Outdoor cooking has boomed during the pandemic and the grilling industry thinks it will stay hot
Grills have caught fire amid the pandemic as consumers stuck at home seek new ways to cook meals, as well as entertain and safely shelter family and friends outdoors.
But while there are plenty of signs that the outdoor cooking craze is here to stay, inflation, market saturation and supply chain challenges threaten to bring the temperature down.
Since July 2020, more than 21 million grills and smokers have been purchased by American consumers, according to NPD data. Outdoor cooking industry revenue reached $6.1 billion in sales in 2021, a 14% year-over-year growth.
An estimated 70% of US households now own at least one grill or smoker, according to consumer research by the Hearth, Patio & Barbecue Association (HPBA), the highest the industry group has ever seen, according to its CEO and President Jack Goldman.
Almost every type of grill saw sales jump, from traditional charcoal and gas grills from companies like Weber and Char-Griller, to pellet grills and smokers from companies like Traeger and Masterbuilt. The adoption of outdoor cooking has also improved products such as Ooni outdoor pizza ovens and Blackstone gas griddles.
“People weren’t taking vacations, they were investing more in the home and living outdoors, and they were tired of cooking indoors,” Goldman said of the trend.
That success has led to a boom in mini-grill IPOs, with Traeger and Weber going public last year. Plans for several SPAC deals were also announced, ranging from griddle maker Blackstone to barbecue and outdoor living e-commerce platform BBQGuys.
But it’s also led to a saturated market of new grill owners less likely to seek out upgrades or replacements. About 38% of all grill owners have purchased a new grill in the past two years, according to HPBA data.
As the popularity of grilling continues to grow, factors such as inflation, freight, rising raw material costs and supply chain disruptions are now eating away at grilling sales.
Weber said its second-quarter 2022 sales fell 7% year-over-year to $607 million. During a May 15 conference call with analysts, CEO Chris Scherzinger said the industry “has seen a significant decline in point-of-sale data year-over-year, with a sharp reduction in the buyer traffic” since March.
“For a few years it’s been difficult to understand what 2020 and 2021 mean,” Scherzinger said on the call. “We believe the pandemic has increased consumer engagement in the category and established a new base of operations.”
Scherzinger added that while many people who bought grills in 2020 pushed to replace an old one given the surrounding circumstances, the situation in 2022 is “more around all the macro pressures on consumers, the inflationary pressure on gas and grocery prices, volatile stock market pressure on things like 401(k) savings, or just consumer confidence more broadly.”
Traeger Pellet Grills also saw sluggish sales, posting a 5% year-over-year decline in its first quarter of 2022. Shares of both companies struggled as a result, with Traeger down more than 60% and Weber down more than 40% per year. -to date, versus a decline of around 20% for the S&P 500.
BBQ Guys canceled its $963 million SPAC in November, while the SPAC with which Blackstone Products was to merge has pushed back its plans three times since announcing the deal in December.
But Traeger CEO Jeremy Andrus said he remains optimistic, though his big question is whether Americans will continue to embrace outdoor cooking as they emerge from the pandemic.
“You look through the categories and it’s very different,” he said. “You look at health and fitness, and Peloton for example – that’s spawned a category that’s going to survive, but it’s also clear that when consumers were given the option to go back to a gym, they did. .”
The desire to cook more meals at home instead of eating out, Andrus said, seems to persist. He cited research suggesting that 35% of Americans said they discovered a passion for cooking amid the pandemic, with 75% saying they plan to cook as much or more at home after the pandemic.
It also intersects with several other trends, Andrus said, including an increased desire to get together with friends and family and for food to be something you share, whether it’s a plate of pulled pork or ‘a photo on Instagram.”
“People love food, and now that restaurants have opened, we expect them to go out and eat,” he said. “But we think they love cooking at home now too.”