Add some minced meat, onion, capsicum, tomato and spices. Push a button, head out for work and return hours later to a perfectly prepared chili.
For a while, the Instant Pot, an electronically controlled appliance that could pressure-cook and slow-cook food, was the kitchen appliance everyone wanted. The product hit the market in 2010, quickly became a top seller, and spawned a group of fans who called themselves “potheads” and used their Instant Pots to make dozens of recipes.
Those pits are still around, making soup, stew, and pudding. But over the past few years, Instant Pot has failed to attract new fans, and its parent company is struggling.
Instant Brands, maker of the Instant Pot and other household brands like Pyrex, Snapware and Corningware, announced Monday that it had filed for Chapter 11 bankruptcy. According to the company, the move will secure $132.5 million in funding so that it can stay afloat and restructure its business rather than liquidate it. The company did not respond to a request for comment on Wednesday about its sale.
“After successfully navigating the COVID-19 pandemic and the global supply chain crisis, we continue to face additional global macroeconomic and geopolitical challenges,” Instant Brands President and CEO Ben Gadbois said in a statement Monday. that have affected our business.”
Instant Brands said in a statement on Wednesday that the new financing will allow the company to continue making payments to workers, vendors and suppliers. Its entities outside the United States and Canada are not part of the bankruptcy filing.
The company did not say whether any specific products were selling poorly. But, according to market research company Sarkana, dollar and unit sales for multicookers — appliances that can cook food in multiple ways — fell 20 percent from April 2022 to April 2023. Sales data was not available for other Instant Brands products.
Sales drop during coronavirus pandemic: Multicookers and air fryers posted “double-digit dollar sales” in 2020, according to a report npd group, a market research company that later merged with another firm to form Circana. As a result, the report said, “many households now have these devices on hand.”
Instant Brands is one of many companies facing a slump in sales after a pandemic-fuelled spike.
Many people were stuck at home during the height of the pandemic, such as cooking and exercising, and bought products they needed, such as kitchen appliances and Peloton bikes, said Barbara E. Kahn, marketing professor at the Wharton School of the University of Pennsylvania.
But after the lockdown ended, people found “they didn’t need another InstaPot,” said Dr. Kahn, using the gadget’s popular nickname. “They don’t need another Peloton. They don’t need these things they’ve already bought.”
After Peloton bike sales spiked early in the pandemic, the home exercise equipment company lost ground $439 million last year and laid off 20 percent of its work force as people returned to the gym.
S&P Global, Credit Rating and Analytics Corporation, Downgrade Instant Brands Rating Last week due to lower consumer spending in discretionary categories; it did it re Tuesday after the company filed for bankruptcy. S&P analysts wrote on June 8 that Instant Brands’ net sales fell 21.9 percent in the first quarter of 2023 from the same period last year, marking the seventh consecutive quarter of sales declines.
Smriti P. Randhawa, clinical accounting professor at the University of Southern California Marshall School of Business, said there is still hope for Instant Brands, as Chapter 11 bankruptcy gives the company a chance to reorganize its business. However, part of the problem for companies like Instant Brands and Peloton is that they produce durable products that don’t need to be replaced regularly, Dr. Randhawa said.
Dr. Kahn said that companies that are known in economics as “sustainable” need to give consumers a reason to switch to their products.
Dr Randhawa, who bought an Instant Pot during the pandemic, said she still uses it twice a week for cooking.
“Social media sold it to me,” she said. “It works. It’s probably going to last a long time, so there’s no need to rush out to buy another.”
