Instant Brands sold in Coles, Woolworths and Big W files for bankruptcy

A popular American kitchenware company with stock in Australian stores such as Woolworths, Coles and Big W has filed for bankruptcy.

Instant Brands – the maker of Instant Pot pressure cookers and Pyrex glassware – filed for bankruptcy protection on Tuesday (AEST).

The company cited high interest rates, inflation and a dwindling post-Covid supply chain for draining its cash and making debt unsustainable.

According to a filing this week in the US Bankruptcy Court for the Southern District of Texas, Instant Brands, based outside of Chicago, has more than $737 million in assets and liabilities.

A spokesperson for Instant Brands Australia confirmed that the Down Under company was not affected.

“Chapter 11 is a legal instrument in the United States that allows companies to continue to strengthen their financial position in an efficient and orderly manner. It is different from restructuring or administration processes in other countries,” they said.

It doesn’t mean they’re going bankrupt.

The company’s entities located outside of the US and Canada are not included in the Chapter 11 filings.

“We will continue to serve our retail and distribution partners and our community of users without interruption, and they remain our top priority.”

The Instant Pot multicooker was the company’s best-selling kitchen appliance and gained a cult following during the pandemic, with avid foodies sharing viral recipe videos on TikTok during the lockdown.

But when the pandemic ended, people changed their spending habits and used their money to eat out, travel and attend shows, instead of household items.

A spokesperson for Instant Brands Australia confirmed that the Down Under company was not affected

Sales of ‘electronic multicooker appliances’ reached record highs in 2020, but plummeted after lockdowns were lifted

Sales of “electronic multicooker appliances,” most of which are Instant Pots, peaked at $AU1 billion in 2020, the start of the pandemic. By 2022, Instant Pot sales had fallen by nearly half to $508 million.

According to market research firm NPD Group, sales in dollars and units in the US fell 20 percent in the sales period ending in April from last year.

And last week, the company’s rating was downgraded by S&P Global due to lower consumer spending on discretionary categories.

Instant Brands was warned that ratings could fall again if the company sought bankruptcy protection.

“Net sales in the first quarter of fiscal 2023 were down 21.9 percent from the same period last year,” S&P analysts wrote.

“This was the seventh consecutive quarter of year-over-year sales contraction. Instant Brands’ performance continues to suffer from declining consumer demand due to lower discretionary spending on home products.”

Like consumers, US manufacturers have also been hit by increased inflation and higher interest rates.

Ben Gadbois, CEO and president of Instant Brands, said the company is short of cash after surviving global supply chain problems during the pandemic.

“Tightening credit conditions and higher interest rates impacted our liquidity levels and made our capital structure unsustainable,” Gadbois said in a prepared statement Tuesday.

Instant Brands, whose brands also include Corelle, Snapware, CorningWare, Visions and Chicago Cutlery, said it has received a commitment of $195 million in new accounts receivable financing from its existing backers.

The Instant Pot multicooker was a best-selling kitchen appliance with a cult following during the Covid-19 pandemic. Avid foodies shared viral recipe videos on TikTok, including this ‘surprising five-minute egg hack’

The Instant Pot was created by Robert Wang, who used $300,000 of his personal savings on the project after losing his job, which he attributes to the development of the kitchen appliance, according to CNBC Make it.

It took Wang about 18 months to develop the first iteration of the Instant Pot, before the first product was released on Amazon in October 2010.

There are now about 10 versions of the Instant Pot for sale on the Instant Brands website, ranging from about $95 to $265.

The company was acquired by private equity firm Cornell Capital four years ago and merged with another kitchenware company, Corelle Brands.

Millions of foodies bought the Instant Pot multicooker, making it one of the top-selling products sold during Amazon’s Prime Day sales events in 2016, 2017 and 2018, when they sold a record 300,000 within 36 hours, making their own Prime Day record breaking.