Instant Brands, maker of Instant Pot and Pyrex, files for bankruptcy

Chapter 11.

The company blamed tighter credit and higher interest rates as contributing factors in the filing. But the company added that it has seen rapid growth since the start of the pandemic, entering several new product categories and expanding its global footprint. It listed more than $500 million in both assets and liabilities, and said it has received $132.5 million in additional financing from its existing lenders as part of its bankruptcy process.

So that quote makes me think that someone at the wheel must have an awful head for business, but this quote

Instant Brands was purchased by private equity firm Cornell Capital in 2017.

makes me think that another private equity snake curled around another victim and squeezed as hard as it could before it dislocated its jaw and began to swallow. Just like the misshapen, half-digested remains of Sears, K-Mart, Toys R’ Us, Bed Bath and Beyond, and so on.

Fake “pyrex” deserves to die.

Exactly. They deserve dissolution If their other products are as good.

Our Instant Pot is great. 100% agreed on fake pyrex, but we love our instant pot. As a consumer, I’ll speculate that their problem is that we bought the pressure cooker for, what, $40? $60? some years ago, and, well, we don’t need anything else from them. You’re not going to get exponential growth with that.

Tupperware is another company with a somewhat iconic product that apparently is in trouble. I think in their case the product is fine, but their approach was way too limited and rooted in a 1960s Tupperware Party mindset.

I mean, durable high-quality plastic storage containers in a variety of sizes and shapes? That sounds like something that with the right approach could be golden.

Outside of the equity company shitting up the deal, the pandemic played hell with a lot of business projections by pumping them up well over their normal growth. People bought Instant Pots like crazy during the pandemic because it was home cooking (which became a fad during lockdown) but easy like a crock pot and a lot faster. Christmas sales of Instant Pots were nuts.

Now people are back to restaurants being open and many folks discovered an Instant Pot can’t really cook everything. (It’s a great product, but it has limits.) There isn’t a flood of lockdown folks buying Instant Pots and owners aren’t upgrading or buying as many accessories.

That makes sense to me. I bet the equity company saw the pandemic instant pot sales, and then expected to keep growing (exponentially, always exponentially) from there.

Maybe it’s apocryphal, but I saw someone on twitter saying the private equity guys had the company take out a $460M loan, paid themselves like half of that, and now the company is miraculously in trouble.

Even if it’s not true, treating the pandemic bump like it would last forever is obviously malpractice on its own.

They acquired the company through a leveraged buyout, so the company was definitely burdened with a large loan from day one.

For me and my brothers and sisters, the glass-bottomed Korean food containers that they sell at Costco completely replaced Tupperware. Aside from any BPA fears or plastics leaching into the food, Tupperware is a nightmare to clean. Even when you scrub and scrub and scrub it still looks and feels greasy.

Oh, yeah, there are definitely flies in the ointment but I’m just saying the company’s basic product–plastic containers with a variety of uses–seems like a solid niche. The fact that they haven’t iterated much or put money into R&D (I’m assuming, here, which I know is dangerous) seems to say that they relied too much on their social and cultural positioning and not enough on actual product performance.

Other companies came in with cheaper versions that can still last for several years but are readily available and can be treated as semi-disposable due to the cost. I have to imagine those really ate into Tupperware’s profits. Our cabinet of storage containers are either glass, to store things that will likely either be microwaved or toaster ovened directly, or those cheaper Ziploc or Rubbermaid containers for the rest. We maybe have one legacy Tupperware thing in there?

Tupperware recently tried to pivot to some in-store retail sales via nostalgia appeal.

As far as I’ve read, it hasn’t gone well. Their old designs are just impractical (round bowls, goofy lids) compared to everything else that sits better in your fridge and the prices couldn’t compete against the stuff Ziploc, Glad, and Rubbermaid etc sells. And as @abrandt points out, if you want something nicer, you get the glass-bottom containers.

I just can’t help wonder how a company that was famous for storage containers didn’t, you know, invest in upgrading and evolving their core business over the years. Of course, I also suspect their core business was mired in nostalgia from the get-go.

Classic commercial hubris. Nobody will ever compete with our brand!

Details on the loan the private equity firm took to pay themselves:

In April 2021, in the midst of that sunny period, Instant Brands took on a $450 million term loan, according to the filing. That debt refinanced $294 million in existing debt, including $100 million tied to the 2019 acquisition, and helped support a $245 million dividend to the shareholders, according to a Moody’s rating of the loan in May 2021.

Essentially none of the debt, then, supported investment in the business.

source, paywalled