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Instant Brands

July 25, 2023

Ninja’s Thirsti Drink Machine Shows Why It Went Public While Other Countertop Brands Go Out of Business

When I first got the email this morning from the Ninja PR rep, I got excited and thought maybe the company had gone and created a drink replicator similar to the one from Cana.

“SharkNinja’s First Hydration System, Ninja Thirsti, Allows Users to Create Thousands of Drinks at the Touch of a Button,” the press release declared triumphantly.

Ok, Ninja, you’ve got my attention.

Reading further, it became clear that the new Thirsti machine isn’t going to create any drink – coffee, tea, juice, beer, wine – at the push of a button. Instead, we have a machine taking on the Sodastreams and Philips of the world with a new home fizzy drink maker, only with a couple of interesting twists, including the ability to mix two flavors at once and vary the level of carbonation and flavor intensity. The new Thirsti will sell for $179 and will soon be available at major retailers like Walmart, Best Buy, and Amazon.

The product isn’t a bad one – in fact, it looks like an improvement on what you can get from others in the category – it just isn’t a make-anything personalized drink machine like the Cana. But, unlike the Cana, the Thirsti will ship and be available at a competitive price point (the Cana was going to sell for $900).

In other words, the product was made for today, not the future, with a slightly different twist on what’s out on the market. And as I write those words, I may have just summarized SharkNinja’s guiding North Star principle because it seems the company does it repeatedly.

They did it when they offered up their Creami countertop ice cream and smoothie maker in 2021, which the NY Times compared to a professional machine in the Pacjojet in its ability to whip frozen treats in a similar fashion as a professional machine in the Pacojet (though with a few red flags).

They did it again when they entered the BBQ/smoker space, creating an interesting-looking outdoor grill and smoker, about which Home & Garden had to say the following: “Many grills have multiple cooking functions, but there isn’t anything on the market quite like the Ninja Woodfire Outdoor Grill. Not only does it grill, but it can roast, bake, air crisp, dehydrate, broil, and best of all – smoke meats and vegetables to perfection.”

And we can’t forget how the company was one of the first to offer a combination air fryer and pressure cooker in 2018, a year before Instant Pot got around to offering the product combo.

And it’s these products that are, in a sense, why Ninja is going public while others are puttering along with lesser market share and, in some cases, going out of business.

If you’d asked anyone back in 2019 who would go public in 2023, most would have pointed to Instant Pot, not SharkNinja. But today, it’s SharkNinja that is growing revenue (it had $3.76 billion in the 12 months ending in March) while Instant Brands is reorganizing its business under chapter 11 and laying off employees.

The spin out comes six years after SharkNinja was acquired by Chinese small appliance entrepreneur (and Joyoung founder) Wang Xuning, who used private equity financing to do the deal and create a new company in JS Global Products with SharkNinja at the center. Now, years later and with hundreds of patents to its name, SharkNinja has plans to go public.

The countertop appliance business is a very tough one to compete in. Still, Ninja has thrived due to its willingness to create new mashup concepts for products, often with interesting design choices, all packaged around unique and memorable brand names for each line. This contrasted with companies like Instant Brands, which would at times create products that seemed derivative of its initial ideas, or like Gourmia and other copycat brands, whose knockoff products didn’t have the same quality feel or brand line cohesiveness.

So while Ninja hasn’t offered a drink replicator, give them time. They’ve shown they can surprise us, and maybe someday, that will be with something straight out of the pages of science fiction.

June 13, 2023

Thin Margins & Competitive Moats: Analyzing Instant Brands Journey to Bankruptcy

Instant Brands, the parent company behind the Instant Pot, has filed for Chapter 11 bankruptcy today, as first reported by Bloomberg. The company, which also owns the Pyrex glassware brand, announced they’d reached a deal for a new $132.5 million financing line of credit to support the company as it navigates the bankruptcy process and figures out a new path forward.

Signs of trouble first surfaced for Instant Brands earlier this year when the Wall Street Journal reported the company had hired advisors to help it restructure. At the time, the company had a $400 million line of credit trading at a severe discount due to rising interest rates. According to Bloomberg, the combination of high-interest rates, waning access to new lines of credit, and a dwindling cash position forced the company to finally file for Chapter 11.

So what happened? How did Instant Brands, the company behind what was once the fastest-growing countertop appliance in the US, go from high flyer to Chapter 11 in just a few short years?

Below are some of the reasons I believe led to the company’s current predicament:

The Pressure Cooker Category Reached Saturation Very Quickly

Part of the reason for the success of the Instant Pot was the fantastic value for the consumer. In one multifunction appliance, the consumer had a rice cooker, steamer, bean maker, yogurt machine, sauté pan – you name it – all for $100 or less. It was hard to beat, which is why Instant went from zero brand recognition a decade ago to becoming eponymous with the category it created (or, in a sense, reinvented) in just a few short years.

The problem with exponential growth is you can get to market saturation very quickly. The product (and its clones) was affordable to almost anyone, and before long, anyone who wanted one had one. But unlike high-margin tech products like the iPhone, the Instant Pot isn’t something most consumers want to replace every few years.

Clones, Ninjas, and Narrow Competitive Moats

While the Instant Pot’s reinvention of the pressure cooker was an innovative take on an older category, it was easy to knock off. Because of this, it wasn’t long before a slew of low-cost copycats flooded Amazon and other online retailers.

At the same time, fast-moving brands like SharkNinja kept on innovating. They jumped on new cooking appliance categories (like air fryers) more quickly than Instant Brands, which has admitted to being late to the category. Instant’s CEO has stated the company is continuing to look for its next hit, even as it enters into financial reorganization.

In some ways, the ease with which low-cost copycats and brand-savvy bigger companies like SharkNinja were able to create similar products that were instantly competitive with Instant Brand’s showed just how small, in retrospect, Instant’s competitive moat was. In other words, there was no significant technology, manufacturing or brand differentiators that companies entering the market had to overcome.

Non-Premium Pricing and Low Customer Loyalty

While Instant became synonymous with the smart multicooker category, the brand didn’t necessarily build significant brand loyalty. Customers, who often bought their Instant Pot or clone for end cap fire sale pricing, didn’t necessarily view the Instant Pot brand as something unique or irreplaceable. Other categories like built-in ovens, refrigerators, or coffee makers usually have bigger price tags and connotations of premium user experiences. At the same time, the Instant Pot often seemed cheap in price and quality. Much of the damage around the brand’s low-rent image was self-inflicted.

Buy High, Sell Low

When Corelle and Instant Pot announced the merger of the two companies, the combined value of the new entity was estimated at around $2 billion. Much of that market value was attributable to the white-hot Instant Pot, which meant Corelle would pay out the nose to bring the company and its fast-growing product lineup into the fold.

While I don’t have the projections that Corelle put together to rationalize the debt load they would take on to finance the acquisition, it’s probably not too big a leap to say they didn’t forecast sales of Instant Pot cooling off as fast as they did. And, as detailed in the Journal in March, the company hasn’t come close to finding a successor hit to help the company get on the right path again. At the same time, the lean operating model of the Instant Pot’s early days (which had four employees in 2013) is long gone, making way for the layered corporate bureaucracy of Corelle (the combined company had 1,900 employees earlier this year).

The bottom line is Instant Brands became highly leveraged right as the product started to reach market saturation. In the following years, Instant has moved slower than its competitors like SharkNinja and Dash, who have come out with often better-looking products in new categories at equal or lower prices. The result is this week’s announcement.

It’s really too soon to tell how the company will far going forward. Post-bankruptcy, Instant will have a clean balance sheet but a much smaller innovation team, and without the company founder Robert Wang (who left the company’s operation in late 2021), it’s not clear where the next big company-changing idea will come from.

March 21, 2023

Fresco Introduces Complete Refresh of KitchenOS Platform, With Aim of Delivering True Multi-Brand Device Contol

Today, Fresco announced the launch of its KitchenOS platform, a ground-up refresh of its smart kitchen software suite. As part of the announcement, the company revealed that Instant Brands, the maker of the popular Instant Pot smart pressure cooker, would be the first brand to launch the new KitchenOS with the Instant Pot Pro Plus.

The new KitchenOS, which includes new firmware, apps, and smart recipes, is the result of a two-year effort by the Dublin-based company designed to enable multi-appliance control and a new personalized user experience.

In an interview with The Spoon, Fresco CEO Ben Harris said the company realized in 2021 that in order to achieve a scalable approach to the smart kitchen, they would need to rebuild the platform from the ground up. They began to work on the new platform, accelerating their pace last year after a $20 million Series B investment.

“When we launched the Drop scale nine years ago, we received a lot of inbound interest from appliance manufacturers who saw the need for a neutral platform for the kitchen and the inevitability of one interface for the entire kitchen and their expectation that there would be one screen for orchestration,” said Harris. “They all want the back-end infrastructure, they all want the apps, they want the IoT branded for themselves, but customized with similar components under the hood.”

This led to numerous partnerships and many custom-built apps for appliance brands, but the problem, according to Harris, was that as the inbound requests started to multiply for custom-built customer-facing apps, it really began to slow the company’s ability to build products.

“We would tweak something on the platform over here, and it would cause problems over there,” said Harris.

According to Harris, the company faced three major problems around this time. First, they had to build new firmware for every single appliance, which meant it took nine months to launch a new product. Second, the company had to build a new UI for every appliance. And finally, they had to create new recipes for an appliance to work with the appliance firmware and app.

Limited cross-brand connectivity was another issue. Because each brand had a custom app and entirely unique firmware, a brand’s appliances could only communicate with another brand’s appliances through the Fresco app. Harris and the Fresco team knew that to achieve the promise of the smart kitchen, this would need to change.

It was around the same time they realized this approach was not scalable that Harris and the rest of the team started discussing the evolution of the Fresco platform with one of the company’s advisors, Steve Horowitz. Horowitz, who was added to the board when his firm invested in Fresco (then Drop), was with Google during the early days of Android and helped lead the engineering team that developed what would become one of the world’s dominant mobile operating systems.

In 2021, the company went back to the drawing board and started to rethink how they could build a more scalable platform that didn’t require building entirely new custom apps and delivered on the promise of true appliance-to-appliance interconnectivity. To achieve this, the company began working on what Harris described as a universal firmware and universal appliance UI that would work with all appliances connected to the Fresco platform.

Shots from the new Fresco/Instant Brands App

According to Harris, getting there required a step back to examine the commonality across appliances and a reimagining by the company of how they view the universe of appliances in the kitchen.

“We used to build appliances by their category, like stand mixer, oven, blender,” said Harris. “But we actually realized that we needed a sort of universal communication layer between recipes and between appliances.”

Harris says this step-back enabled them to realize that there were 77 common cooking capabilities in the kitchen – such as bake, broil, steam, etc – and across these cooking capabilities, there were 8 ways to describe them such as time, temperature, and cooking speed.  

“Suddenly, we now had, architecturally, from a back end point of view and then from a customer UI point of view, this set of universal concepts that we can have to join recipes and appliances, and to have appliance control,” said Harris. “We rebuilt the consumer experience with this multi-brand appliance control that sits inside our appliance partner apps, to reflect this top-to-bottom experience that ultimately allows us to deliver on the vision of this universal appliance control that can orchestrate all of your appliances.”

This new approach would need buy-in from their partners. That’s because it would require each appliance to have a new firmware and a new app that included access to a common Fresco account alongside the appliance brand’s account. From a customer perspective, it’s this single Fresco account identification, that sits within the different brand apps, that would enable the cross-brand connectivity.

“When you set up an account and our partner apps, you agree to basically set up the dual account both with Instant Brands and Fresco at the same time,” said Harris. “And you agree to both the Instant Brands and the Fresco terms and conditions. And then that allows both the individual tenants for Instant Brands and each one of our partners, and then also the sort of interconnectedness that’s brought by Fresco.”

One obvious concern appliance brands may have with having a single Fresco account embedded within different apps to connect across brands is that customer data privacy is protected both for the customer and the individual brands. According to Harris, that privacy was their top priority in architecting their new platform.

“That’s a real, clear, hard-line,” said Harris. Harris said each brand would get its own “data warehouse for lack of a better term”, and they ensured that each set of data would adhere to all data privacy rules. Harris said that if a customer opts in, their data would be part of aggregate, anonymous data around usage to help appliance brands build better products. But, in the end, “nobody sees anyone else’s user data, and they only have their own appliances and their own users that they are interacting with.”

Beyond the new architecture to enable cross-device interactivity, Fresco also focused on redesigning the customer experience, implementing design tenets from the likes of Apple Watch and other Apple Carplay to help guide users during the cook. Unlike early guided cooking platforms, however, Fresco focused on making sure the user would have as much or as little assistance as they needed and made sure to clearly communicate information to customers in a way that ensure they were informed and had control.

In rethinking the customer experience, Harris gave a shout-out to Wired writer Joe Ray, whose review of the Drop/Fresco platform gave them clarity on what they needed to focus on. 

“Joe Ray did an amazing job of calling out the issues with the experience we’ve built. And that was obviously a catalyst in the process, in really assessing the underlying data, and for to ask ourselves if we are delivering on our promises.”

According to Harris, the complete rebuild of the code base was a long and difficult process, but it was a necessary one given the direction of the smart home and smart kitchen. He pointed to Matter (he says Fresco will integrate as devices become Matter-compliant), and how all the big smart home brands were aligning around the standard. However, kitchen products, he pointed out, were fundamentally different and needed a platform like Fresco.

“This is where the future is, this is what Matter is building,” said Harris. “All of these appliances starting to be able to work together in any location. We’re just accelerating that we’re delivering it today, instead of waiting years before that Matter becomes a reality.”

December 13, 2019

Instant Pot and Drop Partner for New Guided Cooking Recipe App

Instant Brands, the company behind the Instant Pot, and Drop, which makes smart kitchen software, today announced that the they have developed and launched a new Instant Pot recipe app.

Available for both Android and iOS, the new Instant Pot recipe app will feature roughly 1,000 recipes for Instant Brand appliances such as the Instant Vortex Air Fryer, Instant Ace Blender, and, of course, the full line of Instant Pot pressure cookers. The app will include step-by-step guided cooking recipes powered by Drop that adjust accordingly based on the number of people being served as well as ingredient substitutions.

One Drop feature this new Instant Pot will not have is device control. So while the Instant Pot app will walk you through the steps of making a particular recipe, it won’t allow you to, say, automatically turn on an Instant Pot from the app’s recipe. (Being at the device itself is probably a good idea for something like controlling a blender.)

Powering the Instant Pot app is another nice feather in the cap for Drop. The company announced an integration with Thermomix, another popular standalone appliance, last month. Drop also has deals with Bosch, Electrolux, GE Appliances, and LG Electronics using its software, the Instant Pot has a massive installed base of millions of appliance owners. Those appliance owners are also vociferous in Facebook groups, so if the Instant Pot app works well (or doesn’t), believe me that community won’t be shy about sharing their experience online.

The new Instant Pot recipe app launches today, those using the older version of the app will be migrated to this newer version.

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