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Is barbecue the new crypto? Why grill companies are cooking up IPOs this month

July 18, 2021, 6:00 PM UTC

High heels and luggage haven’t necessarily been flying off the shelves over the past year, but the barbecue grill market is smoking hot.

Demand for new barbecue equipment and cookware has been on fire as grill masters and novices flocked to backyards, porches and patios with ungodly amounts of raw meat in tow. To some, brand new fiery cooktops have become an oasis—an escape from significant others, or perhaps a refuge from a home office office that also serves as movie theater and classroom, depending on the hour of day.

With the rollout of vaccines across the country, Independence Day sent families flocking to their grills en masse, awkwardly reengaging in conversation with people they had forgotten about amid their isolation and sudden year-long discovery of rotisserie seasoning.

While many businesses around the world were struggling to keep their doors open, some barbecue grill makers decided it was a good time to cash in on customers who were fawning over new dipping sauce recipes or pondering which tongs to buy next. In the first two weeks of July, two grill companies, Weber and Traeger, filed for initial public offerings. BBQGuys, an online grill retailer backed by the Manning football family, has reportedly started making plans for a SPAC merger. All three companies could be trading publicly by the time the weather gets cold again.

“Those companies—they see a huge window of opportunity,” says Josef Schuster, founder of IPO indices company IPOX Schuster.

Pandemic stay-at-home culture is a major contributor to people flocking to backyards: 90% of individuals with an outdoor space have been upping their usage of decks, porches and patios, and nearly 60% say they plan to buy new items (such as grills, fire pits or lounge chairs) for their space, according to a January study from the International Casual Furnishings Association, a trade organization for the outdoor furniture industry.

The entire outdoor market has been sizzling—from pool companies to patio furniture producers. Home Depot has struggled to keep its shelves stocked with its newfound demand for outdoor goods. Grills, in particular, are having their moment in the limelight. Weber, backed by BDT Capital Partners, sold $1.5 billion worth of products in the year ending in September 2020, up from $1.3 billion the year prior, according to regulatory filings, and its revenue is up 62% in the six months ending in March 2021 from the year prior. Revenue at Traeger, backed by AEA Investors and the Ontario Teachers’ Pension Plan, was $545.8 million in 2020, up from $363.3 million in 2019.

An IPO could be an opportune moment for these companies to create liquidity for shareholders and employees, build awareness of their business or bring in fresh cash, according to Schuster.

It’s not a bad time to go public, in general: Valuations have been high, public offerings are performing well (encouraging more investors to get in on the action), and there are hundreds of private companies in the pipeline, according to Matt Kennedy, senior IPO market strategist at IPO research and investment company Renaissance Capital.

“There’s both a demand and supply side here that are coming together,” he says.

Of course, there are market challenges to consider: Production issues for steel, which is used to make grills, have led to supply backlogs as well as price hikes. Both Weber and Traeger disclose in their IPO filings that price fluctuations could harm their margins.

There’s also the question of whether consumers will remain quite so backyard-happy as the country continues to reopen. “The sustainability of the pandemic related-tailwinds is a huge question,” says Kennedy. For their part, grill companies say not to worry about it: “85% of grillers globally expect to grill as often or more often after the pandemic than they did before the pandemic,” reads Weber’s IPO filing.

Weber and Traeger have both acquired cooking tech companies in recent years and have been adding new products to their lineup: think smart thermometers and apps that enable you to monitor food temperature from your phone.

Should a few IPOs deliver an influx of fresh cash into the barbecue market, there may be even more sets of tongs for barbecue-crazed Americans to choose from in the coming months.

Correction: An earlier version of this article erroneously labeled Weber’s revenue growth in the six months ending in March 2021 as its growth in the six months ending in March 2020.

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