Instant Pot parent company files for Chapter 11 bankruptcy

Dive Brief:

Instant Brands, the company behind Instant Pot, Pyrex, CorningWare and a handful of other popular kitchenware and houseware brands, filed for Chapter 11 bankruptcy on Monday. President and CEO Ben Gadbois said in a statement that “tightening of credit terms and higher interest rates impacted our liquidity levels and made our capital structure unsustainable.”
The company said in court filings that it has liabilities and assets ranging from $500 million to $1 billion and 1,000 to 5,000 creditors. Instant Brands owes its top five creditors more than $38 million in total, court documents show. The company also said it had $512.3 million in outstanding principal funded debt obligations.
Existing lenders have pledged $132.5 million in new debtor-in-possession financing, which is subject to court approval. Instant Brands plans to stay in business during its Chapter 11 restructuring, which AlixPartners will lead. The company's entities located outside the U.S. and Canada are not part of the Chapter 11 case.

Dive Insight

The Instant Pot now seems almost as familiar and ubiquitous as the microwave oven. But the hugely popular cooking appliance is less than 15 years old, hitting the market in 2010. A laid-off software engineer from Canada invented the appliance because he wanted to make easy, healthy meals at home for his kids.

Less than a decade later, at the start of the 2018 holiday shopping season, Kohl’s said it was selling 60 Instant Pots per minute on Thanksgiving. The following year, a private equity firm merged the brand with the company that owns CorningWare and Pyrex. The company’s portfolio also includes Corelle tableware, Snapware food storage, Visions glass cookware, and Chicago Cutlery knives.

Instant Brands said its 2022 gross profit was nearly $139 million with cash flow of $9.2 million and EBITDA of about $57 million. In the first three months of 2023, the company had nearly $22 million in gross profit, almost $18 million in operating cash flow and about $6 million in EBITDA.

Sales of electronic multicooker devices like the Instant Pot hit $758 million in 2020. But by 2022, sales in the category fell by 50% to $344 million, The Wall Street Journal reported in March, citing market research company NPD Group. The Journal also reported in January that Instant Brands had hired restructuring advisers.

Over the past three years, Gadbois said the company has driven positive cash flow, entered new product categories, expanded its global footprint and improved how it leverages its global infrastructure. Gadbois also said the company has best-in-class consumer engagement through its digital ecosystem.

According to the company, 90% of American homes — and millions of homes globally — have or use an Instant Brands product. But despite that market penetration and the company’s recent achievements, which includes staying in business during the pandemic and the global supply chain crisis, Instant Brands said its debt-laden financial situation has become untenable.

“We are continuing to manage additional macro-challenges beyond our control that have impacted our business and affected our liquidity levels,” Gadbois said in a Monday letter to the company’s retail partners. “As a result, our capital structure – including our debt levels – is now unsustainable. In light of these issues, we have been engaged with our sponsor, lenders and other financial stakeholders to determine a path forward that best positions Instant Brands for its next phase of success.”

Illinois-based Instant Brands operates in several countries outside of the U.S., including Canada, Singapore, England, South Korea, Taiwan and China.