When I first read that the Wall Street Journal put the deal size for the merger between Instant Brands and Pyrex’s parent company at about $2 billion, my first thought was “that’s a whole lotta Instant Pots.”
And while it is – after all, at $99 or so per unit, you’d be looking at 20 million multicookers sold before you’d hit a topline revenue equal to that number – this deal is about much more than a line of cooking gadgets.
In fact, it’s easy to draw a straight line between the impressive valuation placed on this deal and that Instant Pot is arguably the first cooking appliance brand that the Millennial generation can call it’s own. How’d this hundred dollar cooking gadget get there? By packing a ton of functionality into one device, adding on a more user-friendly (but hardly perfect) digital user interface, and – perhaps most importantly – fostering an online community of millions to share their creations.
In short, the company made cooking both accessible and shareable for a food-crazy generation.
And again, it’s important to emphasize it’s this unique connection the Instant Pot brand has with Millennials that put a ten-year-old company with less than 100 employees on equal footing value-wise with a nearly century-old housewares company with three thousand employees in Corelle. The deal, which with back-of-envelope math values Instant Brands at roughly a billion, makes the company the first kitchen tech unicorn of this generation and worth roughly four times the value Electrolux put on Anova at the time it bought the sous-vide specialist.
But unlike Anova, who despite helping to introduce sous vide to the consumer market hasn’t caught on as a household name, Instant Pot has become a household name. They did so by essentially becoming synonymous with a cooking style – arguably even a lifestyle – that embodies the maker sensibility and community-sharing aspects loved by a generation that is rapidly moving into their adulting years with busy careers, home (and kitchen) purchases and new families.
In a sense, the deal is about buying a brand that represents all this and, conceivably, could be extended into new innovative products over time. In other words, it’s about trying to become the Whirlpool or Cuisinart of a generation entering their prime food-making years.
To check my thinking, I decided to ask Robin Liss her thoughts on why Instant Pot has caught the cooking imagination of an entire generation and she pointed to the tie between consumer experience and resulting brand value. As the founder of Reviewed.com and now-founder of a kitchen startup of her own in Suvie, Liss has a unique perspective both as an industry watcher and someone working to create her own kitchen tech brand.
“Ultimately,” said Liss, “you have to have a great product experience, and that leads to building a great brand with consumers, which is what companies like to acquire and the markets put a high value on. However, to get to that point of having a great brand requires some competitive advantage, and usually that’s driven by great technology but it can also just be streamlining the product experience on existing tech.”
In other words, Instant Pot’s brand value is derived from a strong consumer experience powered by technology that made cooking technologies like pressure cooking and slow cooker accessible to a mass audience for the first time.
Sounds about right.