Barbecue Retailing: Past & Future — A Damn Good Year!
By Lisa Readie Mayer
By most accounts, 2015 was a good year for barbecue dealers; for many, it was the best in a long time. Retailers report a rebound in consumer confidence and a renewed willingness among customers to invest in grills and Outdoor Room products that add enjoyment to their homes. An increase in new construction and remodeling in some areas has further fueled growth in Outdoor Room projects.
Even many dealers seem to be reenergized. Their mindset is changing as well, from thinking of themselves as being in the “grill business,” to being in the culinary business. Instead of grill specs, their focus is on the food and engaging customers with discussions about grilling, barbecuing and smoking techniques and recipes.
Of course, every retailer’s experience is different. For some, sales were way up this year, while others had only a slight bump, or more rarely, flat or declining sales. Premium-priced, high-end grills and outdoor appliances were the ticket to success for some retailers; others found that customers were still conservative after the recession and are opting for more moderately priced, value lines.
Increasing consumer interest in charcoal-grilling and smoking has resulted in sales of solid-fuel appliances surpassing gas grills in some areas. In some stores, pizza ovens are selling like mad – in others, not so much. Likewise, pellet grills have caught on at some retailers, but not everywhere. The weather – that secret sauce that can make or break the key selling season – proved helpful in the areas where dry, sunny conditions prevailed, but hurt spring sales in many states due to wetter-than-average conditions.
Bottom line: 2015 barbecue sales were a lot like barbecue itself – it may have been different depending on your part of the country, but overall, it still tasted pretty darn good. Hearth & Home talked with barbecue and outdoor kitchen retailers across the U.S. and Canada to get their take on 2015 and their prediction for 2016. Here’s what some of them had to say.
By the end of the year, Penn Stone (store name), in Lancaster, Pennsylvania, will complete a 2,000 sq. ft. addition to the store’s original 4,000 sq. ft. space, housing an Outdoor Room display area complete with two functioning outdoor kitchens. But even with the challenges of conducting business during construction, 2015 was still an “excellent year” for the 10-year-old patio furniture, grill and outdoor living business near Philadelphia.
Company president John McGrann says he is seeing a growing trend in which customers are taking a “sensible and conservative” approach to outdoor kitchen investments today, opting for moderately-priced grills and fewer components – often a storage unit and a beverage cooler in lieu of a refrigerator.
“People start to do the math and they wonder if the more expensive items are worth it,” he says. McGrann says customers typically spend $2,000 to $2,500 on a grill (Delta Heat and AOG are his most successful lines), and between $12,000 and $16,000 for a complete outdoor kitchen project. He says many outdoor kitchen customers are still interested in pizza ovens, but preferences have evolved from pricey and hard-to-use custom-masonry units to the more affordable, stainless-steel, imported wood-fired ovens he now carries.
To grow sales, McGrann has tied in with a local cooking school and a craft-beer-and-specialty-pizza restaurant, inviting the chefs to teach classes in his store. “These events help showcase the products we carry, and plant ideas about what people can do in their yards,” he says. “They don’t always result in immediate sales, but I know that at least one pizza oven sale this year came as a result of an event last year.”
McGrann is bullish on 2016. “We see people finally investing in their homes and outdoor spaces again,” he says. “As we finish the positive changes to our showroom, we think we’ll become a regional destination and one-stop resource for Outdoor Rooms and outdoor kitchens. We expect to see continued growth.”
After Superstorm Sandy destroyed his store and much of the surrounding community three years ago, Michael Graziuso considered downsizing or even eliminating his brick-and-mortar showroom. But while distributing meals he had cooked on his store’s grills to flooded-out neighbors, the owner of Hot Concepts in Staten Island, New York, had a change of heart.
“An encounter with an Army reservist helping in the area totally changed my perspective,” he recalls. “The guy was praising the community for rallying to help each other, and I said to him, ‘We’re New Yorkers. We are strong, resilient and tougher than any storm.’ Right then I knew I owed it to my community to rebuild.”
Hot Concepts has come back stronger than before. Graziuso says post-Sandy business has been “like a seesaw, sometimes up, sometimes down,” but overall, sales are doing well since he reopened. “We’re probably even a little better than before Sandy,” he says. The hearth side of the business is rebounding fastest as customers buy fireplaces for new homes constructed in place of ones that were destroyed, or to replace fireplaces damaged by saltwater flooding.
Grills have been slower to come back, according to Graziuso. “Sales are decent – they’re okay,” he says. He is building outdoor kitchens again, but says they are “miniature” compared to those in other parts of the country, restricted by tight backyards. Still, Graziuso says every fireplace sale is an opportunity for him to ask, “Would you like me to take a look at your backyard, too?” He adds, “My goal is to get a fireplace in every home first, and then tell them about the other things we do. Gradually we will build our grill and outdoor living business back.”
He says one category is doing especially well: pizza ovens. “People are still buying them,” he says. “But, hey, the best pizza comes from New York!”
Thanks to sales increases in pellet stoves and inserts, as well as in gas fireplaces and log sets, business is up slightly for the year at Pennwood Home & Hearth in Pleasant Gap, Pennsylvania, a rural area in the center of the state. “Housing starts have been fairly strong and, as a result, we have done a lot of hearth work, which has helped our business,” says Jeff Bolze, president.
The news has not been as good on the barbecue and outdoor living front. “We are way off from last year,” he says. “We had only a quarter of the outdoor kitchen business we had last year, and we’re down on fire pits and outdoor fireplaces, too. High-end gas grill sales were down considerably, probably off 50 percent.”
Fortunately, bright spots include an uptick in sales of grilling accessories, as well as pellet and kamado grills. “Our grill sales now break out to 65 percent charcoal and pellet, versus 35 percent gas,” he says.
Bolze blames rainy weather in the spring for hampering early sales of outdoor living products, and says a lingering Pennsylvania state budget impasse is undermining consumer confidence in the area. “People are holding off (on discretionary purchases) to see what happens,” he says. “It’s not just us. Landscapers and builders I speak with have also experienced a decline in outdoor living projects.”
The good news is that Bolze’s stepped-up marketing efforts, including in-store cooking classes conducted by sales manager Chris Combs, are helping to bring in customers. Bolze says they have seen a sales boost in the grills and accessories featured in the sessions. The store attracted 120 attendees for a barbecue competition it hosted as a fundraiser for the local fire department, and has even formed its own barbecue team, occasionally competing in cook-offs when time permits. Two years ago, Bolze also invested in an outdoor display area at the store to better showcase Outdoor Room products.
“All of this is helping,” he says. “We’re already more positive about next year based on the increase in outdoor kitchen inquiries we’re getting this fall. We’ve had a couple of pretty serious customers planning to do projects in the spring. We’re positive about the future.”
The Central Region
Anna Papp, owner of Outdoor Living Center in Covington, Louisiana, has seen sales grow every year of her 28 years in business, and this year was no exception. She says her customers are looking for “good, basic grills that are reliable, durable and moderately priced. They want quality,” she says. “They are not interested in bells and whistles, and they don’t want super-high-end grills with premium price points.”
The store carries lines from Holland Grills, Fire Magic, Napoleon, MHP and Bull, but its number-one seller is the Big Green Egg. Papp says the brand’s dozens of accompanying accessories, such as pizza stones, rib racks and roasters, are swift sellers, as well. Another solid growth area for the retailer is outdoor kitchens.
“We’re too small to offer full-service design-build capabilities, but we do a strong business selling outdoor kitchen components,” Papp says. She notes that most of her customers include a gas grill, refrigerator, sideburner and, increasingly, a charcoal kamado in their outdoor kitchen. The store offers modular, stainless-steel outdoor kitchen cabinetry as well; however, Papp says those units are “not flying out the door.”
Television commercials and a frequent-shopper program for charcoal help attract and retain customers. Papp believes Outdoor Living Center’s sales will be even better next year, helped in part by the recent closing of the store’s biggest retail competitor. “In fact, we’re already seeing growth as a result,” she says.
Don Cary of All Things Barbecue in Wichita, Kansas, the retail store he owns with his wife Kathy, says growth has been “very solid” this year. “We will definitely be up a minimum of 50 percent,” he says. Sales of outdoor kitchens have really gained traction the past three years, according to Cary, who expects to see double-digit gains in the category for 2015.
He says the store does well with gas grills, but wood, pellet and charcoal cookers claim a bigger portion of sales. “Our number-one line is Yoder Smoker pellet grills,” he says. “We are also committed to sauces, rubs, accessories and fuel. Consumables are really big for us. The purchases almost become automatic for customers who keep returning to the store for them.”
Cary says many customers are introduced to these unique products through cooking classes in the store’s teaching kitchen. There is a full-time chef on-staff, as well as visiting guest chefs, who teach a wide range of topics and techniques such as grilled appetizers, holiday turkey and ham, competition-style barbecue, steaks, pizza, desserts and more.
“Cooking classes are a core of our business,” says Cary. “We feature our grills, accessories and seasoning products in our classes, and that drives sales and gets people excited about recreating the flavors and techniques at home. The classes help us engage and develop relationships with our customers.”
Next year, the retailer will be expanding into the space next door, adding a complete showroom devoted to the Outdoor Room. “We think this will really grow our business,” he says. “People buy what they see; photos and catalogs are not as effective. Our new space will have awesome outdoor kitchen displays to show products in the environment in which they are used.”
Cary expects the new showroom will also help sales of outdoor fire pits and fireplaces which, to date, have been underachievers. “We haven’t had much room to display or promote them,” he says. “I think next year will be our break-out year for all outdoor living products.”
Thanks to good weather in March and April, the sales season started early and paved the way for a “fairly decent year” at Outdoor Kitchen & Patio in Omaha, Nebraska, according to Rod Jasa. He says customers are most interested in quality grills with good warranties at mid-range prices.
“For us, $700 to $1,200 is the sweet spot,” Jasa says. The retailer is seeing an increase in natural gas grills, especially in new construction, but says infrared has not caught on with his customers. He notes that more people are opting for built-in grills, including them in outdoor kitchens, often alongside a charcoal kamado. He says sales of kamados, though still strong, dipped a little from last year, something he attributes to increasing competition in the category.
“The Outdoor Room is growing every year as people look to make their outdoor spaces beautiful, inviting and comfortable,” he says. Fire pits – especially gas models with glass mediums – have been particularly hot. “Sales have doubled or tripled every year for the past three years,” he says.
Jasa says having a year-round presence helps his grill business; the store is one of the few in the area to stock grills, year-round, and one of the only ones to carry barbecue parts. He credits excellent customer service as the store’s best marketing tool. “It’s our biggest and best advertising and generates a lot of referral business,” he says.
Jasa is projecting next year will be another good one. “We already put in orders for the same quantities,” he says, “or even a bit more for next year.”
Though sales got off to a slow start in April and May due to rainy weather, an excellent summer and fall made 2015 “a very good year for us,” according to Scott Horvath, president of O’Malia’s Fireplace & Outdoor Living in Carmel, Indiana. “Sales of patio furniture and fire tables extended well into the fall,” he says.
In fact, Horvath says outdoor fire features including gas fire pits and fire tables, and bio-fueled lanterns have been the hottest trend in his store this year. “Customers love the beautiful look and they like the convenience of gas,” he says. He expects gas will continue to be strong as some communities in his area have begun banning wood-burning.
“Outdoor kitchens have definitely been another growth area for us,” he says. O’Malia’s collaborates with area landscape architects, providing grills, components, and consultation services on projects. “This is the best way for us to pursue outdoor kitchens,” he says. “There are a lot more landscape architects out there to partner with to grow our business, rather than trying to (offer design-build services or prefab or modular islands).”
Horvath says his customers are most interested in high-end grills – his best seller is the Twin Eagles line. “If you’re going through the expense of an outdoor kitchen, you might as well do it right,” he says. “It’s a very easy upsell when we point out the benefits of quality construction, and the expense involved in removing and replacing a built-in grill. It saves money in the long run.”
Other big sellers are kamados, which Horvath says are increasingly being included with a gas grill (with at least one infrared burner) in outdoor kitchens. Pizza ovens have been slower to catch on, he says. “We’ve sold a few, but not many this year.”
In 2016, Horvath will expand his store footprint with a new outdoor display area that will increase the number of outdoor kitchen vignettes he can showcase to give customers ideas. He will also increase patio furniture offerings. “We feel very positive about next year,” he says.
According to Henrik Stepanyan, president of Barbeques Galore, business has been great at the company’s 20 stores throughout California, Texas and Arizona. Regionally, he says southern California was by far the highest-performing and fastest-growing market, followed by Arizona, northern California, and then Texas, which suffered with bad weather this year, according to Stepanyan.
Barbeques Galore added outdoor furniture to its stores about a year ago, in partnership with Summerset Outdoor Living, and it proved to be the retailer’s hottest product category this year. Other big sellers were its branded Turbo line of grills, up 30 percent this year, and its Captain Cook value-priced line, says Stepanyan. Alternative-fuel grills, especially Green Mountain Pellet Grills and Big Green Egg kamados, were way up, as were premium Twin Eagles gas grills, according to Stepanyan.
The retailer experienced an exceptional year for outdoor kitchens, thanks to a new prefab island program offering three models ranging from a simple five-foot island with a grill priced at $1,199, to an eight-foot island with a grill, fridge and access doors for $3,499, all in-stock and available for next-day delivery, according to Stepanyan.
“This cookie-cutter outdoor kitchen business did really well,” he says. “It is very affordable and opens up the concept to a broader base of consumers but, ironically, it has increased custom outdoor kitchen sales, too. The affordable prices draw people in, but many ultimately trade up to one of our custom islands.” Outdoor kitchen sales have also been buoyed by the retailer’s new financing programs.
A creative new solution to cooking classes at the Irvine, California, store has been highly successful and improved sales. Instead of conducting cooking classes with its own on-staff chef, Barbeques Galore now leases the store’s kitchen to established cooking school, Cooking 101, to run the program. “They use all our spices, grills and accessories in their classes, but they bring in a different customer base, and it’s helped to grow our sales,” says Stepanyan. He plans to roll this concept out to a location in Phoenix in 2016. Other stores will be expanded or renovated in the coming year. “We’re very convinced it will be our best year yet,” he says.
Thanks to a rebounding economy and “massive growth” in new home construction in Colorado, Surroundings: The Store for Outdoor Living in Fort Collins experienced nearly 25 percent growth in 2015, according to creative director Joel Bulick.
“We are most definitely out of the recession; it reminds me of the ‘good old days,’” he says. It also helps that the unique destination store, known for beautiful, constantly changing outdoor kitchen displays featuring a pond, pergolas and fire features, attracts shoppers from all over Colorado and even neighboring states. “Outdoor living is a huge market now and fits in perfectly with the outdoorsy Colorado lifestyle,” he says.
According to Bulick, “Anything related to fire – such as fire coffee tables, dining tables and fire pits – is really popular. But only gas is allowed in our area.” He also notes that outdoor living projects are getting bigger, with customers ordering expansive outdoor kitchens and oversized sectional couches.
The outdoor kitchens — most of which are custom projects designed and built by the store’s landscape-construction sister company – typically include gas and charcoal grills, access doors, and refrigerators, according to Bulick. The retailer does well with high-end product lines such as Fire Magic, Twin Eagles, Alfresco Home, Summerset, Memphis Grills and Primo.
On the marketing end, new radio and television advertising campaigns helped drive traffic to the store this year, according to Bulick, as did showcasing outdoor furniture and fire features in six homes in the local Junior League Garden Tour. Under consideration for next year is a possible second retail location. “There is no question – we’ll have an even stronger year in 2016,” he says.
Bob Clay, president of Outdoor Living Concepts in Palm Desert, California, says his 2015 sales are tracking about 10 percent higher than last year. The retailer/wholesaler of grills, outdoor kitchens, patio furniture and hot tubs says, “I’m in a very high-end market and I’m seeing that consumers are back to maximizing projects. They’re doing grand plans again with big entertaining spaces, and they’re incorporating premium products.”
Clay says that from 2008 to 2013 his average sale was $7,000 to $10,000 for outdoor kitchen components; in 2015 it averaged $15,000 to $20,000. “For the first time in a while, we’re also doing some $30,000 and $40,000 projects again,” he says. “After the recession, people started realizing that life goes on. They seem to be more willing to live in the moment and enjoy life again.”
Clay says sales of fire pits are very strong. “We put a lot of emphasis on them even though we are in a warm area,” he says. “We’re also seeing a little traction with pellet grills and kamados.” He says pizza ovens “have hit the checklist again” and are trending up, particularly Alfresco’s new pizza oven (the Fornetto) and Woodstone’s premium pizza ovens.
Next month, Clay will add 3,000 sq. ft. more space to his current 45,000 sq. ft. showroom, giving him room to display more grill lines and more outdoor kitchen vignettes. In addition to serving retail customers, Clay’s “destination store” acts as a showroom for clients of his many wholesale customers, including landscape architects, pool builders and general contractors throughout the region. “I believe we will continue to grow in 2016,” he says. “But it’s an election year and there’s a lot of turmoil in the world, so who knows.”
Mike Black, president of Capital Iron with three locations in Victoria, British Columbia, says 2015 was a “pretty amazing year.” Patio furniture was “way up,” helped by sales of more than 20 containers of direct-import patio furniture in the last year. While offerings ranged from a $79 bistro set to a $9,000 premium collection, Black says customers were looking for prices in the $800 to $2,000 range.
Grills were also “very strong,” up about 18 percent over last year, according to Black. Brand offerings include mid-priced Weber, Napoleon, Broil King, Kamado Joe and Jackson Grills, high-end Alfresco, Lynx and Twin Eagles, and even super-premium Kalamazoo. But $1,000 to $1,500 seems to be the sweet spot, according to Black. The retailer keeps grill displays up all winter, something that he says gives him an advantage, since local Big Box competitors don’t carry grills year-round.
Although 90 percent of his grill sales are freestanding units, Black says built-in outdoor kitchens are growing. “But we keep it very simple here,” he says. “Kitchens tend to be smaller.” His stores offer custom outdoor kitchens with frames built by an in-house welder, and they also supply components for landscape architects’ outdoor kitchen projects. Other trends include charcoal grills, kamados, fire pits and fire tables. “The fire features are really taking off,” says Black.
The retailer is “cautiously optimistic” about 2016, noting he has upped patio furniture orders, and to a lesser degree, grill orders, for next year. “Our biggest challenge is the dollar,” he says. “The Canadian dollar has declined 30 percent in the last two years. Our barbecue suppliers are averaging 10 to 12 percent cost increases that were not put through in 2015, but we’re seeing them now. I’m not sure whether this will cause people to sacrifice quality for price, but it will be up to us to educate customers about value.”
Febian Frempong, owner of Sobie’s Barbecues in Toronto, is already feeling the effects of the weakened Canadian dollar. He says it contributed to what he describes as a “very challenging year” with sales off 15 to 20 percent. Increasing competition and decreasing margins are other factors hurting his business, according to Frempong.
“Six new dealers have opened in my area recently,” he says. “I feel like manufacturers and distributors are not respecting territories. There’s too much competition. It’s saturated. And with grill margins slipping from what was once 30 percent to now 19 or 20 percent, it’s hard to make a living.”
The weather didn’t help either. “Spring and early summer were wet and cold,” he says. “And in Toronto, once September comes, people stop thinking about outdoor living.”
There were some bright spots, however. Frempong says smoking is catching on, leading to increased sales of charcoal grills and smokers. Sales of built-in grills and components are picking up as more customers incorporate outdoor kitchens in backyard renovations. Frempong also is supplying more landscape architects with outdoor kitchen components. He is hopeful about 2016 and plans to look for new product lines at the HPBExpo in March to help him compete in the marketplace.
“We started out really strong in the spring,” says Rick Bloye, owner of Outdoor Luxury in Aurora, Ontario. “People had cabin fever and at the first hint of warm weather they started planning outdoor living spaces.” But by August those gains were offset by uncomfortably hot weather that kept people indoors in air-conditioned comfort, according to Bloye. “So, in the end, it looks like 2015 will be on par with 2014.”
For 15 years Outdoor Luxury offered start-to-finish design-build services, as well as grills and components for outdoor kitchens. But recently Bloye has been shifting the focus from traditional retailing to partnering with landscapers and builders on outdoor kitchen projects. “We began to realize we were limited in the number of jobs we could take on,” he says. “And landscapers and builders viewed us as the competition, so they were reluctant to work with us. About three years ago we began thinking about how we could turn our competitors into customers.”
The change has been good for business. Bloye now partners with many area landscape architects, designers and builders, providing design services, concept drawings with utility placement, construction of island mainframes, and all grills and equipment. “We pay them a percentage of the job and they can use our showroom with their clients,” he says.
Bloye says desire for outdoor kitchens is stronger than ever among Canadian consumers, and they are willing to spend money on upgrading and enhancing outdoor living spaces. “Canadians are ignoring the fact that they live in a cold climate and embracing this concept,” he says.
According to Bloye, his average project now runs around $20,000 to $25,000, although his biggest sale this year came in at $60,000. He says outdoor kitchens commonly include a charcoal kamado, a drop-in ice chest, and a beverage station, in addition to a gas grill. Solid-roof pavilions are outpacing pergolas, and fire features and infrared heaters are included on most every job.
Another trend is the growth of Outdoor Rooms in downtown Toronto apartment and condo buildings. “It’s mandated that the builder include green space on these properties, so we’re getting involved in more outdoor kitchens in common areas, as well as penthouse and private terraces,” he says. “We did six private terraces this year. It’s a fantastic growth area for us.”
Bloye believes 2016 “will be great,” thanks to a growing roster of landscape and contractor partners. He has concerns, however, about the impact of the dollar on the price of high-end grills he sources from U.S. vendors.