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Hearth & Home December 2018

Right Time, Right Products

By Lisa Readie Mayer

The barbecue category was solid in 2018, and the future looks bright

Many barbecue retailers and manufacturers report that 2018 was a good year. The category is benefitting from a consumer base that’s eager to learn about and experiment with different types of outdoor cooking, and willing to upgrade to better-quality grills. There is continued interest in Outdoor Rooms, and the desire to enjoy outdoor living and entertaining at home is spreading along a much broader budgetary continuum. Growth in new-home construction in some parts of the country also has had a positive impact on grill and outdoor kitchen sales.

The year, however, was not without challenges. Rainy weather was hard on retailers in certain regions. Online competition and showrooming are problematic for some, while finding qualified employees is becoming an issue for others. And there is universal, industry-wide concern as tariff-related price increases on grills, parts, and accessories begin to take effect.

Hearth & Home spoke with a number of retailers and manufacturers who shared insight into these and other trends that emerged in the barbecue category this year, and predicted what might be in store for 2019. Here’s what some of them had to say.

Dragon Fire by ProFire Grills.

Tom Nitz.

Tom Nitz
Modern Home Products and ProFire Grills

“Our business has been very consistent for the past couple of years, with very steady sales in both grills and aftermarket replacement-parts,” says Tom Nitz, senior vice president for Modern Home Products (MHP) and ProFire Grills. A particular bright spot this year was replacement parts for premium grills. “There is a trend emerging where people are repairing high-end grills built into outdoor kitchens,” he says. “It can be difficult and expensive to replace built-in grills, so replacement parts look a lot more attractive, and we saw very strong growth.”

He says the mood among dealers is dependent on location. “In the Northeast the weather has been terrible. It’s helped on the hearth side, but it has had a negative effect on the barbecue business in that region,” Nitz says. “In places like Texas and Florida, we’re seeing a better business climate and more optimism. There is more homebuilding there, and people are buying new products in the aftermath of hurricanes. Of course, it’s terribly sad that people are hurting after natural disasters, but the reality is it boosts business in those areas.”

The company introduced infrared grills about 14 years ago, and despite initial success with the category, Nitz says the infrared business is currently in transition. He says sales of all-infrared grills have “died off,” but some customers are still opting for hybrid models with two traditional burners and one infrared burner. “But the best seller is an infrared sideburner with a sear-magic grid that’s mounted on the side of the grill,” he says. “It adds costs, but offers high-heat searing without monopolizing the main cooking area. It sells well.”

MHP will introduce a new grill line called Dragon Fire in 2019. The line will be positioned between the company’s cast-aluminum MHP grills and its upper-end ProFire line. “We realized we had a gap in the hottest segment of the market. This new line should fill a niche.”

Nitz says the company’s outdoor kitchen business has been very steady. Sales of built-in grills outnumber carts on its premium ProFire line. The new Dragon Fire line will be offered with the option of a cart or as a built-in, but Nitz is not sure how those sales will ultimately break out.

“I anticipate strong demand for built-ins, but in the upper $1,000 price range, a lot of people still buy cart grills,” he says. The company also recently introduced a “Grand Cart” option for MHP grills; previously, those models were mostly sold with columns, posts, or leg bases.

He has concerns about how tariffs will impact business and is “cautiously waiting” to see what happens in the coming year. After getting hit with price hikes on the aluminum imports from Canada, MHP raised prices late this year. Nitz says the move might boost sales in the short term as dealers rush to place orders before the increase takes effect, but he believes tariffs will ultimately have an adverse effect on his business and the economy overall.

“Manufacturers can only absorb so much on top of other increases on insurance, property taxes, and labor costs,” he says. “At some point you can’t continue absorbing, and the increase ultimately gets passed along to the consumer.”

Nitz says if the 25% tariff takes effect in January as planned, he expects it will impact prices, margins, and ultimately sales. “It could really hurt business,” he says. “There are a lot of unknowns.”

Twin Eagles Premium Grill and Outdoor Kitchen Equipment.

Brian Eskew.

Brian Eskew
Twin Eagles

Brian Eskew, who handles Sales, Marketing, and Brand Development for Twin Eagles, reports the company and its dealers had a good year in 2018. He says the outdoor kitchen category is “not explosive, but still thriving, and everyone seems to be doing well.” He says the fact that “so many more consumers want an outdoor kitchen than currently have one,” bodes well for continued growth in the category.

According to Eskew, consumers now have a “high level of understanding” about what an Outdoor Room can be – knowledge that comes, in part, from more dealers displaying vignettes that help customers imagine an outdoor space in their backyard.

“Dealers are getting better and better at merchandising and selling the outdoor lifestyle,” says Eskew. “They’re not asking customers, ‘Are you looking for a grill?’ but instead are asking, ‘What are you looking for in an Outdoor Room?’ It starts a conversation and potentially broadens the sale to other appliances, beverage stations, outdoor heaters, fire pits, furniture, shade features, and more.”

He says when dealers talk about lifestyle instead of Btus or gauge of metal, consumers get excited. According to Eskew, successful dealers focus on outdoor entertaining when talking with customers, asking questions about how they entertain, how and what they like to cook, and how they might use their outdoor space daily for watching television, cooking breakfast on weekends, having a cocktail at the bar.

“It’s all about lifestyle,” he says. “Space and budget are mitigating factors, but consumers are building bigger, more fully-featured outdoor spaces to suit how they want to live and entertain. A lot of backyards behind mid-priced homes have a full gamut of entertaining amenities.”

He credits the growing number of “premium-value lines” for opening the outdoor kitchen concept to a broader base of homeowners with a wide range of budgets to create their aspirational outdoor space. “Our mid-level Delta Heat line might be for people with $10,000 to spend on an outdoor kitchen project, while Twin Eagles is for someone with a $25,000-and-up budget,” he says.

Another emerging outdoor kitchen trend is that early adopters are already starting to remodel their outdoor kitchens. He has noticed a growing preference for more contemporary looks, but says interest in sleek, modular outdoor cabinetry appears to be regional. “People don’t necessarily want their outdoor kitchen to look like indoors; they want a more organic look,” he explains. “They might go for contemporary cabinetry but finish it with stone end-caps. They’re combining a sophisticated indoor look with organic, natural materials to soften it up.”

He says the company’s introduction of a new pellet grill this year has generated a lot of buzz among dealers. “We officially launched (in October) and had an incredible number of orders on the first day,” he says. “The industry is experiencing the same level of enthusiasm and excitement around pellet grills as we saw around kamados 10 years ago. Pellet grills are less intimidating than kamados. A pellet grill is so easy to use and results exceed expectations every time; you can’t screw it up. Our unit is the most expensive pellet grill on market, but it’s justified in terms of craftsmanship, a wide standard feature set, and performance.”

Eskew says charcoal, pellet, kamado, and gas grills all have a place, but he believes most people building an outdoor kitchen will choose either a pellet or kamado grill as a companion to the gas grill. “The look is important to outdoor kitchen consumers,” he points out. “We think consumers will want that companion product to match the gas grill, so it looks nice.”

Although the company has seen growth in both its value-priced and entry-level grill lines, it still sees strong interest at the premium price point. Next year it will introduce a super-premium line positioned a step above its Twin Eagles gas grills. “The new Eagle One line is designed for consumers who desire a more fully-featured grill,” says Eskew. “This will give us four lines. It’s important to give dealers something to talk about. Brands can’t become stagnant; we have to keep it fresh and exciting.”

He says tariffs and resulting price increases are a potential fly in the ointment for next year. “We’re planning an increase for 2019,” he notes. “We believe it won’t stop a high-end, premium purchase, but we may see an impact on the lower end of the category, where it’s more price-sensitive. It’s unfortunate, because, at the end of the day it’s the consumer that’s impacted most.”

Mrs. G Appliances, Lawrence, New Jersey.

Debbie Schaeffer.

Debbie Schaeffer
Mrs. G Appliances

Lawrence, New Jersey

Overall, business was “fantastic, way up” in 2018, according to Debbie Schaeffer, the Chief Customer Officer and third-generation owner of Mrs. G Appliances. Grill sales, however, were somewhat flat, hampered by rainy weather that delayed the start of barbecue season. “Weather, without a doubt, drives business, and the weather was really bad this year,” she says. “If people don’t buy a grill by the end of June, many tend to put it off a year, so I think that happened somewhat.”

For the same reason, outdoor kitchen sales also were “a little flat” this year. However, Schaeffer is seeing more people including two grills in outdoor kitchen projects – typically a luxury gas grill, with either a built-in charcoal, pellet, or kamado grill, although one project this year combined a gas grill with a solid-surface EVO grill. “We talk about it all the time with people,” she says. “It’s like having multiple appliances in an indoor kitchen, and we see this trend growing.”

She says recessed infrared heaters, fireplaces, and fire pits are an “essential” component of the outdoor living space in the New Jersey climate. Another growing trend is sheltering the outdoor space with a solid roof. “More people are putting a roof overhead, and many people are surprised when we recommend including an outdoor-rated vent hood,” she explains.

Gas grill standouts this year include the Napoleon line. “It has been exceptional for us. You get a lot of grill for the price,” Schaeffer says. “We’ve been Weber dealers for a long time, and we have very strong, loyal Weber customers, but Napoleon has been a great brand to diversify our floor and offer other options.”

The store also added Hestan grills recently, and Schaeffer says the bright orange display unit attracts a lot of attention on the sales floor. Both the premium Hestan grill line and its more moderately-priced Aspire line have been popular with customers. “We believe it’s important to offer a wide range of price points,” she says. “People come in with a budget and we’ll work within it, but sometimes they’ll see features they want and move up. All the brands we carry are finding their niche in our store.”

Other bright spots in the barbecue department include kamados and pellet grills. Mrs. G started carrying Big Green Egg and Traeger a few years ago, according to Schaeffer, and the brands are “bringing in lots of new customers.” She says the store’s comprehensive selection of accessories and fuels for these brands is also helping to attract new customers who may have bought their grills elsewhere. Pizza ovens have become another “extremely popular” category in her store. Mrs. G offers options ranging from large, pricey wood-fired ovens to smaller, countertop gas models. “It’s a very good area for us,” she says.

Schaeffer says it’s becoming difficult to find skilled workers for the installation and service side of her business. “They say it’s because kids are not going into tech school, but I also think it’s because the people who are doing these jobs now, don’t want to take on apprentices,” she says.

Online competition is another challenge. “Pricing is not the real issue; it’s the convenience of shopping online,” Schaeffer explains. “We work really hard to be able to deliver products as quickly as possible, because people want the grill immediately – often for a party that weekend. If we can deliver it the next day, we will. We provide great service and people see that. They also like that we are part of the community and we give back. If we can get them in the store, they’ll usually buy from us.”

Goodwood Hardware & Outdoor, Baton Rouge, Louisiana.

Trent Boyd.

Trent Boyd
Goodwood Hardware & Outdoor

Baton Rouge, Louisiana

“Overall, it’s been a fair year,” says Trent Boyd, owner of Goodwood Hardware in Baton Rouge, Louisiana. “One thing we’ve noticed is that more people are fixing their grills. Our parts business is up and we’ve had more calls for service than ever. I guess people are being conservation-minded. They’ve had their high-end grill for 10 years and realize how much it would cost to replace it, so instead of throwing it away, they decide to repair it. As grills last longer, this could become a whole new market for the retailer.”

Boyd says another big trend is “grills and gadgets that can be controlled by smartphone.” He theorizes that interest in Wi-Fi-controlled thermometers, pellet grills, and other high-tech barbecue products may be “a result of Millennials coming into the market,” but says it’s also because the technology makes it “easy to cook remotely while you’re at the pool or the lake.”

He attributes flat grill sales to a wetter-than-normal start to the year, followed by extreme heat. But, he adds, “it’s getting easier to get things shipped online, so it seems we’ll have to figure out how to compete in an Amazon world,” he says. “The high-end grill market in Louisiana has pretty much gone to the Internet. It’s easy to spot (a showrooming) customer. They want model numbers, take pictures of the products in the store, then leave and go buy online. If they find a retailer online that doesn’t charge tax, they’re saving 9% or 10% right off the top. We’ll play the price game on some stuff, but when you play that game, you don’t make any money. It’s having an effect on our sales.”

Boyd says he has sold more pellet grills in his store than ever, but some of those sales are coming at the expense of charcoal-fueled smokers and kamados. “Now, customers are often deciding between a pellet grill and a kamado; that didn’t happen before,” he says. “Traeger does a lot with infomercials and social media to get their name out there. There is a lot of buzz around pellet grills right now.”

He says outdoor kitchens have been “pretty hot in Louisiana for a while,” but this year he noticed a leveling off of big-ticket projects. “People have gotten more conservative,” Boyd says. “They used to want the biggest and best of everything, but lately they’re sticking to the basic outdoor kitchen elements.” One notable exception: pizza ovens. He says pizza oven sales have been growing in his store, as people look to include them in outdoor kitchens.

He says he has backed off on traditional advertising in favor of more targeted social media campaigns and promotional events. The store hosts cooking demos with local chefs and barbecue experts who have appeared on the Food Network. It also has a trailer outfitted with Bull grills and outdoor kitchens that he takes to local microbreweries and other locations to do tie-in events. And every Christmas and Father’s Day, the store hosts major, in-store events with cooking classes, a car show, demonstrations, and other fun activities. “We’ve found it’s a better way of marketing than just throwing money into newspaper advertising,” says Boyd.

He calls tariffs the biggest challenge facing the store right now. He has already seen price increases from some manufacturers and is in “wait-and-see mode” on others.

Boyd remains mostly optimistic about next year. “The hardware industry predicts a 4% increase in holiday spending,” he says. “That would be a good way to close out 2018, and a positive start to 2019.”

Best Barbeques & Islands, Scottsdale, Arizona.

Tracy Berg.

Tracy Berg
Best Barbeques & Islands

Scottsdale, Arizona

Tracy Berg of Best Barbeques & Islands says 2018 was the store’s best year since 2007. She attributes the growth to a

strong economy and a lot of new-home construction in the area. “A lot of builders and contractors are including an outdoor kitchen as part of the package, and they send the homeowners to us to pick out appliances,” she says. Likewise, the store is benefitting from a wealth of new condo and apartment developments, which typically include multiple outdoor kitchens in poolside common spaces.

Berg is seeing a preference for premium grills and outdoor kitchen elements this year. In the past few years, including two grills – usually a ceramic cooker or stainless-steel smoker along with a gas grill – has been trending in outdoor kitchens. She says interest is growing in pellet grills, but ceramic cookers remain much more popular in the store. “People see them as more versatile,” she says.

Interest in pizza ovens has been spiking. “Customers have asked about them more in the last three months than in the last three years – they really seem to be taking off,” she says. “Yesterday, a gentleman was asking about one because he wanted to make pizza with his grandkids. I can tell people that a ceramic cooker is good for making pizza, but people seem to want a true wood-burning pizza oven to create that experience.”

Berg also has noticed an increase in patio heater sales; the category was jump-started due to a cold snap in September. “Usually, we don’t do much in heaters until January or February, but we’re selling more this year than ever.” She says fire pits and fireplaces are up too, as people look for “ambiance on the patio.”

Berg says escalating freight costs are adding to the expense of getting product shipped from manufacturers. The situation has become particularly problematic with lump charcoal. “It seems all the charcoal brands our customers are asking for are based in the Midwest or East Coast, so shipping it to us in Arizona adds a lot to the cost,” she explains. In addition, she says grill prices have increased “a lot” in the last few months as manufacturers introduce 2019 pricing. “It’s difficult,” she says.

The retailer has scaled back on large-scale events at the store after determining they have not been effective in the past. “It seemed like during big events, people were looking for deep discounts,” Berg says. “Our profit margins are already slim, so it’s not worth the effort.”

The Kansas City BBQ Store, Olathe, Kansas.

Dan Hathaway.

Dan Hathaway
The Kansas City BBQ Store

Olathe, Kansas

“We see growth every year,” says Dan Hathaway, manager of The Kansas City BBQ Store. “This year it wasn’t tremendous, but it was good. The fall season around American Royal (a barbecue competition in Kansas City) was huge. We have a big turkey brine display in the store and are seeing strong sales of charcoal cookers for Thanksgiving.”

He says business has received an unexpected boost thanks to the Kansas City Chiefs’ winning season, and an uptick in people tailgating or hosting watch parties at home. “Saturdays have been great because of what the Chiefs are doing, but on Sundays it’s a ghost town in the store,” Hathaway jokes. “We saw the same thing when the Kansas City Royals were winning.”

He says pellet grill sales have been growing in the store for the past couple years, and the category is “going crazy right now.” But Hathaway says it’s the store’s online business in sauces and rubs that “drives the ship in the wintertime. We have a huge selection that people can’t find elsewhere. On any given day we ship out 40 to 50 orders. We don’t sell many grills online, though, because it’s hard to compete with free shipping.”

Although they have promoted outdoor kitchens in the past, including displaying vignettes on the sales floor, the concept never caught on with customers. “It’s not a big market for us, and when we recently moved our store location, we did away with the displays,” says Hathaway. “It looked cool as a store trophy, but didn’t generate business for us. A (masonry center) nearby does a lot of the local outdoor kitchen business with contractors.”

This year, the store acquired the space next door and developed it as a classroom and event space. To date, most classes have focused on competition-style barbecue, but Hathaway expects to get into more “backyard-grilling classes” next year to attract a broader base of attendees.

He cites growing competition – both from other brick-and-mortar dealers and online – as a challenge, but says the business is weathering it well. “In the last couple of years, it seems specialty barbecue products are on every corner,” Hathaway says. “Other stores may sell the stuff, but people know we are the experts, so it’s not that hard to compete when our guys know what they’re talking about. We are the only dedicated barbecue store in Kansas City – we don’t sell hearth – and we have really unique products here.

“The other good thing is, more people are interested in barbecuing and grilling,” he continues. “They’re watching the Food Channel and seeing how fun it is. They want to try new techniques, cook with their buddies, try a local competition. Fortunately, there are plenty of customers to go around, especially here in Kansas City.”

Country Stove, Patio & Spa, North Royalton, Ohio.

Matt Federico.

Matt Federico
Country Stove, Patio & Spa

North Royalton, Ohio

Barbecue sales got a late start due to the weather, but when conditions improved sales “came on strong and we had a good year,” according to Matt Federico of Country Stove, Patio & Spa.

Gas grills are the best-selling barbecues at the 16,000 sq. ft. store, about half of which is devoted to outdoor cooking and patio products, and the rest to hearth. Federico says sales of Napoleon and Broilmaster brand grills have been strongest this year; the store also carries Weber, Fire Magic, and AOG gas grills. Natural gas units outsell propane grills 60% to 40% in the store.

He is seeing a trend emerge in which people are increasingly willing to upgrade to higher quality, higher-priced grills. “They have gone through several Big Box grills and want to trade up,” he says. “The Napoleon Prestige line is our best seller; you get a lot of features, including high Btus, a rotisserie, infrared burner, and more, for $1,400. It’s a good value.”

The retailer has seen pellet grills “really catch on” in the last year or two. Green Mountain Grills are selling well in the store, according to Federico, “because you get a lot for the price point and people like the Wi-Fi capability.” He says pellet grills appeal to customers who want to get more serious about barbecuing but don’t want the “mess, hassle, or learning curve” involved with cooking over charcoal.

“People come in very informed about the pellet category,” he says. “They’ve done their research online and sometimes even come in looking for a specific model.” He’s observed that the kamado category has “cooled down a bit” in the store over the past year or two.

The business sells Outdoor Room products and offers custom design-build services, including on-staff masons and construction crews to create the outdoor living spaces. According to Federico, stone finishes and rustic looks are the most-requested design aesthetics. He says that, although sales in the category are “decent, the concept is still not very popular in our area. Customers question whether it’s worth spending five figures on an outdoor kitchen in Ohio when they can use it only a few months of the year.”

He says increasing competition from other retailers and online websites is an ongoing issue. “We’re trying to combat it by offering promotions for free assembly and sometimes even free delivery, especially on products like Weber and Big Green Egg. You can get these products in a lot of places, so we have to be competitive. When we look at lines to carry, we consider the level of exclusivity they offer and where else consumers can get these products. But there is a balance to weigh. Weber is everywhere, but it also has great brand name recognition that brings people in.”

Fireplace & Grill Shoppe, Kalamazoo, Michigan.

Mark Wrench.

Mark Wrench
Fireplace & Grill Shoppe

Kalamazoo, Michigan

All Seasons Fireplace & Grill Shop

Benton Harbor, Michigan

At Mark Wrench’s hearth and barbecue stores, sales of gas grills were off, but sales of solid-fuel grills were up this year. The retailer is seeing “significant interest in the pellet and kamado categories.” He carries Kamado Joe, Big Green Egg, and Traeger, and is considering taking on Green Mountain Grills next year. He credits Traeger’s “strong, impactful, and positive marketing program” for helping to grow awareness of the pellet category and driving customers to his stores.

Wrench also carries gas grills from Weber, Fire Magic, Broil King, and Summerset at prices ranging from $399 to $16,000, in an effort to “offer quality products at every price point.” But he points to hard evidence that drives home the importance of carrying specialty, solid-fuel grills. “My average transaction is $1,050 for gas grills, but it is $1,200 to $1,400 for solid-fuel grills.”

Wrench has noticed a decline in overall outdoor kitchen sales, but says 75% of projects now include two grills – typically a high-end, stainless-steel gas grill and a kamado. He says 80% of the stores’ outdoor kitchen projects are custom, created in collaboration with landscape architects and masonry partners, but there has also been a spike in sales of prefabricated table surrounds for kamado cookers.

“We sell a significant number of table surrounds for Big Green Egg and Kamado Joe grills,” he says. “With a table surround, you can get an outdoor kitchen island experience for under $1,000.” He says fire pits and fireplaces also are trending for Outdoor Rooms, with “sales increasing nicely.”

For the past four or five years, Wrench has held a “grilling university” event, bringing in a local chef who cooks on three or four different types of grills. “It’s interactive, so guests can stand with the chef and work the grills,” he says. “The event lets customers experience the products to help decide which is best for them. It’s a lot of fun.”

Wrench says online sellers offering lower prices, free shipping, and liberal returns are impacting both grill and fireplace sales. He does his best to level the playing field by offering a knowledgeable staff, quick turnaround, assembly, delivery, cardboard removal, and other services. He says his stores also gain customers and grow sales when people who purchased their grill online come in to buy accessories and fuel. “Those secondary transactions expose people to our fireplace business, and we have gotten fireplace sales as a result,” Wrench says.

“Amazon is bold, amazing, and disruptive,” he continues. “We won’t beat or defeat Amazon or other Internet sites, and people will always showroom, but many still want an in-store, personal buying experience. It’s all about developing relationships. With all we bring to the table, I know our store is better than Amazon, but I must sharpen my salesmanship to compete.”

To that end he has started experimenting with a hybrid retail concept that blends the at-home convenience of the Internet with the knowledge, expertise, and personal service of shopping in his store.

“We will go into the customer’s home with our iPad and laptop and show them options,” Wrench says. “The latest design software allows us to design a fireplace right in front of the customer, and help them make decisions in the comfort of their home. The business concept was originally developed for our fireplace sales, but once we are in the home, we can also turn the conversation to the backyard and outdoor kitchens.

“The average fireplace transaction is around $5,000 installed. We’re not off by far from what the customer can get online. But we can provide an expert to go to their home, look at where the fireplace should go, determine how we should run the gas line, and ensure it will all work. They will know exactly what they’re getting into – no surprises. That doesn’t always happen when you buy a fireplace or outdoor kitchen online.

“In fact, we get calls all the time from people asking if we will install something they bought online. If it’s a brand we represent, we will install it, and we’ll even honor the warranty if they have problems down the line. It’s not worth alienating someone and having them write a bad review about our company. Bottom line, we hope this new blended concept changes the retail game.”

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