The Instant Pot first hit the market in 2010 and quickly gained a following of dedicated users who took every opportunity to praise the pot’s pressure cooking and slow cooking abilities. Sales climbed throughout the decade as word-of-mouth spread, and then the Instant Pot truly became a blockbuster during the pandemic. Sales of multicookers and air fryers doubled in 2020 as millions of homebound people searched for ways to make easy meals in their kitchens.
Customers certainly got what they were looking for when they bought an Instant Pot, but the same can’t be said for the brand’s parent company. The private equity firm Cornell Capital acquired Instant Pot in 2019 and wanted to expand the brand into other areas to encourage consistent growth. After all, consumers tended to purchase only one Instant Pot that would then serve them well for years to come. Now called Instant Brands, the company attempted to earn steady sales by expanding into other appliances like air fryers and air purifiers.
This strategy failed to pay off, however, largely because people already owned these durable products as well. The company canceled $100 million worth of orders with retailers in 2021 as demand slowed, ensuring that sales would remain low. The exercise company Peloton found itself in a similar situation in the years after 2020, losing more than $439 million in 2022 alone. According to marketing professor Barbara E. Kahn, consumers found “they don’t need another Instapot. They don’t need another Peloton. They don’t need these things that they already bought.” As a result of collapsing sales, Instant Brands filed for bankruptcy protection last week. The company said this decision will allow it to secure $132.5 million in financing, giving it the opportunity to restructure rather than liquidate its assets and close up shop entirely.
Questions:
- Why is it difficult to consistently grow sales for durable products like the Instant Pot?
- Do you think Instant Brands will survive bankruptcy and return to success in the future? Why or why not?
Sources: Jesus Jiménez, “The Instant Pot Was Beloved. Now Its Maker Has Filed for Bankruptcy,” The New York Times, June 15, 2023; Alex Cranz, “In the Bid to Grow at All Costs, Instant Pot is Cooking Itself,” The Verge, June 12, 2023. Photo by Ajay Suresh.