Food For Thought
By Lisa Readie Mayer
All in all, it has been a pretty good year to be in the barbecue business. This outcome was certainly not a given from the beginning, however. By most accounts, sales got off to a slow start thanks to lack of cooperation from Mother Nature, who decided to let winter stick around well beyond its welcome in the Northeast, cranked up the thermostat in the West, and unleashed relentless early spring rains in the Midwest. But she redeemed herself, and most manufacturers we interviewed have been pleased with their results to date.
Buoyed by growing media attention and consumer interest in smoking and other types of solid-fuel, live-fire cooking, segments such as charcoal grills, pellet grills, smokers, and multi-fuel hybrids are enjoying a heyday. Moderately priced lines of gas grills made with good-quality materials and construction, but fewer bells and whistles, are proving to offer a compelling value proposition for consumers and are selling well.
However, that success may be starting to cannibalize the premium gas grill business, some fear, as consumers opt to forgo pricier models and “buy down.” These lower sales tickets may begin to have a negative impact on retailers’ revenue.
Still, premium grills are firmly entrenched in the Outdoor Room space, where consumer interest remains high. Outdoor Room-related sales are expected to grow as more builders include outdoor kitchens as standard, or offer them as options on new construction, say the experts. More than ever, manufacturers are recognizing that food sells grills, and are investing in recipes, how-to videos, and instructional supports on their websites and social media platforms, and tying in with culinary partners, events and experiences.
Read on for more insights from our panel.
|Frank Mello||Tim Elder||Ardy Arani|
|Jeff Thiessen||Wilson Hawkins|
Frank Mello of Bull, a manufacturer of quality grills, pizza ovens, outdoor kitchen components, islands, and other outdoor room products, says, for now, the company’s primary customers are Baby Boomers with disposable income, but they are preparing for the future wave of Millennial high-end grill buyers.
Hearth & Home: How is 2017 looking so far and how does it compare to 2016?
Frank Mello: “The year started off slow for the first couple of months, and we thought, “uh oh.” Since then it’s really picked up and has been a very good year.”
To what do you attribute the slow start? Was it weather? Politics?
Mello: “I think part of it was that our business was very strong in late 2016, so that impacted the early months of 2017. We had to wait for that product to sell through. For sure, no matter what your politics are, there was a lot going on in the country at the beginning of the year. There was a bit of uncertainty regarding the new administration.”
With that in mind, what is the general mood you’re seeing now among retailers and consumers?
Mello: “Well, the stock market is doing great, so for those who have money, they’re happy about that. Consumers are generally in a positive mindset regarding spending, and specialty retailers seem to be doing well.”
Are there any products or price points that are selling particularly well?
Mello: “We’ve got a couple items this year that have experienced really large bumps in sales. One of them is our outdoor-rated refrigerator. We completely redesigned it this year and it’s available at a super-competitive price point. We can’t keep it in stock. That’s been a nice surprise.
“In addition, pizza ovens have gone crazy again. They were kind of stagnant for a number of years, but people are buying them now. I think one reason for that is consumers’ desire to create an ‘experience.’ Making pizza is very visual. Guests gather around, watch the fire and the cooking of the pizza, and want to get involved in the process. It’s a fun experience. We’re planning to introduce a gas pizza oven, which we expect to be very popular. So, we expect this trend to continue.”
Pizza ovens fit in with the growing trend of live-fire cooking. Are you seeing that same type of growth in your charcoal grills, as well?
Mello: “Charcoal grilling and smoking are not going away. You see the techniques more and more on the cooking shows, and now pellet grill companies are investing a lot in marketing to educate consumers about the flavor benefits of cooking with wood. All of this is elevating consumer interest and helping to drive sales of charcoal grills, smokers, pizza ovens, and pellet grills.
(Laughing) “I don’t understand those (convection-style) grills where the flame never comes in contact with the food. That cracks me up. You need the fire to touch the food to get the carmelization and flavor. Fire is part of the experience of grilling, smoking, or cooking in a pizza oven. It’s the essence of grilling and barbecuing. The fire creates the flavor; otherwise you might as well cook indoors in your oven.
“We’ve had our Bison charcoal grill a long time now and it continues to be a good, steady seller. We just redesigned it to eliminate air leaks for better smoking performance, so we think it will do even better. You can put it on a cart or build it in.”
Speaking of built-ins, what’s happening in the Outdoor Room segment? What trends are you seeing there? Are you seeing Outdoor Rooms spread to a broader range of demographics, such as Millennials?
Mello: “Interest in the Outdoor Room is very high and sales of our built-in grills, components and islands have been strong. But, interestingly, we have seen sales of our high-end cart grills skyrocket this year. We changed the style of the cart, and added a sideburner option, and that has helped attract attention and grow that area of our business. There is a lot of great cart business to be had at the mid- to upper-price points.”
Are you attracting a Millennial customer with the cart grills?
Mello: “Somewhat. The carts do draw Millennials, but also Baby Boomers, too. We’re catching both ends because both groups want mobility at this stage of their lives. Millennials are just starting to buy their first homes, but they know they will eventually be moving to upgrade their homes. Baby Boomers are looking to downsize, so they’re moving, too. Because of that, both Baby Boomers and Millennials appreciate that cart grills are mobile, so they can take it with them. With an outdoor kitchen, they know they’re going to have to leave it behind if they move.”
Are Millennials a growing part of your customer base?
Mello: “Based on the facts, and what I see with my own kids, Millennials are not really my customer right now. They’re still trying to buy their first house, and don’t have the money yet to invest in an outdoor kitchen with a built-in grill, a pizza oven, and other appliances.
“The HPBA study shows that the average consumer who is spending $2,000 or more on a grill is 56 years old, with an average household income of $230,000. It also shows 70% of those buyers own their own homes. That’s my customer. I think we’ve got another 10 years to go with Baby Boomers before Millennials step in.
“That being said, last year we introduced our line of Bel Air grills under the Bullet brand name. They have a retro, vintage vibe that reminds you of a 1950s Chevy, and they come in fun, glossy colors – red, bright blue, and cream. This year we plan to introduce a vintage-looking fridge to the line to match. The Bel Air line is at a lower price point and is more approachable for Millennial customers.”
Let’s talk about retailers. They are facing a lot of challenges right now. Give us some insight into what you’re seeing at specialty dealers today. What are your best dealers doing that sets them apart and makes them successful?
Mello: “We have about 40 really strong specialty dealers. They are good, solid retailers and they understand their customers. Some have been in business at least 15 years and others are new to the game, but what they have in common is that they are all aggressive marketers and are constantly doing creative things to attract customers and sell product. They participate in the promotions we offer to help them with marketing, and are always looking for deals and angles in their market. Retailers have to be aggressive marketers to be successful today.”
What else is new at Bull this year?
Mello: “We have a new marketing, advertising and promotions team, as well as a new culinary brand ambassador – Chef Amy Amberle-Rogan – who has taken over our recipe blog and is doing a great job. And our marketing manager, Wade Fortin, has a chef background and is a two-time World Burger Battle Champion, so we have a lot of food experience on our team.”
Why is that important?
Mello: “It’s important to focus on food because, if you look at the HPBA consumer survey, it shows the consumer who is spending money on a premium grill is trying to create an experience. Food is always at the center of every cooking or entertaining experience in the Outdoor Room. That’s been our battle cry for years.”
What issues are you seeing in the industry today? What challenges are manufacturers and retailers facing?
Mello: “Those of us selling built-in grills are dealing with new CSA standards requiring sideburners to be designed so the control knob is not located under the sideburner’s lid. The knob cannot be covered. This impacts many grill manufacturers.”
This is a safety issue?
Mello: “Yes, in fact we are undertaking a really big push on safety education this year. As more contractors or even do-it-yourselfers get into building outdoor kitchens, they don’t always know how to design and build them properly with regard to safety. For instance, they’re not always venting outdoor kitchens correctly, or they store two propane tanks in the grill island. It’s important for the industry to take a leadership role. We want consumers to be safe, and we don’t want any negative associations with outdoor kitchens.”
Any other thoughts to share with readers?
Mello: “In my opinion, HPBA did a really great job with the consumer research study this year. They collected valuable information on the category of consumers spending $2,000 and up on a grill, which had been lacking in earlier studies. That is the customer many of us are trying to reach.
“One of the really interesting findings that came out of the study this year shows that the high-end consumer who shops at brick-and-mortar stores doesn’t really want to interact with salespeople. This is part of a larger trend that shows consumers don’t trust salespeople, and increasingly prefer to do their product research online. That tells me manufacturers and retailers have to have a first-rate, informative website that makes it easier for consumers to do their research, and easier to find a dealer when they’re ready to buy.”
|L to R: Tim Elder and Wes Aiken.|
By offering high-quality, high-performance, stainless-steel grills at reasonable prices for more than two decades, Summerset Professional Grills has helped define the “quality-and-value” category of grills. Today, it offers an expanded range of grills and outdoor kitchen components in a wide range of price points, including a premium, gas-charcoal-wood hybrid, the American Muscle Grill.
Hearth & Home: How is 2017 looking so far, and how does it compare to 2016?
Tim Elder: “This year got off to a challenging start. We experienced weather-related issues on both coasts early in the season, which delayed the start dates for many of our dealers. The rains just kept coming and coming. This was particularly true for dealers east of the Mississippi, but it also impacted dealers on the West Coast, as well.
“The weather severely delayed contractors and the work in the pipeline kept getting pushed back. We had contractors working on islands in August that should have been completed in March. But we have been pleased with the recovery in sales later in the spring and summer. Even Texas is doing surprisingly well, considering the price of oil, and the Midwest is coming back, too. We have capitalized with special incentives and sales to help position us for additional growth through the fall.”
What is the general mood among retailers?
Elder: “Positive! Even the few dealers who say traffic is down are still positive about the year’s outcome.”
Are you seeing trends regarding what’s selling and what isn’t? Which price points are doing best?
Elder: “We have seven models in our grill lineup – Sizzler, Sizzler Pro, TRL, TRL Deluxe, Alturi, our Builders Grill, and the American Muscle Grill. Our bread and butter is the middle of our lineup – the Sizzler Pro and TRL hit it out of the park every year.”
What makes them your most popular grills?
Elder: “I think it’s the features you get for the price. These grills have cast-stainless-steel burners, heat-zone separators, interior and exterior lights, which everyone wants these days, all at a very reasonable price. TRL was our number-one seller for years, but this year Sizzler Pro has overtaken it.
“They are very similar in terms of features, but they look different. The TRL is more of a traditional, vertical look with squared-off edges, while the Sizzler Pro is more rounded. Also the TRL fits a Turbo grill opening, so we get a lot of sales from people who are replacing those grills.”
What’s happening with the multi-fuel hybrid grill you introduced a couple years ago?
Elder: “The interest in the American Muscle Grill has been overwhelming. It’s been a thrill for me to see the excitement and enthusiastic reception it’s receiving. Everyone from chefs to barbecue experts to backyard grillers like myself love this grill and all it allows you to do. Larry Olmsted wrote about it in Forbes magazine and said, ‘If you have room for just one grill, look no further than this masterpiece.’ We added a 54-in. American Muscle Grill to the line a month ago and it sold out immediately.”
Did the Forbes article put this grill on the map? Did it have a big impact?
Elder: “The Forbes article was a very pleasant surprise. It was a pretty big deal for us. When it ran, I saw a big uptick in requests for information on our website. Those inquiries come straight to me. It gives a company a lot of credibility when you get media coverage like that.”
Do you have any plans to introduce other hybrid grills or even a charcoal grill?
Elder: “I don’t see anything charcoal-related on the horizon for us, but we are definitely taking a look at expanding the American Muscle Grill line. It’s something we’re taking a look at.”
Do you think this interest is part of the larger, growing trend of live-fire cooking?
Elder: “I think cooking over a live fire is once again pretty popular. I open my computer each day to so many Muscle Grill requests I can’t begin to answer them like I wish I could. I also see a lot of interest in pellet grills. I find this interesting because cooking over a live fire is pretty much hands-on cooking, whereas pellet-grill cooking is pretty much (set it) and forget it.”
So, no plans to introduce a pellet grill?
Elder: “We don’t have anything on the horizon for a pellet grill. What we’re trying to do as a company is focus on quality, U.S.-made products. Although our two top sellers are not made in the U.S., we are looking ahead with American-made products.”
What trends are you seeing in Outdoor Rooms or outdoor kitchens?
Elder: “We have seen a growing interest in cart products in addition to our built-ins, which have been very strong sellers for years.”
I have heard from other grill manufacturers that their cart business has been growing this year, too. Is this a new trend emerging? Who’s buying carts and why?
Elder: “There is a lot of interest in the Midwest and East for carts, and we’ve seen that business growing. It might be a trend, but it could also be explained because our overall presence as a company is growing in those regions, which generally tend to be bigger areas for carts.”
Are the cart grills attracting a Millennial-age customer?
Elder: “They may be. That’s not an audience we purposely targeted with carts. But you may have hit on something. I’m not real sure.”
Does growth in your cart business mean outdoor kitchens with built-in grills are declining or falling out of favor?
Elder: “No, there’s been no trade-off of one for the other in our business. Even with the growth, carts still represent only 20% of our grill sales. Our built-in business is growing at a faster rate than carts.”
What else besides built-in grills are being included in outdoor kitchens?
Elder: “What I’ve seen from my dealers is that they are selling bigger, more expensive islands. So, instead of the cookie-cutter outdoor kitchens, we’re seeing them put everything – including the kitchen sink (laughing) – in their islands. In many areas, the outdoor kitchen is the new center of the home instead of the indoor kitchen, and people want everything outdoors that they have in the indoors.
“We’re seeing more and more features like teppanyaki grills, beer tappers, nice under-mounted sinks, all kinds of refrigeration, ice makers, wine coolers, television sets that rise up out of the island. It’s really gone extreme with much more elaborate set-ups. And that’s happening everywhere, no matter the region of the country.”
Have you introduced any new products this year?
Elder: “As I mentioned the 54-in. American Muscle Grill is our latest introduction. We have seen interest growing for these larger and more upscale products. The closest hybrid-style grill on the market is four times the price, so there is a huge opportunity for our product to own the category. Our goal at Summerset is to provide high-quality options for consumers at all price levels. We have a few new items in the works for the coming year. Stay tuned!”
Did you add manufacturing space or increase staff over the past year to keep up with demand?
Elder: “We have made and continue to make significant investments in this area of our business. We recently expanded into a new state-of-the-art facility to support our growth strategy, and dedication to producing the American Muscle Grill and other American-made components. The space includes 20,000 sq. ft. for production and 50,000 sq. ft. for inventory, parts and materials. While many other manufacturers are moving production out of the country, we’re investing in American manufacturing and new jobs that will help the economy and support our growth strategy.”
What kinds of challenges are you seeing in the industry?
Elder: “Some changes include the growing number of major online dealers, and online specialists. We are still assessing this impact, but so far, we have been very pleased with the results and the number of consumers that they reach.”
Can you explain this a bit further? Does the Internet represent a big part of your sales?
Elder: “We’re seeing more and more businesses, that you wouldn’t normally think of as barbecue resellers, knocking on our door and wanting to carry our grills. The Internet is a great tool for teaching the consumer about a product. People are looking online and researching first, then going to the dealer to buy. It is a good partnering. Only about 12% of people that look at a product online actually buy online – most buy in stores. Of course, with the number of people researching online, 12% is a big number. But when you’re spending $5,000 on a barbecue, I think people still want to touch and feel it. They’re going to a traditional retailer for that.”
What are your successful dealers doing that other retailers could learn from?
Elder: “Say yes when you want to say no. Treat the customer fairly. I know it sounds cliché, but it is the one trait I see every day in the dealers that stand out. Service and warranty are also very important, and we take pride in both of these aspects of our business with a lifetime warranty and superior customer service.”
It’s been almost 40 years ago, Ed Fisher launched the Big Green Egg and built the brand through strong dealer-customer relationships, a creative, food-centric focus, and a dedicated community of enthusiasts known as EGGheads. Current CEO, director Ardy Arani explains how the company continues to set the bar as the category leader.
Hearth & Home: How would you describe your sales in 2017? Are you still sustaining the kind of growth you’ve seen in recent years?
Ardy Arani: “Yes, our sales are continuing to go very well. Last year we were particularly satisfied about the double-digit growth in our dealer base. We feel very strongly about supporting the independent-dealer network and our dealer growth in the U.S. has been phenomenal.
“We know our dealers have choices, but they analyzed the metrics and are choosing to go with Big Green Egg because they believe we offer growth potential for their business. We feel good about that. We’re also excited about our expansion internationally.
“This year we launched in Australia, Mexico and Israel. Australia exceeded our sales objectives for the entire year in the first six months. Our distributor in Israel is doing great, and Mexico, too. Twenty years ago an international distributor just needed to buy a container of EGGs. Today we require that they be at the level of U.S. distributors.”
You were not selling in Mexico until now? Isn’t that where EGGs are made?
Arani: “The ceramics are made in Mexico. Expanding into a new territory or country is not just a matter of putting a couple of EGGs in a store. Setting up a proper dealer channel is a measured process and it takes time to vet distributors and dealers.”
Do you think the category still has room to grow in the future?
Arani: “One metric we’re seeing that indicates future growth for our company is that both our new and existing dealers are increasing the amount of floor space allocated to our product. Gone are the days of one or two EGGs on the floor with a bag of charcoal. Dealers are finding that the more product they display and the better they merchandise, the better they do.
“Our Platinum dealers stock all seven sizes of EGGs, along with islands, tables, and EGGcessories. This takes a significant commitment on the part of the dealer, but they see this as a path to building better relationships with their customers. Customer relationships are responsible for the success of the dealer and the brand.”
Do you expect that kind of relationship-selling will continue to be as important in the future, in light of recent studies that show many of today’s consumers actually prefer not to deal with salespeople?
Arani: “There will always be a segment of consumers that stand in a store and use their smart phones to research a product or check Amazon for a cheaper price. But not everyone wants to buy everything online. When they’re buying a luxury product or an enthusiast product – like certain cars or motorcycles, for instance – the consumer looks forward to going to the dealer to talk with other like-minded enthusiasts. It’s part of the experience, the culture, the lifestyle.
“Dealer-customer relationships are a big part of EGG culture and the EGG community. Customers enjoy talking to the dealers about what they cooked and what they’re thinking of trying next. They use the dealer as a resource to provide guidance and support.
“Our customer is not a first-time grill owner. They want to move beyond basic grilling and are ready to do more. That’s where the dealer comes in. The dealer helps educate the customer about the versatility of the EGG so they’ll try new things, use it frequently, be satisfied and feel good about their purchase. That’s how sales of accessories are continually generated.”
What types of accessories are selling well?
Arani: “Pizza-making accessories are still doing very well, and are very important because pizza is the “ah-ha moment.” It is the gateway to becoming an EGGhead. Your first meal on the EGG might be a steak, and ribs and pulled pork are a given. But the first venture outside the norm is usually pizza. It’s easy to do and heavily supported on the website with educational videos and instructions. When people make pizza, the light bulb goes off and they realize they can cook lots of other really neat things – like even a pie or a lasagna. That’s when the fun starts.”
Any other accessories doing well?
Arani: “Cast-iron cookware is a trend that’s really taking off. It’s very popular. We went from one or two cast-iron products a few years ago, to a big line now, including Dutch ovens, a double-sided plancha, half-moon griddles, skillets. Our in-house design team developed the cookware with the shape and height optimized for use in an EGG. And the handles are specially designed for lifting with a barbecue glove on your hand.”
Cast-iron cookware is having a comeback nationally. Is this a case of you tying in with broader food and culinary trends?
Arani: “I always say, we are not in the grill business; we are in the food business. We fit in perfectly with the broader movement among chefs and home cooks to use natural, locally-sourced products and ingredients. They’re planting their own gardens to grow fresh herbs and vegetables. They want to know the source of their food and the products they use. They’re interested in natural, live-fire cooking methods.
“The EGG is at the intersection of fresh food, natural fuel, and a natural, live-fire cooking environment, so it ties in perfectly with this trend. Our lump charcoal is pure, natural, carbonized oak and hickory wood, and our fire starters are 100% natural, without chemicals. Sometimes people use locally-sourced wood chunks or chips in combination with the charcoal for cooking, or as a flavor element. The culinary world is so fascinating, and we love to see people expanding their horizons.”
Speaking of things culinary, can you tell us what’s happening with your new Culinary Center?
Arani: “Our Culinary Center has been absolutely amazing. In designing it as part of our new building, the rationale was to have a culinary center on site because we do so much work with chefs all over the world. Two years ago, the goal was to offer a couple classes a week for consumers to show them how to make the most of their EGG, and to do workshops with our culinary partners and dealers. Now, we have two full-time chef instructors just to keep up with the demand on the instructional side.
“But what’s completely surprised us is the number of corporate and private events we’re doing. We have the ability to host 10 to 12 seated around a bar-top for intimate, interactive instruction, or up to 75 seminar-style.
“Companies come to us for team-building cooking events. They hold training sessions, sales meetings, and other events here that they would normally go to a hotel ballroom for. We added state-of-the-art AV systems to accommodate this. We also do a lot of private birthday parties, retirement parties, anniversary dinners. We never envisioned this. We’ve done no advertising; it’s all grown by word of mouth. Everyone leaves with a full belly and a smile.”
This seems to be part of another, broader consumer trend – the desire for “experiences.” How about the Outdoor Room experience? What are you seeing in that trend?
Arani: “More and more EGGs are being incorporated into Outdoor Rooms. When people are making a significant, five-figure investment to update their yard with an Outdoor Room, an EGG is increasingly part of that investment. Having a lifetime warranty helps. When you’re building something into a permanent island, it’s important to know (the manufacturer) will stand behind it forever, whereas something metal will have a half-life of a few years.”
What kind of challenges are you seeing in the barbecue industry? We’ve heard from other companies about the growing issue of counterfeiting and theft of intellectual property. Are you experiencing anything like that?
Arani: “That topic is extremely serious and I could tell you a million stories. We have a very aggressive posture toward our intellectual property, and there are a lot of attorneys all over the world driving some very expensive cars thanks to us. We spend a lot of our legal resources on the front end to prevent theft by safeguarding our intellectual property, and a lot on the watchdog end to defend it at the customs level. We have a robust legal team constantly stepping in. It hasn’t escalated into a big issue because we spend a ton of money to prevent it from becoming a big issue.
“Another thing we’ve had to deal with is unauthorized sellers on Amazon and in Big Box stores and warehouse clubs that have acquired product without our knowledge or consent. It gives the perception that we are selling to these unauthorized dealers, but we have terminated distributors for violating our policies. We make a commitment to our dealers and distributors and we have a responsibility to protect them.
“We also have a responsibility to protect the consumer because, if you buy from an unauthorized reseller, you don’t have a warranty. The whole situation is exhausting, annoying, and an enormous pain in the neck, and it costs so much money. But, you have to be vigilant; if you take a week off from watching unauthorized resellers, there will be two more in their place.”
Innovation continues to drive product development at Dansons, makers of the Louisiana Grills and Pit Boss brands of pellet grills, vertical smokers and kamado grills.
Hearth & Home: How is 2017 looking so far? How does it compare to 2016?
Jeff Thiessen: “We are very blessed and give glory to God that our business continues to grow in leaps and bounds. Our business has doubled every year for the past four years. It’s definitely not plateauing; in fact, it’s picking up speed. I can’t tell you how blessed we feel about this positive position we’re in.”
What is the general mood you’re seeing among retailers? Do they share your positive view of the industry?
Thiessen: “Yes, they’re very positive! Pellet grilling is becoming more mainstream in terms of consumer awareness, so we’re seeing a lot more interest among retailers. There are dealers we’ve been talking with for years who weren’t interested in the line before, but now they want it. They are excited about pellet grills and they see we have brand recognition now.
“Specialty dealers want to bring in products that differentiate them (from the competition), and we’re seeing them have very good results. It’s very encouraging. Consumers are learning they can get real, rich, wood flavor with the touch of a button using a pellet grill, and the marketplace is really starting to connect with that. The mood among specialty retailers is more positive than we have seen in years.”
You started off selling in specialty dealers and you’ve since expanded into Big Box retail channels. How are you managing to straddle both worlds? Are you getting any push-back from your specialty dealers?
Thiessen: “We respect the dealer channel and invest a great deal of time and money on protecting and differentiating our brands. We have the broadest selection of pellet appliances and can cater to the individual channels with our separate brands. Dealers are more accepting of this than in the past, because they recognize that the stronger we are as a company, it allows us to create more innovative products and grow the category. Everyone wins.
“Among specialty retailers, we’re certainly seeing a renewed interest in the pellet category. Lousiana Grills is our upper-end brand for specialty dealers, and we’re developing a lot of new products in that line. We’re introducing our big Champion Grill in 304-stainless steel, inside and out, as a built-in and on a cart for the specialty dealer channel.
“It’s the biggest in the industry and combines a barrel section with three racks, a vertical smoking cabinet with five racks, and a warming cabinet with two racks, for more than 3,400 sq. in. of total cooking area. We are always trying to bring innovative products to the specialty dealer channel. The Champion is a really unique product and it’s getting quite a buzz on social media.
“In the mass channels, our Pit Boss brand’s value proposition is that it’s bigger, heavier, and hotter than our competitors. What’s interesting is we’re seeing some specialty dealers want to also carry Pit Boss units to be able to offer a lower price point in addition to the higher-end Louisiana Grills. We feel there are strong market opportunities in pellet grills and smoking across all channels. Smoking is the buzz word in the industry. Consumers are more educated about smoking and it’s helping to drive pellet grill sales in all channels.”
Is consumer education still a critical part of a pellet grill sale? Or is it becoming less so as awareness of the pellet grill category grows?
Thiessen: “The consumer is more educated about pellet grills than they’ve ever been. They come in knowing about pellet grilling and looking for the best offering. The way we are positioned, as one of the longest-standing pellet grill companies in the marketplace, is helpful.
“We’re investing heavily in training videos for our dealers on how to sell and service the product. We’re developing more resources teaching dealers about how to best present the product to consumers and help educate them. There is still a bit of a learning curve, but that being said, there is so much more publicity around pellets than ever before. We see social media as the single biggest driver of the category.”
How are you using social media as a company?
Thiessen: “Social media is definitely helping to drive interest in smoking and cooking with wood. It is a trend that we expect to grow and we are putting a lot of emphasis on social media. We are making a significant investment in social media marketing. We’re on Facebook, Twitter, Instagram, Pinterest, YouTube. We’re creating how-to videos, recipes, apps, and other things to support our dealer base.”
Besides pellet grills, you offer products in other categories, including smokers and kamado grills. What’s happening with those categories?
Thiessen: “We’re seeing exceptional growth in our wood pellet grills. Wood pellet grilling is still a very strong trend with lots of growth potential and we’re investing heavily in that area.
“Our Ceramic Series kamado grills are doing great. They’ve been a great addition for us and we are adding more units. We’re launching a whole new line of vertical smokers. We’re leading with pellets, but we will add electric and propane models in various sizes. We will release a line of upper-end Louisiana Grills brand vertical smokers for specialty dealers. We’re introducing a wood-burning pizza oven to the marketplace next year, first under the Pit Boss brand.
“In all the products we offer, whether it’s charcoal ceramic kamados, or electric, gas, or pellet grills and smokers, we want to stay true to the smoking side of our business. There is a huge difference in the flavor profile when you’re cooking with wood. Even in our gas or electric products, we try to incorporate a way to get that wood flavor.”
Sounds like you’ve got a lot of new products in the works this year. I know you’ve launched a significant number of other new products in the past few years. Have you had to add manufacturing space or increase staff to support your growth?
Thiessen: “The kind of growth we’re experiencing brings new challenges. We are relocating our headquarters office to Arizona. We will keep our Canadian office open, but we do so much business here in the U.S., and are growing at such a rate, it makes more sense to be headquartered here.
“We are opening a new customer service department in Oregon that will triple the size of our customer service department to better serve our customers. As for manufacturing, we are growing our manufacturing base to meet customer demand. We currently have one plant in Canada and several plants in China. We are beefing up our team of manufacturing partners in Asia to meet demand.”
I keep hearing you mention the word “innovation.” Your company won a Vesta Award this year for your combination gas grill and vertical smoker (the Pit Boss Laredo Smoke Center), and you spoke then about how your company is driven by the pursuit of innovation. Can you talk a little more about the role innovation plays in your company?
Thiessen: “We are very aggressive about constantly coming up with innovative products as a differentiating factor for our business and our dealers. Innovation helps to grow our business and the entire category, and it improves the experience for consumers. Also, by continually introducing innovative new products, it helps keep our competitors at least a year or two behind.
“As long as we’re letting innovation drive our business and keeping the stream of innovative products coming, we’re not worried about competitors or being copied. We try to drive with innovation, so by the time someone brings a me-too product to market, we have already introduced a more exciting, more innovative, better product. We try to stay ahead of the pack.”
How important to your business is the Outdoor Room or outdoor kitchen segment?
Thiessen: “I’m glad you asked about that. We are expanding our focus in this area and see it as major growth potential. Now that we will be in Arizona, we will really be embracing the Outdoor Room. Our high-end Estate series under our Louisiana brand is our line for built-ins. This is a relatively new entry for us. We introduced built-ins a few years back, but now the line has been redesigned and improved. The feedback from the dealer base is positive, so we expect to add new sizes next year.”
Are consumers building it into an outdoor kitchen along with a gas grill?
Thiessen: “Some are including our pellet grill along with a gas grill, but others use it as their primary grill. We see both scenarios.”
What are your successful dealers doing that other retailers could learn from?
Thiessen: “I probably sound like a broken record here, but our most successful dealers are the ones demonstrating the product, promoting the product. They know that when consumers taste the food and see the quality of the food, it’s very convincing. If they burn the unit and show how it operates, and explain the versatility compared to a gas grill, they will engage the consumer and be successful.”
Any final thoughts to share with readers?
Thiessen: “We want to make sure we’re giving God the glory for our success. I can’t say it enough; we are very, very blessed.”
|Wilson Hawkins and his wife, Jennifer Escobar.|
With nearly three decades behind them, DCS is one of the pioneers of the premium, high-performance outdoor cooking category. Wilson Hawkins shares insight on company happenings and industry trends.
Hearth & Home: How is 2017 looking so far? How does it compare to 2016 – up, down, flat?
Wilson Hawkins: “Compared to last year, the tier-one, premium grill business is down. Premium grills priced $3,000 and up are a little soft across the board, industry-wide.”
To what do you attribute this slump? Is it a weather-related thing, or is something else going on?
Hawkins: “There definitely have been weather issues – heat in the West and a long winter in Northeast have had a negative impact. But it’s also a factor of the influx of so many new brands of stainless-steel grills at ‘tier-three’ price points. These are the stainless-steel grills that look premium but don’t have the performance or quality of a premium grill. More consumers are buying down. They don’t see the difference. It may look like it has similar features, but it’s got lower-level quality and performance.”
Are you talking about the value-priced lines that have been introduced by some premium grill companies? Is DCS planning such a line?
Hawkins: “For us, at this stage, nothing is off the table. We’ve explored the idea, but as of yet, just haven’t found a way to put out something that wouldn’t compromise our brand or go against our three pillars – quality, performance and reliability.”
What is the general mood among retailers?
Hawkins: “Dealers remain positive, but as a whole, their ASPs (average sales price) on grills have gone down, so that hurts revenue. But overall, they remain positive long-term.”
Beyond gas grills, are you seeing consumer interest growing in charcoal grilling, smoking, and other live-fire cooking? Is this a trend you’re planning to tie into?
Hawkins: “Any grill manufacturer has to look at the growth in interest in charcoal grilling and smoking. We are definitely exploring a hybrid concept. There is so much attention on smoking now, and I love to see it covered on food TV shows and in magazines. This exposure is good for the whole industry. I love to see smoking gaining popularity because it creates the opportunity for so many more culinary experiences.”
We’re hearing more and more that consumers are interested in experiences rather than things. Fisher & Paykel has an Experience Center in New York City, so it looks like you are responding to that trend. What kind of outdoor cooking experiences do you offer for consumers as part of your marketing mix?
Hawkins: “It’s very important to us to be part of culinary experiences. In North America we have Experience Centers in New York City and Toronto where consumers can attend classes and demos, and actually experience the appliances. We’re opening another Experience Center in Costa Mesa, California, and that one will have a big outdoor focus. It will include outdoor kitchens so consumers can experience the grills and outdoor products.
“We provide other robust experiences by participating in culinary events and festivals in places like Orange County, the Hamptons, Napa Valley and other major markets where we have good retail support and relationships with chefs. Chef Charlie Palmer is one of our brand advocates and we tie in with his Pigs and Pinot event at his Hotel Healdsburg in Sonoma County. These types of culinary events and experiences are very important because they let customers see how the product performs and hear a chef talking about how to use it and the recipes they’re preparing.”
What trends are you seeing in outdoor kitchens? Is it a must-have in high-end homes?
Hawkins: “I think it’s getting to be (a must-have). I was just reading an article about how many new home builds are including outdoor kitchens as standard, not just an optional upgrade. Old-school, an outdoor kitchen included maybe two or three built-in products. But now, people are really investing in larger kitchens with a grill, a smoker, fridge, icemaker, a sink – really everything that’s in an indoor kitchen.”
Are custom-masonry islands still most popular in the premium Outdoor Room space, or are modular outdoor kitchens like your Liberty line catching on?
Hawkins: “The majority are still doing custom islands with built-in components, but our Liberty Collection has found a bit of resurgence over the last year or two. People like its flexibility. You can reconfigure it to adapt to a party set up, or wheel it out of the way, or if you have a gorgeous landscape you don’t have a lid to obstruct views.
“But where we’re seeing a lot of interest in the Liberty line the past couple years is from wineries and the hospitality industry. It’s popular because the way the Liberty is set up, you can have people gather around the grill while the chef cooks; you can serve food right off grill, or use it as a buffet set up. You can move it around depending on where they might be hosting events. They like the flexibility of it. The growth in this area of our business happened organically, but now we’re putting more focus behind working with chefs and hospitality partners and that’s helping to drive it.”
Have you introduced any new products this year?
Hawkins: “New this year is a 30-in. grill on a cart. It was a quiet year this year in terms of new product introductions, but we will have a big launch of a new line of product next year at the HPBExpo.”
Any teaser details you’d like to share?
Hawkins: “The teaser is that DCS will now have the feature set and styling to be more competitive in the premium tier-one category.”
I guess you’re saying we’ll have to wait for the reveal at Expo! Back to the new cart-grill introduction. Are you seeing growth in your cart business?
Hawkins: “Carts are slightly up, but we have never been very big in that arena. When someone is spending $3,000 and up on a grill, most people are building it into an outdoor kitchen.”
Do you offer design support for retailers selling outdoor kitchens?
Hawkins: “Currently, we work with some key outdoor dealers where we can come in and help out on that. And we have plans in place to introduce a design program for our retail customers who are looking for a more turnkey design program.”
Through which retail channel are you selling most of your grills and outdoor kitchen products? Is it specialty hearth and barbecue retailers, or kitchen and bath dealers?
Hawkins: “The majority of our product is sold through indoor and outdoor appliance dealers. We anticipate an area of new growth will be through builders, designers and other specifiers, and we’re working closely with those groups. Hearth and patio dealers seem to be more interested in the tier-three, price-point grills. It seems like they are embracing that type of grill far more than the high end of the market.”
Are you saying these value grills are hurting the premium grill industry?
Hawkins: “The market is getting flooded with a lot of (value) grills and that’s driving the outdoor industry in the wrong direction. They’re cannibalizing the higher-end grills, and the premium pie is getting smaller. As ASPs (average sale prices) are continually driven down, it is becoming a big concern for outdoor retailers. This year is down a little bit as a whole, but historically, when there is a change in any presidential administration, the first year is slow, followed by growth. If nothing shocking and surprising happens, I think we will see a climb back out of this slight decline, as people recognize the quality difference on these products. As these grills begin to fail, it will help the resurgence of premium grills.”
Might these value-priced grills be a way to get Millennials on board?
Hawkins: “Millennials don’t fit our current target customer and are not a key focus. Largely, our demographic is not a first-home buyer, but someone who spent the last 20 years building up to their dream home. But Millennials are the future of this business and we would be foolish not to examine ways to connect with them. This will probably happen first with our indoor appliances, though.”
What are your successful dealers doing that other retailers could learn from?
Hawkins: “The ones aligning with fewer brands are more successful. They have tier one, two, three, and entry-level product offerings. Working with a limited number of brands gives you more leverage with the brand as a retailer in terms of margins, marketing support and other partnership programs.
“But the biggest factor is successful retailers have a very premium website. Retailers that haven’t embraced this are struggling. We see consumers taking six steps before they make a purchase. The first three or four steps are all online, researching manufacturers, dealers, and design websites. Then they make an average of 2.5 store visits before they’re ready to purchase.
“Even if retailers are not selling online, their website and online experience must be inspiring. If they have a premium showroom with gorgeous outdoor kitchens, they need a website that reflects that. It should have a gallery page with photos of outdoor kitchen projects the dealer has been a part of.
“Consumers go on websites for inspiration. That’s why Pinterest and Houzz are so popular. The website should include information on brands they carry with links to the manufacturers’ websites. When people go on the dealer’s website, if the style and imagery do not reflect what they’re looking to create, they will walk away, and the dealer loses business.”