Instant Pots were considered an essential product early in the pandemic but lower discretionary spending on home products forced parent company, Instant Brands, to declare bankruptcy this week.
The kitchen ware giant’s decision to file for Chapter 11 bankruptcy protection followed a year of of low sales for its appliances, including the notable electric pressure cooker
The filing with the U.S. Bankruptcy Court for the Southern District of Texas highlights the impact of inflation as Americans reduced spending on its products including Pyrex glassware. The Illinois-based company listed over $500 million in both assets and liabilities.
Instant Pots found exceptional success earlier in the pandemic as consumers spent more on home goods. Consumer spending habits have changed with more people traveling, eating at restaurants and generally leaving their home.
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The company’s sales of “electronic multicooker devices,” which primarily includes Instant Pots, reached $758 million in 2020, the start of the pandemic. Since last year sales for those products plunged 50% to $344 million, according to the Verge.
The bankruptcy process will not impact the ability to purchase products as Instant Brand will operate as usual with the help of $132.5 million in new financing.
“After successfully navigating the COVID-19 pandemic and the global supply chain crisis, we continue to face additional global macroeconomic and geopolitical challenges that have affected our business,” CEO Ben Gadbois said in a statement. “In recent months, we have been working closely with all of our financial stakeholders to position the Company for its next phase of success.”
Gadbois clarified that a “tightening of credit terms and higher interest rates” has hurt the company’s liquidity levels making their capital structure unsustainable.
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S&P Global data showed the company’s sales decreased around 22% during the first quarter of 2023, compared to the year before, marking their seventh straight quarter of declining sales.
Earlier this year, the Federal Trade Commission announced it would require Instant Productions to order Instant Brands to no longer claim that Pyrex glass products were made in the U.S after the federal regulators found many of the manufacturer’s Pyrex cups were made in China.
The FTC complaint claimed that Instant Brands began to produce some Pyrex cups in China from March 2021 to May 2022 to meet the high demand for its glass measuring cups as consumers raved over home baking. The complaint added that “Pyrex has long used the U.S. origin of its products as a selling point. “
