How Instant Pot went from coveted appliance to bankruptcy
When Carmel Pratt's slow cooker broke down in late 2019, she decided an 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 construction consultant in Congers, N.Y., uses that same Instant Pot one or two times a week. And she doesn't plan on upgrading to a newer version.
"I don't feel the need to spend more money," she said. "The type that I already have works great, and I don't know where it would land if I got rid of it and bought a new one."
It's a scenario like this that helps explain why Instant Brands, the parent company of Instant Pot, Pyrex, CorningWare and other popular brands, went from selling the hottest countertop appliance 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 the enduring conundrum for brands like these - durability can ultimately be their biggest enemy.
"Customers don't buy multiples," said Mark Cohen, director of retail studies at Columbia Business School. "Having a consumer business that basically trades on a limited assortment that isn't refreshed, is outdated and isn't expanded upon, is a deadly trap."
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, the founder of the food-tech conference Smart Kitchen Summit and editor of industry publication the Spoon. According to market research firm Circana, sales of multicookers last year fell 50 percent from 2021. For the 12 months ending in April 2023, multicooker sales declined 20 percent compared with the previous 12-month period, Circana data shows.
"I think consumer cooking hardware, particularly countertop ones, oftentimes is a challenging business because the margins are pretty low," Wolf said. "And at least in the U.S., Americans are pretty cheap when it comes to buying new countertop gadgets."
In a statement, Instant Brands's chief executive Ben Gadbois said the company continues "to face additional global macroeconomic and geopolitical challenges that have affected our business," and it secured $132.5 million in funding to continue operations.
The company said in the filing Tuesday that Chapter 11 protections would give it "time and flexibility" to create a plan for bolstering Instant Brands's finances.
Instant Pot, founded in 2009, became increasingly popular during the mid-2010s, when Americans' interest in multicookers surged. It was the top-selling item on Amazon Prime Day in 2016, with 215,000 orders, the online retailer reported, and remained one of the annual event's hottest gadgets in 2017 and 2018. Private equity firm Cornell Capital acquired Instant Pot in 2019 and combined it with kitchenware company Corelle Brands, which included well-known legacy brands Pyrex and CorningWare.
There were Facebook groups, cookbooks, YouTube channels and blogs all dedicated to the multifunctional pressure cooker. The company sent Instant Pots to influencers and bloggers who wrote about how the appliance made cooking easier and more efficient.
"It was just a stroke of marketing genius," said Lisa McManus, the executive editor of America's Test Kitchen reviews. "They made pressure cooking cool again - or maybe for the first time."
A product that once intimidated amateur cooks was now accessible, she added.
The brand's success only grew during the pandemic, according to Circana. Unable to dine out or hesitant to order-in, many Americans were forced to be creative when it came to food preparation. Instant Pot made it easier.
Cooped up at home in Milwaukee in 2020, Ellie Leitner said her favorite food and mommy bloggers were constantly posting recipes for Instant Pot.
"I was like, 'Oh my god, I can't make this white bean chili without an Instant Pot!'" the 30-year-old psychotherapist said. "So I had to get it."
But Leitner, who bought the Instant Pot during a Black Friday sale that year, estimates she used the pot twice. Now, it's collecting dust under a pile of boxes in her basement. "Yeah, I think I regret buying it," she said.
Instant Brands, similar to Peloton, fell victim to post-pandemic trends, Cohen said.
After an initial surge of demand, "the bottom fell out," Cohen said. "And they are probably suffering from enormous inventory that they pushed out into the channels that support their products, which stopped selling."
Instant Brand's other lines, like Pyrex, are hard to scale, he added. Pyrex products are sturdy and last decades. As opposed to others in the category such as KitchenAid and Le Creuset, Pyrex isn't releasing new colors of its product and is not seen as a kitchen accessory, Cohen said.
Instant Brands tried to expand its product line. McManus noted it released an air fryer - the Instant Vortex - which American Test Kitchen named its top pick this year. It also made coffee machines, stand mixers, air purifiers and an indoor grill. But they didn't have the market reaction like Instant Pot did.
"It's hard to invent a new thing that people are going to jump on," McManus said, and it's rare to have a "lightning strikes twice" moment.
It's unclear what will happen to Instant Pot, Pyrex and CorningWare. There is a possibility the company finds its financial footing during the bankruptcy process, successfully reorganizing and shedding most of its liabilities as the creditor becomes the new equity partner, giving the company "a new lease on life," Cohen said.
But that's the "Hollywood ending," he added. More often these companies fail at their restructuring plan, acquire more debt and eventually file for Chapter 7 liquidation, Cohen said. But the brands could live on - or a company could buy the intellectual properties of Instant Pot, Pyrex and CorningWare. A company could also acquire Instant Brands - Bloomberg reported the company is entertaining a sale.
Regardless, Pratt of Congers, N.Y., will still use her Instant Pot.
"I'm lazy," she said. "Having one pot that requires one thing to clean is really reason enough to use it."
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