The Instant Pot, aptly named IP by its loyal followers, is not just a good kitchen gadget—it’s a remarkable one. This device, a true time-saver, has revolutionized cooking by effortlessly turning ingredients into delicious family meals. With the Instant Pot, you can focus on other tasks, like taking care of your kids or cleaning up, without worrying about tending to the stove. Mastering the electric pressure cooker is a breeze, and it consistently delivers on its promise, producing flavorful weeknight dinners like pork green chili or chicken tikka masala. Unsurprisingly, since its introduction in 2010, the Instant Pot has experienced extraordinary success, selling millions of units and becoming a sensation in the kitchen.
In 2019, amid this success, Cornell Capital, a private-equity firm, acquired Instant Brands, the company behind the Instant Pot, and merged it with Correlle Brands, a kitchenware manufacturer. The combined entity’s value reportedly exceeded $2 billion. However, a few years later, faced with over $500 million in debt, the company filed for bankruptcy. The Instant Pot’s parent company struggled due to supply-chain disruptions and the limited success of expanding the Instant brand into other household gadget categories. Paradoxically, the ongoing popularity and usefulness of the Instant Pot contributed to the downfall of its parent company. Understanding this dynamic is crucial in comprehending the company’s missteps.
While the Instant Pot didn’t invent at-home pressure cooking, it did introduce this concept to many Americans in a plug-and-play format that eliminated the intimidation associated with traditional stovetop pressure cookers. The Instant Pot’s versatility extended beyond pressure cooking—it also slow-cooked, sautéed, steamed, cooked rice, and made yogurt. Its affordability, with basic models priced at under $100 on Amazon during its peak popularity, made it a low-risk purchase for those curious to explore its features. As the device gained traction, it garnered endless word-of-mouth praise for its ability to simplify one-pot meal preparation. Countless Facebook groups, websites, and cookbooks emerged to guide users in maximizing their Instant Pot’s potential.
The Instant Pot’s success stands out because it effectively solved a common problem for a specific group of home cooks. It captured a small but meaningful slice of the crowded consumer goods market. The device’s triumph was not a result of slick marketing tactics; rather, it originated from the product itself. The Instant Pot became synonymous with its brand and remains so today.
However, this success led to its own set of challenges. A device primarily developed to address a specific food-prep inefficiency has inherent limitations in its potential market. When a product like the Instant Pot achieves rapid and widespread adoption, it can quickly approach its market saturation point. Some customers, who may not have initially considered themselves Instant Pot owners, succumb to the hype. After a decade of skyrocketing sales in the United States, the demand appears to be plateauing. According to market research firm NPD Group, multi-cooker sales, dominated by Instant Pots, dropped by half between 2020 and 2022. Few individuals seek to purchase a second Instant Pot within five years of acquiring their first one.
From the consumer’s perspective, the Instant Pot is a dream product. It delivers on its promises without requiring additional investments. It lacks planned obsolescence, meaning it doesn’t necessitate frequent replacements. However, from the viewpoint of owners and investors aiming to maximize value, these qualities pose challenges. Companies cannot sustain themselves by solely introducing new products sporadically while predominantly selling durable, beloved devices and their accessories with occasional updates. Growth is an imperative for businesses.
Over the past few decades, the expectation that every company should experience perpetual and predictable growth has seeped into various sectors of American business, largely influenced by the technology industry. Recently, it has become apparent that sustaining such expectations is unlikely, even for companies that have produced groundbreaking software products. The same applies to the humble Instant Pot, which, despite featuring a digital display and requiring a power source, thrived not due to technological innovation but rather by ingeniously packaging existing components. Although this fact was evident during the Instant Pot’s heyday, private equity attempted to apply a moneyball strategy, despite the odds.
When Cornell Capital acquired Instant Brands in 2019, it merged the company with Correlle Brands and ventured into new markets with Instant-branded products, such as air fryers, blenders, and air filters. However, these new product lines failed to gain traction. Other established companies, such as Ninja, Vitamix, and Honeywell, already excelled in manufacturing and selling similar products, leaving consumers with no compelling reason to choose Instant Brands’ versions. Although funds were plentiful, a second stroke of genius was absent. Understandably so—achieving the Instant Pot’s level of success once is extremely rare, let alone replicating it. Nevertheless, due to the pressures and expectations of private equity, astronomical success can ironically lead to failure.
Fortunately, the Instant Pot is not completely doomed. Cornell Capital has initiated a restructuring process, enabling the brand to continue operating while seeking relief from its debts through Chapter 11 bankruptcy. However, the predicament stems from the pursuit of growth for the sake of growth, an approach devoid of clear objectives for the new output. Even if the Instant Pot were the greatest kitchen gadget ever created, it wouldn’t be sufficient to rectify this flawed financial logic.
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