Traeger, Weber battle it out in barbecue IPO mini-boom as consumers spend billions on outdoor cooking

The popularity of at-home barbecuing and grilling skyrocketed amid the pandemic as people stayed home and cooked more meals instead of dining out.

Now several leading barbecue companies are looking to take advantage of that growth through initial public offerings, including Traeger, which priced its initial public offering at $18 a share on Wednesday, the high-end of its anticipated deal range and at an implied $2 billion valuation. It is expected to begin trading on the NYSE on Thursday under the ticker symbol “COOK.”

More than $1.8 billion worth of grills, smokers, grill accessories, fuel, and stoves and accessories were sold between March and May in the U.S., a 5% increase compared to 2020, according to NPD.

Grills and smokers made up $1.1 billion of that, a 3% increase from 2020 and nearly double from 2019. In total, roughly 5.4 million grills and smokers were sold in the three months, the peak period for barbecue sales. While that is down 10% from 2020, it’s up 81% from 2019.

Joe Derochowski, home industry advisor at NPD, said a few factors drove those numbers up but mainly that people have been eating and cooking more meals, as well as a strong desire to do anything outside where you can invite people over safely. People have also been looking to experiment more with their food, leading them to buy new things like smokers or other accessories for their grill like a pizza stone.

“Last year we did everything we could to get outside, and you saw the growth in things like outdoor toys and sports equipment,” Derochowski said. “When you crave being outside, you start to eat outside, which leads to more grilling and cooking outside.”

Traeger, which is known for its wood pellet grill, and its rival Weber, are two of the biggest benefactors of the heightened interest in grilling. Weber recently filed paperwork with U.S. regulators for an initial public offering.

Weber says it’s the industry leader in the U.S. — the biggest grilling market globally — with a 23% market share, citing a Frost & Sullivan report. It also says it is the top brand in several of the other top grilling countries, which include Australia, Canada, France and Germany. In total, it says it has sold 30 million grills in the U.S. and 50 million globally.

The company reported $963.3 million in revenue for the six months ending March 31, a 62% year-over-year growth. While Weber sells its products on Amazon and at Home Depot and Lowe’s, the company also has 170 branded retail locations and its e-commerce site. Its direct-to-consumer and website represented 20% of its business in 2020 and has grown 31% annually since 2018.

Weber, with a history in grilling that dates back nearly 70 years to when it claims its founder invented covered charcoal cooking with the dome-shaped Weber Kettle, has benefitted as the grilling category has expanded. Sales of its grills, which range from $40 to over $1,000 and include gas, charcoal, electric, pellet, and smokers, made up 74% of Weber’s revenue in 2020.

“We are now creating multiple new products every year as we continually innovate to advance the craft of grilling globally,” Weber chief executive officer Chris Scherzinger said in the company’s S-1 SEC filing. Weber declined to comment, citing a pre-IPO quiet period.

Innovation in grilling is what fueled the growth of Traeger, which says that it’s the “creator and category leader of the wood pellet grill.” Using pill-shaped pieces of wood, consumers can use Traeger’s grills to smoke, roast, braise, bake, or barbecue. The company’s grills range from around $500 to $2,000 — Traeger said the average price in 2020 was $839.

Traeger said that it has approximately 3% household penetration in the U.S. and that it has sold 2 million grills in the U.S. from 2016 to 2020. It also notes that brand awareness of the wood pellet category is only 25% among U.S. consumers.

In 2020, Traeger reported revenue of $545.8 million, up from $363.3 million in 2019. Over the first three months of 2021, it had revenue of $253.6 million, up 107% year-over-year. Traeger declined to comment, citing a pre-IPO quiet period.

Both companies are hoping that their public debuts further fuel their growth, with both planning deeper investments into technology and product development. Weber, which plans to trade on the New York Stock Exchange under the ticker “WEBR” could be valued between $4 billion and $6 billion.

The push of the barbecue companies into the public market has also been beneficial for BBQGuys, an online retail platform that not only sells grills and accessories but other outdoor living products like fire pits and patio furniture, and is planning to go public through a SPAC deal.

“Outdoor is the new indoor; people are bringing their indoor living spaces outside after being trapped inside,” BBQGuys chief executive office Russ Wheeler said. “The grill is certainly the centerpiece of that, but that could also include a wine fridge, built-in heaters, weatherized TVs, or firepits.”

BBQGuys reported $264 million in revenue in 2020 and said it has had 27% annual growth over the last 15 years. The company not only sells Weber and Traeger products on its website but also its brands. Through a SPAC deal with Velocity Acquisition Corp. announced earlier this month, BBQGuys would be valued at $839 million. It plans to be listed on the Nasdaq under the ticker “BBQG.”

In 2020, the company was acquired by private equity firm Brand Velocity Partners in a deal that also brought on the famous Manning family of NFL quarterbacks as investors. In recent months, both Peyton and Eli Manning have been featured in marketing campaigns for the company, which Wheeler said is part of BBQGuys’ effort to “creating an outdoor living lifestyle brand and ecosystem.”

Having consumers lean into barbecuing and going beyond just basic foods has been a big part of the industry’s growth, said Emily McGee, spokeswoman for the Hearth, Patio & Barbecue Association, a trade group representing companies in the industry.

“You’re seeing people who may have cooked their hamburgers inside because the grill was only something they brought out on the Fourth of July or Memorial Day weekend suddenly using it a lot more,” McGee said. “Suddenly the grill became more of a usual cooking tool, and now people are saying ‘This is great, but maybe I want another,’ or going from just a charcoal grill to a pellet grill or adding a smoker or a pizza oven.”

McGee said while she thinks barbecue grill sales may cool slightly as more people start to frequent restaurants again, at-home grilling is a trend that shouldn’t be expected to go away.

“I think overall people have loved what they’ve experimented with on the barbecue and grill and want to keep doing it,” McGee said. “Everything tastes better on the grill, that’s a fact.”