The company behind the Instant Pot is filing for Chapter 11 bankruptcy as the craze over its kitchen contraption appears to have fizzled.
In a press release Monday, Instant Brands announced the filing in the U.S. Bankruptcy Court for the Southern District of Texas. The company, which was founded in Ottawa but is now based outside of Chicago, also owns the Pyrex kitchenware brand and has at least US$500 million in both assets and liabilities, according to the filing.
Instant Brands was founded in 2009 and became a Canadian success story after its flagship product, the Instant Pot, gained traction in kitchens around the world. The Instant Pot combined a slow cooker and pressure cooker into one device to provide versatility in food preparation.
However, the cooker’s appeal faded as other kitchen gadgets, such as the air fryer, gained steam. Sales of “electronic multicooker devices,” most of which are Instant Pots, reached US$758 million in 2020, the start of the COVID-19 pandemic, but plunged 50 per cent by last year, to US$344 million. Meanwhile, unit sales declined 20 per cent last year in the period ending in April, according to the market research company NPD Group.
Instant Brands CEO, Ben Gadbois, said in a statement that the company is facing “global macroeconomic and geopolitical challenges.” Specifically, he pointed to higher interest rates and the tightening of credit terms that made its capital structure “unsustainable” and depleted its cash.
“As we move through this process, we remain focused on serving and connecting with our consumers around the world, and we are grateful for their trust in us and our products. We are committed to finding a positive outcome,” he said.
The company says it has received a commitment of $132.5 million in new debtor-in-possession financing from its existing lenders.
Last week, S&P Global downgraded Instant Brand’s rating and warned the rating could fall again if it seeks bankruptcy protection.
S&P’s analysts said in a statement that the company saw seven consecutive quarters of year-over-year sales contraction.
“Instant Brands’ performance continues to suffer from depressed consumer demand due to lower discretionary spending on home products,” they said.
The company’s brands also include Corelle, Snapware, CorningWare, Visions and Chicago Cutlery.
It merged with kitchenware company Corelle in 2019, gaining the Pyrex brand. The food storage brand joins Tupperware in its business troubles, the latter of which said in April that it is in danger of going out of business if it can’t raise new funds.
— with files from the Associated Press