Why didn’t the BBQ Boom during the pandemic built a healthier outdoor cooking industry? And how are companies going to cope with the looming BBQ Bust?
The global pandemic forced many people to stay home. Restaurants closed dining room service. Prices and availability of foods fluctuated. And for many, finding things to do became an issue. Outdoor cooking, particularly pellet smoking, became the new, hot hobby. Sales of grills and smokers jumped. But as the pandemic wanes, we are entering the new normal, including returning to work, eating at restaurants, and traveling again. The furious pace of the BBQ Boom has ended.
Barbecue and grilling has gained global recognition in the last few decades. But the pellet grill segment has seen the largest growth in popularity. In fact, for parts of 2021, searches for pellet grill cooking exceeded those for general smoking and grilling.
Search trends provided by Google
The charts above show Google searches performed for various subtopics in outdoor cooking. On the left is the chart for general barbecue and grilling searches. On the right is the chart for pellet grill-related searches. Most importantly, we can see the impact of the pandemic on barbecue, pellet grills, and pellet grill cooking.
In the summer of 2020, interest peaked as people settled into their new reality. As we will see further on, there was an increase in cookouts, grill purchases, and BBQ-related posts scattered across social media platforms. Clearly, a boom occurred.
However, just as quickly as these numbers rose, they returned to normal. Pellet grill fans looking at these charts will think that the popularity of pellet grills was much higher than before the pandemic. But remember, there is a large amount of overlap here, and pellet-related searches have replaced more general terms.
So many hurried to take advantage of this boom.
The BBQ Business Boom
By the spring and summer of 2020, interest in grills and smokers had reached an all-time high. Companies, both large and small, moved to take advantage.
The chart above is made by factoring together searches related to outdoor cooking equipment. They reflect the research done by Google users over the last decade. During this period, the landscape changed greatly. Pellet grills and griddles took market space away from gas and charcoal grills. But overall, the interest in the equipment remained consistent when you average the numbers together.
As people settled into the pandemic lifestyle, interest in grill and smoker ownership increased. You can see this peak in the spring of 2020. Suddenly the barbecue industry was hot, and everyone wanted in. Call it what you want, greed or opportunity. Companies sprinted to the next level.
Mergers, Acquisitions, and Public Offerings
For most of its history, grills and smokers were made by small, family-owned businesses. Even Weber remained in the hands of the descendants of George Stephen until 2010. That is no longer the case. While private equity firms have gobbled up several businesses in the last two years, the acquisition by other outdoor cooking companies has driven the news.
- Primo Grills acquired by Empire Comfort Systems – November 2019
- Barrel House Cooker Company acquired by Pit Barrel Cookers – March 2020
- BBQGuys acquired by Brand Velocity Partners – August 2020
- Weber acquires June – January 2021
- Dometic acquires Twin Eagles – February 2021
- B&B Charcoal acquired by Duraflame – March 2021
- Otto Wilde Grillers acquired by Miele – March 2021
- Pacific Coast Manufacturing acquired by BBQGuys – April 2021
- Traeger Acquires Meater – April 2021
- Traeger goes public – July 2021
- Weber goes public – August 2021
- Masterbuilt (Kamado Joe/Char-Griller) was acquired by Middleby Corporation – December 2021
- Blackstone goes public through acquisition – December 2021
- Rec Teq was acquired by Norwest Equity Partners – February 2022
- 200 Fahrenheit and OFYR merge to form Fyron – February 2022
- BBQ Guru acquired by FlameBoss – July 2022
Will this continue? On the one hand, with the boom over, investment firms and general brand companies may steer clear of the BBQ industry for a while. On the other hand, weaker sales, higher inflation, and higher interest rates might make some companies a bargain.
The End of the Boom
In August of 2021, Weber, the largest and most recognized brand in outdoor cooking, became a publicly traded company. After a decade under private equity ownership, Weber thought the time was right to take the company to the next level. A year later and we know that this was all an illusion.
On July 25, 2022, Weber announced that their CEO of four years, Chris Scherzinger, would be stepping down and that the company’s outlook for the remainder of the year was far from stellar. Weber warned of layoffs and cutbacks to deal with mounting debt, rising interest rates, and, more importantly, declining demand for their grills.
Weber’s warning came a week after Traeger announced layoffs, the discontinuation of their food delivery program, and the postponement of the construction of their factory in Mexico. Like Weber, Traeger cited declining demand and rising costs for the slowdown in their business. (See my article Weber vs Traeger for more information.)
So, what went wrong?
The Boom that Wasn’t
Interest was up. Sales were up. But so were the costs. Both Weber and Traeger addressed the challenges of logistics, shipping, availability of parts, and dramatic increases in the cost of materials. Both tried to downplay the long-term effects. Companies across the industry raced to meet demands no matter the cost. Sales boomed, but profits didn’t.
The cost to build, import, and distribute grills and smokers increased dramatically during the pandemic. But then again, costs had risen well before the pandemic. Tariffs imposed in 2017 and 2018 on stainless steel and gas grills put many companies in a pinch. This is particularly true for higher-end grills (see “The Cookout Tariffs” for more information). In the outdoor kitchen market, prices increased by as much as 50%, and many companies are still months behind in delivering products.
And then the pandemic brought the logistics nightmare. Traeger CEO Jeremy Andrus said that the cost of shipping pellet grills from Asia had increased as much as 500% in a year. The boom increased sales, but higher production costs obliterated profits. When Weber and Traeger filed with the SEC to take their companies public, they used this temporary revenue growth to drive offerings.
Numbers like this ran across the industry. Recently, it was reported that Dansons (makers of Pit Boss and Louisiana Grills) experienced a 70% increase in year-over-year sales for 2020. That is an increase in sales of $365 million. Since Dansons is the largest seller of pellet grills (by unit), we can see how big the pellet boom really was. Of course, they too have announced layoffs.
The BBQ Bust
The outdoor cooking industry saw one of its best years in 2002, post 9/11. Travel was down, and people stayed closer to home. Marketers called it nesting. Sales were strong, but there was a downside. In mature markets, like North America, grill and smoker sales didn’t grow much. Most sales were for replacements grills and smokers. After the 9/11 BBQ Boom, grill sales dropped and only returned to normal levels a few years later.
The pandemic boom was much larger than the one in 2002. Lots of grills were sold to first-time buyers. And, those who made recent purchases won’t be replacing them for several years. We can expect grill sales to diminish in 2022 and 2023. Perhaps in 2024, sales will return to pre-pandemic levels. While we can expect grill and smoker sales to be weak for a while, what about everything else? Surely, increased interest will be good for every other part of the industry. Let me caution you on that.
Many say that grills and smokers sold during the pandemic will translate to future purchases of accessories, fuel, and foods. Sure, the expanded interest brought many people into the industry, but BBQ has become heavily saturated, from makers of sauces and rubs to content creators. All are competing for a piece of a shrinking pie, and yes, it is shrinking.
Back to Normal (The New Normal)
The charts above show search interest, and we can see that 2022 looks much like 2019. This is also reflected in traffic on the top 10 BBQ websites.
This chart shows the total traffic of the top ten BBQ blogs from 2019 to today. I should point out that these are not the same sites over time but included sites in the top ten for each month graphed. Traffic for these sites surged during 2020 and 2021 but has largely returned to their pre-pandemic levels.
It isn’t all bad news. Barbecue and grilling have remained popular topics for decades and will remain so for the foreseeable future. The biggest challenge for anyone seeking to make money in outdoor cooking is an excess of competition. More than 50 BBQ blogs had launched during the pandemic. Caterers and competition cooks introduced rubs and sauces. Restaurants started or expanded shipping services.
Life after the BBQ Boom
When booms end, it takes time for the excess competition to leave the space. Barbecue is no different. As companies like Weber, Traeger, and Dansons announce layoffs, the rest of the industry faces some tough decisions. It will simply take time for everything to level out again. Companies that spent heavily on growth during the pandemic will be hit the hardest as they curtail costs. Those that secured their foundation and saved for the future will survive the post-pandemic free fall.