In the bid to grow at all costs, Instant Pot is cooking itself

Last week I made a pound of pinto beans in my Instant Pot. They were very good beans and I didn’t have to worry about burning them or leaving them unattended to cook like I do when I cook them on the stove. I didn’t have to worry about them exploding like I did with my mom’s ancient pressure cooker as a kid, either. The Instant Pot cooks the beans very well. It cooks quite a few things very well. It’s reliable and affordable, and while it sucks at searing, it really does feel like a multipurpose device.

And right now, Instant Pot, despite making a very good product, is not doing so hot — today, its parent company filed for Chapter 11 bankruptcy while saying that a new deal for $132.5 million in financing from its lenders will support the company while it figures out a path forward. In January, the Wall Street Journal reported Instant Pot had hired restructuring advisers, a common tactic to help pull a company out of dire economic straits, and in March, dropped a story about the company’s quest to find another hit product. Which is fair; it might need one. While we don’t have exact numbers for Instant Pot’s decline, we do know sales in the electronic multicooker device category are down 50 percent since 2020. Given Instant Pot makes up the majority of that category, that’s one big reason it’s not doing well.

We also know that in 2021 it canceled $100 million worth of orders from retailers, which might have created some welcome scarcity in the short term, but which likely contributed to the cooling of appetites for Instant Pots from both retailers and consumers.

As its sales have waned, its need to continue growing has not. Which has led to things like an Instant-branded air purifier and an Instant-branded convection oven (I hate calling them air fryers), and perhaps today’s bankruptcy announcement.

Part of the need to keep growing is because the company has gone from just the four founders back in 2009 to over 1,900 full-time employees, and payroll needs to be made. A spokesperson told the Wall Street Journal that since 2020, the company has laid off nearly 15 percent of its employees.

The other reason it’s absolutely got to keep growing is that there are expectations placed upon it by Cornell Capital, the private equity firm that acquired the Instant from its founder in 2019 and merged it with Corelle Brands, which makes all the Pyrex and CorningWare products you probably heat up leftovers in.

It’s not the first company that’s had this happen to it. Too often, a tech-adjacent company gets saddled with the expectations of the tech space. You’ve got to have infinite growth and constantly be finding new categories to wade into rather than simply being just extremely good at a specific thing.

Being extremely good has the benefit of high quality, but it means slow growth, smaller profits, and susceptibility to fluctuations in the market—such as, say, everyone suddenly working from home and having less need for a product that’s really good at cooking things fast and unattended.

Chasing constant growth, even in good times, comes with its own problems. You’re usually saddled with debt you took on to fund your new projects, and end up launching all kinds of projects to see what will stick. When it works out, meet Gmail, iTunes, or Stranger Things. But if you fail, you get things like… Google Wave, Google Stadia, Google Plus, iTunes Ping and uneven remakes like Cowboy Bebop. The difference between the likes of Apple, Netflix, and Google, and this situation with Instant and Cornell, is that Apple, Netflix, and Google are already enormous companies making the bulk of their money in phones, subscriptions, and advertising, respectively.

Instant Pot’s current CEO, Ben Gadbois, certainly understands the situation his company is in. He told the WSJ that the Instant Pot was a “product phenom and product phenom ultimately, eventually they slow down.” This is why he’s encouraged the company to develop and sell new products like an electric Dutch oven, stand mixer, and coffee maker.

He’d rather find a new phenom, chasing the profit to other categories, instead of reinvigorating the one his company popularized. And look, while Instant has promised a redesign for the Instant Pot that Gadbois hopes will encourage people to replace their old ones, the Instant Pot could be improved in ways beyond cosmetic ones. It could, perhaps, not make gummy rice requiring me to own a separate rice cooker. Or it could make a heating element that actually sears meat instead of doing the sad little sizzle of the Instant Pot.

I’m a fan of the device and of its potential. But hearing about an electric Dutch oven (isn’t that just a CrockPot?) and a planned stand mixer that’s unlikely to replace my Kitchen Aid — I’m also wary, and not particular surprised by today’s bankruptcy announcement. Sometimes you don’t have to grow at all costs. You can just be very good at one thing.