The Company Behind The Quarantine-Favored Instant Pot Filed For Bankruptcy
Instant Brands, which is the parent company behind Instant Pot as well as Pyrex, has filed for Chapter 11 bankruptcy, according to CNN. Chapter 11 is reorganization bankruptcy and allows a business to stay active while creating a plan to repay debtors. Instant Brands filed for bankruptcy on June 12 in a Houston court and is exploring options to sell the company, (per Bloomberg). Instant Brands is owned by investment firm Cornell Capital, LLC.
The company's Chief Restructuring Officer Adam Hollerbach blamed the drop in sales on consumers heading back outside post-pandemic and people spending more money on travel instead of appliances. The situation for Instant Brands became more dire after the company suffered a sharp 21.9% decline in sales during the first quarter of 2023, in comparison to 2022.
According to Hollerbach, the company has tested increasing prices and cutting costs but has been unable to increase profitability despite different tactics. The Instant Pot is also facing stiff competition from air fryer products with consumers spending $1 billion on air fryers in just 2022. Instant Pot created an air fryer add-on to attempt to address the changing preference, but it appears to not have helped the company's lagging sales.
Consumer behavior is changing
With the pandemic subsiding, consumers are also experiencing cooking fatigue. According to OnePoll on behalf of Home Chef, one in three people in 2021 reported that spending the pandemic indoors affected their joy for cooking. People are finding it harder to make time to cook as people head back to the office or have busier schedules with social lives returning and sports resuming regular operations.
In addition, high inflation prices are playing a role in changing sales numbers for companies like Instant Brands. Record prices have spooked shoppers and shifted behavior to cutting back on non-essential spending with one report finding nearly 70% of consumers planning cutbacks, according to Retail Dive. The changing behavior is impacting sales at retailers nationwide, such as Target and Macy's. Both stores, which sell Instant Brands products, have reported shifts in consumer spending and a slowdown in shopping due to the economy. Returning to profitability may not be easy for this once-popular company.