Retail & Consumer industry updates
Sign up to myFT Daily Digest to be the first to know about Retail & Consumer industry news.
Cooking on an outdoor grill is an ingrained part of American culture. Two out of every three adults own a barbecue or a smoker. Hot demand has only intensified during the pandemic, with extra time at home and plenty of outdoor socialising. Manufacturers and retailers have taken advantage of the sales surge to go public.
Weber, the world’s leading outdoor grill manufacturer and its smaller rival Traeger have both raised money via initial public offerings in the past month. BBQGuys, the online BBQ products retailer backed by retired American football stars Eli and Peyton Manning, went public through a blank cheque merger at a valuation of nearly $1bn.
Wall Street is all fired up about the sector. Americans spent nearly $6bn on grills, smokers, camping stoves, accessories, and fuel in the 12 months to June. That was 29 per cent higher than the year before, according to NPD Group, a market research company.
Weber, whose iconic domed “Kettle” charcoal grill helped popularise the backyard grilling craze in America when it launched in 1952, reported a 62 per cent rise in sales for the six months to the end of March. That followed a healthy fiscal 2020. At Traeger, which specialises in pricey wood-pellet cookers, first-quarter sales doubled after jumping by half in 2020.
Expecting another course of sizzling sales might seem optimistic. Although Weber had to cut the size of its IPO, the shares are comfortably above their revised price. Traeger stock, priced at the top end of their range, have delivered a 25 per cent return since their debut at the end of July. Its valuation has swollen to over 100 times last year’s earnings. Weber trades on a modest 9 times.
Presentation might explain the performance difference. Weber offers a wide range of grills costing from as little as $40 to over $1,000. It has mass appeal. Traeger’s cloud-connected cookers make it a niche proposition. All cooks need the right equipment, but the best of them prefer simple kit, priced accordingly.
Our popular newsletter for premium subscribers is published twice weekly. On Wednesday we analyse a hot topic from a world financial centre. On Friday we dissect the week’s big themes. Please sign up here.