Food for Thought
By Lisa Readie Mayer
Despite a slow start to the key grill-selling season due to lingering cold and snow in parts of the country, 2018 is turning out to be a good year for the barbecue industry. The manufacturers we spoke with as part of our virtual roundtable expect to be up over last year – some even by double digits – and they are feeling bullish about the category.
The value-oriented grill lines introduced by some manufacturers as more affordable counterparts to their premiere, luxury lines, continue to perform well. These moderately-priced lines are attracting a broader base of consumers who wish to trade up to a high-quality grill, but can’t yet swing the priciest models. Thanks to a robust economy, grill sales have been solid at the premium end of the category, as well.
The Outdoor Room is still a huge trend and it’s driving purchases of built-in grills. Even in areas of the country where outdoor kitchens were slower to catch on, manufacturers frequently report that built-in models now outpace cart sales. The Outdoor Room concept also is credited with generating sales of not just one grill, but multiple grills of different fuel types, along with sideburners, refrigerator, and other appliances and storage components for building into outdoor kitchens.
An Outdoor Room is becoming an expected amenity in new home construction and remodels, leading manufacturers to forge relationships with architects, designers, builders, landscape architects, and other specifiers. More notable trends for 2018: Pellet grills are hot; color is catching on; and fire pits have achieved must-have status on the patio.
Newly implemented tariffs on imported aluminum, steel, and other goods, are a specter on an otherwise rosy picture. Manufacturers voice concern that the tariffs – 25% on steel and 10% on aluminum – could trigger significant price increases on grills and other outdoor appliances. Another potential hiccup is the Supreme Court’s recent decision allowing states to collect sales tax on Internet purchases. Most companies say they have had no real impact from either issue at this point, but they – and their dealers – are closely monitoring both situations.
|Basil Larkin||Gary Butler|
|Jason Thompson||Sharla Wagy|
Basil Larkin grilling on the Infinity Terrace at Hestan Vineyards.
Since launching in 2016, Hestan Outdoor has racked up industry awards and garnered attention from retailers and consumers for its premium grills loaded with patented features, smart design, and bold color options. Parent company Hestan Corporation also makes high-performance commercial and residential indoor kitchen appliances, innovative cookware, and even fine wines. Last year, Wine Spectator named its Meyer Vineyard’s 2014 Napa Valley Cabernet Sauvignon one of the top 10 wines in the world.
Hearth & Home: Hestan has been out for three seasons now. Tell us how this year is going.
Basil Larkin: “It’s been excellent for us, especially for such a young company. This year, mortgage rates are good, fuel costs are good, the economy is good, and people are feeling pretty positive, so that has been good for business. The weather did hurt some areas. In places like Michigan, there was still ice and snow on the ground in April when people should have been buying grills.”
How about retailers? Are they equally upbeat about this year?
Larkin: “In general, dealers are benefitting from a strong economy. Specifically, our dealers really like what we’ve brought to market. We are growing our dealers and taking a lot of share from stagnant product lines. For example, in the Boston area, Yale Appliance & Lighting put us on late last year and they are killing it with us.”
What was your bestselling product? Is it from your new (lower-priced) Aspire line, or is the (premium-priced) Hestan Outdoor line still number one?
Larkin: “Hestan Outdoor is still the best seller; it’s had a one-year head start. But the Aspire opportunity is two to three times the size of Hestan, purely because the price point is 30% less. Our strategy is to be the most innovative and best-looking in the category.
“Color continues to be a huge differentiator for us and drives consumers to dealers. But when they realize where Hestan Outdoor is priced, they might say, ‘I’m not at a point in my life where I can afford this.’ With Aspire by Hestan, we have a way to keep them in the family. The analogy I use is, maybe they can’t afford the top-of-line BMW, but they can still afford a BMW.”
You mentioned color as one of Hestan’s most distinguishing features. Are more people opting for color?
Larkin: “Almost 25% of our grills are sold in color. Previously in my career, I worked for two indoor appliance companies that offered color, but those color sales never got beyond 7% or 8%. So this is amazing. The other notable thing is that with indoor appliances, people might pick one color piece but do the rest in stainless steel. With outdoor appliances, they are more likely to get multiple pieces in color – the grill head, storage cabinets, sideburner. It makes a statement.”
Do most of your dealers display your products in color?
Larkin: “Fifty percent of our retail displays are in color, and those who display color do better. It’s a night and day difference. Color grabs attention and starts a conversation about Outdoor Room possibilities. Dealers can’t stock all the colors, so we have to make color on demand. One of consumers’ main decision drivers is how quickly they can get product. That’s been a challenge with the color appliances.
“Color has become so big, we recently invested in our own powder-coating facility in Anaheim. It was a substantial investment, but it allows us to control the quality and makes the turnaround much faster. If someone wants to go with blue but discovers blue has a four-week turnaround, they might pick stainless steel instead. But if we can make color appliances with the same lead time, they’ll say, ‘Cool, I’ll go with the blue.’ I believe this new facility will further increase the percentage of grills sold in color.”
What is the best-selling color?
Larkin: “Citra (orange) is our number-one color. There are several reasons: It’s unique, it pops, it’s uplifting, and it’s also our company color. Our logo and point-of-sale materials are in orange, so dealers often choose orange for the display model because it coordinates with all these materials.”
Besides color, what other trends are you seeing in the category?
Larkin: “Our Outdoor Living Suite business has been extremely robust. It’s a fully constructed, 304 stainless-steel outdoor kitchen that we make in California. It has cutouts for a Hestan grill, sideburners, storage, refrigerator, and beverage dispenser, and comes with a stainless-steel counter, or you can get it without the counter and use our template to get a stone or Dekton counter.
“Besides residential, it’s really taking off with high-end hotels and resorts. The Mandarin Oriental luxury condo residence in Boca Raton, Florida, ordered an Outdoor Living Suite for each of the 91 residences. It was close to a $4 million sale, and there are opportunities like this in every region. The opportunities expand further because consumers see this great outdoor living solution and want it for their home when they return from vacation.”
Do you work directly with designers or architects on projects like this?
Larkin: “Working with these groups has become a big part of our business. Just like architects and designers are super relevant in indoor kitchens, they now see the potential exploding with the Outdoor Room. We are National Kitchen & Bath Association (NKBA) members and go to KBIS. We’re developing continuing education classes on outdoor kitchen design, and we do designer events with local chapters to stay connected with this community.”
Is kitchen and bath your strongest channel? Or, is it hearth, barbecue, and patio?
Larkin: “Specialty hearth, barbecue, and patio dealers are amazing. They are extremely knowledgeable on the category. But there are a hundred times more appliance retailers than hearth retailers, so because of the numbers, kitchen and bath lighting and appliance dealers are doing the bulk of the business.”
What about Internet sales? Is that a big part of your business?
Larkin: “We support authorized retailers’ online sales, but we don’t sell anything direct to consumers. We encourage our distributors to support brick-and-mortar. Dealers can’t have just an online presence. We have pricing policies that protect both online and brick-and-mortar businesses. We care about our retailers making the appropriate margin, and want to help the consumer get the best price and service. Because of the price of our product and all the design options to choose from, most people buy in-store.”
What are some of the challenges you’re seeing in the industry?
Larkin: “There is some uncertainty about price increases due to tariffs.”
Are the new tariffs impacting grill prices?
Larkin: “Our distributor based in Seattle has the northwest U.S. and all of Canada. They were begging us to ship them product before the tariffs went into effect because they were going to get a 10% to 15% hit on shipments into Canada. Another potential impact for the industry is the tariff on raw materials and some components coming in from China. We source almost all of our component products and materials here in the U.S., but the tariff situation is still an unknown.
“Nobody knows where this is all going to fall out. Most companies are pretty concerned. I live in Redondo Beach (California) where sales taxes are already 9%. Tariffs could potentially add a lot more to the price on top of already high taxes. This is very relevant and could have a significant impact on the bottom line. As prices on raw materials increase, (manufacturers need to determine whether to) negotiate with suppliers for better pricing, or try to absorb the increases, or pass some of the increases along by raising prices, or a combination. It’s a delicate balancing act. We’ll have to monitor it.”
Are retailers concerned about this?
Larkin: “Retailers are probably the most informed because they’re hearing about possible price increases from all their manufacturer vendors. It’s hard for the retailer who has to go into their system, figure out which products are going up, and change all those prices online and on floor tags. Hestan alone has 150 SKUs so it’s a big undertaking.
“Then, they have to call any customers who have product on order to say, ‘If you don’t take the product by X date, the price will go up.’ In some cases that might drive business, but really, it just pulls the sale forward to an earlier date. Or, sometimes, a price increase can put it out of a customer’s budget, so they may decide to wait until things calm down.”
It will be interesting to see how this all plays out. With that in mind, what is your forecast for next year?
Larkin: “We are adding new accessories. The diamond laser-cut grate on Hestan Outdoor is now an optional accessory on Aspire. We are introducing a charcoal tray to fit over the gas burner. We’re also releasing caster covers. We got the idea from a retailer who told us our cabinetry is so beautiful, but we need to cover the wheels to make them look nicer. This is another customization opportunity for consumers and a revenue opportunity for retailers. We have a grill introduction in the works, with the hopes it will be ready by HPBExpo 2019.”
Thanks to two new distributors and sky-high consumer interest in wood-smoke flavors, Memphis Wood Fire Grills is having a good year. With high-end gas grill looks, built-in Wi-Fi technology, wide temperature ranges, and other versatile cooking features, the company’s stainless-steel pellet grills are positioned at the premium end of the category.
Hearth & Home: Thanks for talking with us while you’re at a trade show. Does it feel like you’re always at a trade show?
Sharla Wagy: “Actually, we only do four shows: HPBExpo, the Pool & Spa show, KBIS, and the Billiard & Home Leisure Expo, which is where I am now.”
How is 2018 looking so far? How does it compare to last year?
Wagy: “We’re up from last year, but not as much as we thought. It really depends on the region. The Northeast was tough – the winter was bad and really lingered, and spring weather was not much better. But other areas have done very well. For instance, the Midwest and Southeast are up substantially. Overall, it’s been a good year.”
Do you attribute the gains to growing consumer interest in pellet grilling?
Wagy: “We set up new distributors – Alert Distributing in the Midwest, and Rutherford Equipment in the Southeast. Both have done a great job and are responsible for part of our growth. But it’s definitely true that pellet grills are in demand. More and more people are aware of pellet grills and wood-fired cooking today. Once consumers taste the wood-fired flavor and the juiciness of the meat, they are sold and won’t go back to gas. Traeger has done a great job of educating consumers about pellet cooking.”
What is the general mood among retailers?
Wagy: “Again, it depends on the area – some dealers in the Northeast feel like they’ll never catch up and recapture the sales they lost in the spring. But, on average, I think most dealers feel pretty optimistic, excited, and positive looking forward.”
What has been your bestselling product this year? Any surprises?
Wagy: “Our Pro 430 unit has been our best seller for years. It’s our mid-priced grill. It has a lot of great features and performs like a champ. It starts at 180 degrees for smoking and gets up to 650 degrees. It’s a convection oven, so it can bake a cake or cookies, or make pizza. It has an open-flame feature for high-heat searing. It can roast a turkey without a rotisserie because the heat circulates all around. With this kind of versatility, you don’t need to buy multiple appliances.”
What about your Wi-Fi-controlled app and other high-tech bells and whistles – are they important selling features?
Wagy: “Some people really love the Wi-Fi feature, but actually, only about half use it. It’s a convenience, but not a major driver for sales. Personally, I love it. I turn the grill on when I get home, and get a text when the temp is ready. You put the food on, set it, and walk away, and get another text when the food is done. People can even be on the lake or golf course and still monitor their cooking throughout the day.”
You mentioned Traeger previously. Are your customers people who cut their teeth on a Traeger pellet grill and are now trading up?
Wagy: “We’re getting trade-ups. People also see one of our grills at their neighbor’s house and want one, or they find us while researching pellet grills on the Internet. We have great online reviews for our products. They see we have the best grills. But the first step is people need to be sold on the flavor of wood-fired cooking.”
Have you introduced any new products this year?
Wagy: “Last fall we introduced 304-stainless, self-closing, accessory door and drawer components for outdoor kitchens. The line matches our grills perfectly and is doing really well. We’ve had really good acceptance, especially for our Controller Drawer systems. The built-in controller panel can be included with two or three drawers or a trash drawer. We also have a number of new products in the works, but nothing I can speak to right now.”
Given the introduction of these outdoor kitchen components and the high-end look of your grills, I’m assuming a lot of them are being built into outdoor kitchens. True?
Wagy: “The majority of what we sell is still on carts, but we have definitely seen growth in our built-in sales. The whole outdoor-kitchen category continues to grow. People want to live and entertain outside, and we’re seeing customers invest as much in outdoor kitchens as indoor kitchens.”
What challenges are you seeing in the industry? Is anything brewing out there that gives you concern?
Wagy: “The biggest challenge is probably Internet dealers going below MAP. Usually, if this happens, we are notified immediately by other retailers; they police the online marketplace for us. We jump on it right away and contact the offenders. Our policy is that we will not provide product to online dealers who violate MAP. MAP protects everyone. We are contacted continuously by Internet dealers who want to sell our products online, but we rarely allow it. We are very selective about who we allow as online dealers.”
What percentage of your sales is online?
Wagy: “Only a small part of our sales is online. Sometimes brick-and-mortar dealers are concerned with online competitors, mostly, I think, because of the tax issue. They feel consumers come into their stores to check out the product and get educated, and then order online to avoid paying tax. Our high-end grill is $5,000, so in some areas – parts of Washington State, for instance, where the sales tax is 10% – that’s a savings of $500.
“The Supreme Court recently overturned the law that says online retailers don’t have to collect tax unless they have a physical presence in that state, but, as I understand it, it is up to states to decide if they will collect the tax. If they do, it may help level the playing field for brick-and-mortar dealers.”
What about sales overseas? Do you sell outside of the U.S. and Canada?
Wagy: “We currently have a distributor in Germany and are expanding our sales in the European market. It’s now a small percentage of our sales, but we hope to grow it.”
Do you work directly with designers, architects or other specifiers? How do you reach them and do they buy directly from you?
Wagy: “In most cases we sell to designers, architects, landscape architects, and builders through our dealers or distributors. It happens more on the distributor side, because dealers often don’t have the staff to go out and target these groups.”
What are your successful dealers doing that other retailers could learn from?
Wagy: “One of our most successful dealers has one of our grills out front and smokes a brisket every single weekend. He says the smell brings customers in. A lot of our dealers bake cookies on our grills to open discussions about the convection feature and the versatility. Demo-ing is very important with our grills. Because of how they look, people expect them to be gas grills. They associate pellet grills with a Traeger-style look.
“Merchandising and signage also are important. Some of our best dealers run a video loop of Steven Raichlen cooking on our grill. In the video he smokes a camembert cheese and it’s wonderful. Some dealers offer white-glove service – they will deliver the grill, set it up, teach the customer how to use it, and even set up the Wi-Fi control for them.
“Dealers who offer this service beat out the competition because, when customers are paying $3,000 to $5,000 for a grill, they want to learn all about it so they can get the most out of it. Some dealers offer this service free of charge; others charge for it and see it as a profit center. In fact, service in general is a great way to compete without it being all about the price.
“Dealers can offer a service contract as they do with fireplaces, where every spring they go out and clean the grill. Dealers can even offer delivery of pellet fuel. If you get into people’s homes, you have an opportunity to sell them other things, and they will talk highly about you to their friends and family.”
Any news on the corporate front? Did you add any manufacturing space or increase staff this year?
Wagy: “We’ve added staff this year to handle business demands. We hired a new Marketing specialist, a new National Sales manager, and added Technical Services staff to keep up with our growing business.”
What is your forecast for 2019?
Wagy: “The plan is to continue to grow. We will launch more branded accessories to go with our grills. We are working on new products to launch in spring of 2019. Hopefully, the economy will stay strong. We are very optimistic about next year.”
Any other thoughts to share with readers?
Wagy: “We continue to be committed to brick-and-mortar retailers. We have a quality product and specialty dealers know how to sell it best. We want to grow a profitable business for our dealer partners and for us.”
A division of Char-Broil, one of the world’s largest grill manufacturers, Saber Grills are sold exclusively through independent specialty retailers. The premium gas grills incorporate proprietary infrared cooking systems, use 30% less gas than traditional gas grills, and have other innovative features. Three lines, including the original Saber Grills, the new Saber Elite Series, and the Saber Cast Series, cover a wide range of price points. The company also makes outdoor kitchen islands and components.
Hearth & Home: How do your sales in 2018 compare to last year?
Gary Butler: “The year got off to a slow start. The weather had a lot to do with it. When the weather isn’t good, people continue to use what they have instead of starting the shopping process. When it finally warmed up, it really made a difference. Things have picked up over the past three months, and, based on July sales, we will make up for that slow start. We have really seen an uptick and it looks like we should be up for the year.”
What is the general mood among retailers? Any particular bright spots regionally?
Butler: “Based on orders, dealers have made up a lot of ground in the last three months. That’s not a blanket statement; it varies in different pockets around the country. For us, the Pacific Northwest has been a strong spot this year, and the Southwest has as well. Some of that is because we are getting a lot of traction in those markets.”
What has been your best-selling product this year? Any surprises?
Butler: “Grills in the $1,200 to $1,700 or $1,800 price range have been our best-selling price point. I will say we’re seeing a lot more consumers trading up to better, more premium grills, so that’s driving the price point up even more. It’s been a good thing. This is a mature category, so people upgrade; they rarely buy down. Once they get into a premium grill, it’s probably their fourth or fifth grill purchase.”
Do you think trading up to durable, longer-lasting grills has something to do with the growing trend of conscious consumerism? Are people choosing higher-quality grills as a way to prevent the waste generated from those previous four or five cheap grills going to the landfill every few years? A company such as Patagonia comes to mind as helping to educate consumers about this concept.
Butler: “That might have something to do with it. People are also investing in better-quality meats and food ingredients. They’re buying half of a grass-fed cow directly from the farmer – that’s something I’ve done myself – so they want to invest in quality appliances that will do the best job of cooking that quality meat and protecting that investment. The intense heat of our infrared cooking system produces great results, particularly for beef. The idea of buying up does fit for consumers with that mindset.”
Would you say infrared grilling has finally, and officially, caught on as an outdoor-cooking trend?
Butler: “I think infrared grilling is definitely catching on. Our cooking system has a high promoter score, which means people who own a Saber are telling their friends and family about it. It’s not easy for people to understand or explain exactly how infrared works, but they know it is the magic behind the grill. It becomes a talking point. They know it cooks with high heat, not hot air, and that the flare-up management is second to none.”
Have you introduced any new products this year? If so, please tell us about them.
Butler: “We have introduced new accessories that have been well received. The EZ Grilling System Set comes with 304 stainless-steel grilling accessories, including a roasting pan, a rack for ribs or roasts, cooking trays, grill baskets, skewers, a steamer tray, and a pepper rack. You can buy it as one complete set that gives you at least seven different options for cooking. It has been well received. I can tell you the dealers want these types of accessories. In our category, when people buy a new grill only every 10 years or so, the dealers need other ways to keep those customers coming back into the store.”
Any plans to branch out to offer other types of grills such as pellet grills or kamados?
Butler: “Pellet grills continue to gain interest from consumers, and the category is intriguing for dealers. We’re exploring the opportunity there, not necessarily for Saber initially, but I think, overall, the company is looking at it.”
What trends are you seeing in the Outdoor Room? What’s happening with sales of built-in grills for outdoor kitchens?
Butler: “The Outdoor Room trend is still extremely popular. Sales of our built-in grills, sideburners, doors, drawers, trash cans, and other components are growing. We also offer a built-in outdoor refrigerator and an ice chest. We’re seeing a lot of success with our Saber EZ Outdoor Kitchen line. It’s a complete outdoor kitchen solution that comes with a grill, sideburner, storage options, and either a refrigerator or a drop-in ice chest, in an eight-foot aluminum island. It has a reasonable price point and helps open the category to a broader base. There is definitely a lot of growth in outdoor kitchens and Outdoor Rooms.”
At this year’s Expo in Nashville, Saber exhibited with Urban Bonfire’s new modular outdoor kitchen cabinetry line. Are you partnering with them on outdoor kitchens?
Butler: “As a retailer, Urban Bonfire has always been a big seller of Saber grills. They are a preferred dealer in their market. So when they introduced their new line of modular outdoor kitchens, they outfitted them with Saber grills and components. But, no, we are not partners with them on the line.”
Their outdoor kitchens have the look of modern indoor cabinetry. Is that a growing design trend in outdoor kitchens – to have an indoor aesthetic as opposed to a rustic rock or stucco look?
Butler: “Whether the inside moving out is a trend, I don’t know. I think it depends on the taste of the individual. We haven’t seen that 100%, but interest is starting to grow. Not all consumers are aware that modular outdoor cabinetry is available with the look of interior cabinets. I will say that customization is very important when people make the investment in an outdoor kitchen. They want it customized to their design. That is an advantage with a modular system.”
Do you work directly with designers, architects, or other specifiers on outdoor kitchen projects, and if so, how do you reach them?
Butler: “These groups are very important. We currently reach them through our distributors who have contacts with the design community. We hope to do more in this area.”
Let’s shift gears a moment. What issues or challenges are you seeing in the industry? Do you see the new tariffs impacting your business?
Butler: “We’re not seeing any major challenges or issues. In terms of tariffs, we are monitoring the situation and what the impact will be. Outdoor refrigerators are hit, but there is a lot greater impact on, say, the technology industry than on our industry. As of yet, there hasn’t been a big impact on our business directly, but we are monitoring it. We’re waiting to see where it lands.”
While we are on the subject of challenges – specialty retailers often bring up their frustration over Internet competition. What is your policy on Internet sales? How do you protect your independent dealers?
Butler: “We have an IMAP (Internet Minimum Advertised Price) policy in place. It has been well received and it allows us to have a presence online and also protect the dealer. The recent Supreme Court ruling regarding collection of taxes on online sales is right up there with the tariff situation – we are monitoring it and need to understand it a little better to determine what it means for us and our customers.”
What are your successful dealers doing that other retailers could learn from?
Butler: “Cooking classes are very on-trend now for dealers and engaged consumers. Not just demos, but actual cooking classes. They are more fun, educational, and take a deeper dive into the outdoor cooking process. Another effective strategy is having members of the retailer’s staff own and use our products – when they know about it first hand, they can talk about it and are more likely to recommend it. And radio advertising during the season has been very effective. We provide the content assets and the retailer uses them to develop spots through their local radio stations. Radio is working for dealers.”
And, finally, what is your forecast for business in 2019?
Butler: “I think it’s going to be a good year. I expect we will see growth by adding new dealers and growing our existing dealer base. The outdoor cooking category is healthy. Consumers want to upgrade their equipment. They are interested in learning more about different techniques, fuels, and types of grills. The outlook is very good.”
Blaze Grills was started 5½ years ago by the founders of the online grill site BBQGuys.com. Since then, the retailer-turned-manufacturer has proven itself a serious player in the barbecue category, and is enjoying annual double-digit growth. It has invested heavily in research and development, bringing to market an extensive and expanding collection of outdoor cooking appliances, outdoor kitchen elements, and more. A new sister company, Firenado, offers fire pits and other outdoor hearth products.
Hearth & Home: For a relatively new company, you made quite a statement at the last HPBExpo with a huge display of products. You even won a Vesta Award for your new, innovative pizza oven. Are we correct to assume things are going well for Blaze Grills?
Jason Thompson: “Yes! It’s been an exciting ride. We went from zero to 100 miles an hour in 5½ years. The owners, Mike and Ladina (Hackley), were brick-and-mortar retailers who founded the online site BBQGuys.com 20 years ago, and then launched the Blaze brand 51/2 years ago.”
Are most of your products sold online?
Thompson: “When we break our numbers down, 70% of Blaze Grills’ sales come out of brick-and-mortar, and 30% is sold online. We started running those numbers because we get that question a lot from prospective dealers. Today, there’s not a grill brand you can’t find online. But we don’t sell in any Big Box stores, only through specialty retailers. They know their business and are the best representatives for our products.
“When we first launched, grill retailers were a major part of selling our brand, but now the channels are expanding to include other companies involved in outdoor living, such as hardscapers, appliance stores, and landscapers. People we never thought would be selling grills are inquiring about becoming dealers. We want to be affiliated with people who know our product, and can educate the consumer.”
How is 2018 looking so far? How does it compare to last year?
Thompson: “2018 has been outstanding. We’re growing by double-digit percentages. The Northeast and Midwest had extremely cold weather through April, but since then, we have had an insane number of grills going out to those areas. We have really started to gain a foothold there. The year is looking great.”
You’ve introduced a lot of new products lately. What has been your best-selling product this year?
Thompson: “This year we’re looking at a price point between $1,600 and $1,900 as the sweet spot. Our Blaze LTE Series grills fall in that range. They have lights on the inside of the grill head and on the knobs, as well as an upgraded cooking grid. We discovered people want those lights and upgrades more than we initially thought they would.”
Are most of your grills sold as built-ins or on carts?
Thompson: “Typically we see 60% sold as built-ins, but that depends on the area of country. In the Northeast and Midwest, outdoor kitchens were slow to catch on. Initially, in the Northeast, the majority of grills were sold on carts, but this year it flipped and now it’s 70% built-ins and 30% on carts.
“Consumers are more aware of outdoor kitchens, and retailers understand the trend is here to stay and they are looking to grow and expand with unique products for outdoor kitchens. More types of outdoor-related business are getting involved in the category, and the introduction of turnkey outdoor kitchen systems makes it easier with faster turnarounds now. Because, you know, everyone wants their grill before Friday.”
I’m sure that’s true! Nobody likes to wait. Besides outdoor kitchens, what other trends are you seeing in the industry? Are the new products you’ve introduced recently – such as the fire pit with live-fire rotisserie, your kamado, and pizza oven – in response to today’s outdoor cooking trends?
Thompson: “There is one word that comes to mind – unique. People have always incorporated a gas grill, but now, in addition to that, they are looking for something unique. That’s why we came out with our griddle unit, kamado, and pizza oven.
“People want unique cooking experiences, not just burgers and steaks. They want to cook pizza and make breakfast outdoors on Saturdays and Sundays. Our kamados and griddles are growing by double-digits every year. The pizza oven we introduced at Expo is not out yet – hopefully by fall it will be. Dealers want it and call about it every day.”
What about the outdoor fire pit trend? Is that why you launched the Firenado line?
Thompson: “The company’s owners saw an ever-expanding market for fire pits. I think the Millennials have a lot to do with this trend. They are building smaller homes but putting more money outdoors. They all want an outdoor living space, and they definitely want fire pits. Firenado is a totally separate company, but it has the same distributors as Blaze and complementary product lines.”
With your offerings for the Outdoor Room expanding, are you working directly with designers, architects, or other specifiers? How do you reach them?
Thompson: “This is a very important market. We connect with designers, architects, and builders through our dealers and distributors. We have a team that assists our distributors and retailers with educating these groups about our products, because educating the specifier channel helps to grow our sales.
“A lot of times now, builders will offer an outdoor kitchen as an option on new homes. They’ll set up their model homes with outdoor kitchens so the prospective homebuyer can see what’s possible and get excited and choose to include it. This varies by region. In Louisiana, where we are based, builders’ spec homes often include outdoor kitchens. It’s a small cost to them, but it really differentiates the home and is a profitable upgrade.”
Besides these positive trends, are you seeing any particular challenges in the industry right now?
Thompson: “There are not any issues at the moment. We’ve had questions recently from retailers about tariffs. We don’t know what the future holds, but for now, tariffs are not impacting us at all. We’ve had no change in pricing for our customers.”
If you’re hearing concerns from retailers regarding tariffs, surely you are hearing them about Internet competition as well. How do you protect your independent brick-and-mortar dealers?
Thompson: “We have a very strict MAP policy that ensures both online and brick-and-mortar dealers advertise the same price. We monitor and police it very aggressively. We usually catch any violations on the same day and make (the offenders) change their prices. I’ve had authorized dealers violate MAP multiple times, and we have kicked them out as dealers. If you don’t enforce it, retailers won’t carry your brand and it hurts you in the long run.”
What are your successful dealers doing that other retailers could learn from?
Thompson: “Definitely displays are very important, particularly with outdoor kitchens. A customer has to be able to walk up and take a look. A lot of our dealers are building live outdoor kitchen displays so they can be out cooking on them as customers walk in. Some dealers let customers come in and test the equipment out first – they can bring in their own food or sometimes dealers even provide the steaks for them. Dealers who listen to customers and spend a bit more upfront, are making it up on the back end.”
Any news on the corporate front? Did you add manufacturing space or increase staff to accommodate your growth?
Thompson: “We manufacture overseas and in the U.S. We’ve had to add staff on both the manufacturing and corporate sides to keep up. We’ve created new sales positions to better cover the country and support dealers.”
What is your forecast for business in 2019?
Thompson: “We absolutely think the double-digit growth will continue. We listen to our dealers and consumers and pay attention to the market. We’ll keep on keeping on because it’s working.”
Any other thoughts to share with readers?
Thompson: “Blaze is all about the end consumer. Giving them innovative products, good quality, and a price point they deserve, helps us succeed. It makes sense. Taking care of that end consumer keeps us in biz.”