an instant brands product”..that does not seem possible for a company in bankruptcy proceedings but that is simply an uninformed observation.
Setting that aside, I see nothing “strategically missed” here…the company had a hit product, cashed in for a while, and now they are facing a financial reckoning. End of story.
Surely some other firm will pick up the brand and add it to a larger lineup of products.
Well it was a company estimate: dare we suggest one of the the things that led to bankruptcy was a lack of proficiency with numbers ??
If Vanity Fair was blunt, let me be even blunter; gibberish! companies don’t file for bankruptcy because their products were beloved or “good…maybe even… great”. They fail because they were poorly run or because competitors produced something better. I don’t know what Instant Brands particulary issues were, but they need to address the real one(s), not delusions.
The new owners buying Instant Pot for a song should focus on how to make the units more intuitive to use (pointing to Apple), innovate and expand in meals/meal prep. It could be re-positioned as a must have tool for Gen Zers (better than what grandparents now own), to this large crowd beginning to enter the work force. As noted on RetailWire this week, Gen Zers want to stretch their dollars by eating more at home, among other things.
What I don’t see here is a far clearer option. Companies with products like InstantPot, GoPro, Peloton, George Foreman Grill, RotoZip, and many others need to plan for their market to settle at a lower rate of sales than at their peak. THAT rate of demand will be highly reliable and continue for a very long time.
It’s not clear why doing this planning is so hard in corporate America. It may be the myth of “always growing.” If so, I recommend the book Small Giants by Bo Burlingham which looks at company choices.
The idea that a business must always grow in revenue is an idea only required of public companies and venture funded startups. InstaPot should have sorted out that they didn’t have a straight-forward follow up to maintain sales and planned for an eventual drop off.
While we have two different size Instant Pots in our household, my wife is the primary user. I still can’t figure out all the settings. They are reliable – we’ve only had one that failed – and the warranty covered it. So not a reliability issue. But the ease of use and simplicity just isn’t there. If these were retooled and repositioned, more around ease of use, might be a way to breathe new life into them going forward.
More Discussions
Is Build-a-Bear a Strong Enough Brand To Find Success at Walmart, Despite a More Modest Experience?
Will the Build-a-Bear partnership with Walmart produce the desired results?Does David’s Bridal Have a Sizeable Wholesale Opportunity?
How significant is David’s Bridal’s wholesale opportunity?Are Family Dollar’s New Micro-Stores Likely To Succeed?
Family Dollar looks for a format change while Dollar Tree pushes multi-price strategy harder.
A solid product strategy includes tactics to continue to drive growth and sustain revenue post-peak. I do take issue with the statement, “Instant Pots maintain an inherent simplicity.” One of the issues in our house is that using an Instapot is anything but simple. It may just be me, but I had to have the reference card handy to anything other than the very basic functions. This is one of the reasons my Instapot has been sitting in a cupboard next to my breadmaker. Neither of them will survive our pending retirement downsize.
Many of the products sold by Instant Pot are very durable and long-lasting, so purchase frequency among core customers is low. That’s not a bad thing in terms of the brand image it creates, but it also creates commercial challenges. There are two ways to overcome this issue. The first is to constantly innovate and refresh the periphery of the range – with more fashionable lines and new big hitters. This can be difficult, but it is an important sales driver – and one that Instant Pot largely failed at. The second way is to win over new customers. Here, Instant Pot suffered because many of its products/brands like Pyrex are expensive and they do not sufficiently explain the benefits. If you’re looking to buy cookware in a store like Target, own brand is often cheaper and looks better – and that’s what many shoppers now opt for.
I really don’t think this is about the durability or longevity of the product – I mean, what a statement to make: we failed because our products didn’t fail and consumers didn’t have to replace them. A bit counter to consumer mindset these days – the company could’ve easily gone out of business as consumer disgust over how quickly they die led them to abandon the brand.
This is more about platform than it is about anything else. Instant Pot was a one-hit wonder. The company did not have a core technology or value proposition that could be used to expand a product line. Maybe that is whatever went into making pressure cookers being perceived as “safe”. Maybe that is the multi-function aspect – maybe they should’ve gone after blenders or food processors as relatively single-purpose devices that they could’ve taken out with a multi-function blender, food processor, soup cooker or something. Whatever it may be, it is this failure of imagination (or customer analysis and feedback) that ultimately doomed Instant Pot, that and an over-reliance on both a single product as the basis of the company’s success and the ultimate failure of assuming that past results predicted the future.
And, for the record, I own an Instant Pot and while I am not a “Pothead” I do still use it regularly. The very people who insisted I needed one – theirs are gathering dust, mostly because they still fear the pressure part of pressure cooking.
I am having a difficult time with “90% of households have an instant brands product”..that does not seem possible for a company in bankruptcy proceedings but that is simply an uninformed observation.
Setting that aside, I see nothing “strategically missed” here…the company had a hit product, cashed in for a while, and now they are facing a financial reckoning. End of story.
Surely some other firm will pick up the brand and add it to a larger lineup of products.
Well it was a company estimate: dare we suggest one of the the things that led to bankruptcy was a lack of proficiency with numbers ??
If Vanity Fair was blunt, let me be even blunter; gibberish! companies don’t file for bankruptcy because their products were beloved or “good…maybe even… great”. They fail because they were poorly run or because competitors produced something better. I don’t know what Instant Brands particulary issues were, but they need to address the real one(s), not delusions.
The new owners buying Instant Pot for a song should focus on how to make the units more intuitive to use (pointing to Apple), innovate and expand in meals/meal prep. It could be re-positioned as a must have tool for Gen Zers (better than what grandparents now own), to this large crowd beginning to enter the work force. As noted on RetailWire this week, Gen Zers want to stretch their dollars by eating more at home, among other things.
What I don’t see here is a far clearer option. Companies with products like InstantPot, GoPro, Peloton, George Foreman Grill, RotoZip, and many others need to plan for their market to settle at a lower rate of sales than at their peak. THAT rate of demand will be highly reliable and continue for a very long time.
It’s not clear why doing this planning is so hard in corporate America. It may be the myth of “always growing.” If so, I recommend the book Small Giants by Bo Burlingham which looks at company choices.
The idea that a business must always grow in revenue is an idea only required of public companies and venture funded startups. InstaPot should have sorted out that they didn’t have a straight-forward follow up to maintain sales and planned for an eventual drop off.
While we have two different size Instant Pots in our household, my wife is the primary user. I still can’t figure out all the settings. They are reliable – we’ve only had one that failed – and the warranty covered it. So not a reliability issue. But the ease of use and simplicity just isn’t there. If these were retooled and repositioned, more around ease of use, might be a way to breathe new life into them going forward.