YETI has an investor day at the end of last week where they detailed their long-term strategy. They have as strong of a brand as any, which is one of their main keys to success as they continue to expand into new product categories and internationally.
Their hard coolers are what originally made them popular with consumers in outdoor cooking. They used their standing to expand into cast iron through an acquisition. They haven’t engaged in much M&A through the years, but it’s part of their long-term strategy to add capability or speed.
We’re highly selective on inorganic opportunities, and our track record shows it. Four acquisitions over 12 years in bags, home and cookware, powered coolers and hydration. We use M&A to buy speed or capability, typically in the form of product knowledge, intellectual property, specialized talent or development capacity that can strengthen the YETI platform. It’s simply a form of product development and typically small in scale, having spent only $116 million across 4 transactions. We’re really happy with the results we’ve seen in our recent acquisitions.
Mystery Ranch gave us capability and talent that serves as a backbone to our fast-growing bags business. Helimix gave us product adjacencies with a real volume potential and really strong early trends. Our powered cooler and Butter Pat acquisitions gave us capability and innovation in categories we couldn’t build fast enough on our own. Our discipline goes far beyond the term sheet. We guard the brand, integrate quickly and measure the returns. The threshold is high. Any transaction must protect brand trust, have a credible integration path and offer attractive returns relative to organic alternatives and returning cash to shareholders.
Scott Bomar, CFO and Treasurer at YETI
After their acquisition of Butter Pat to get into cast iron, they continued to move to adjacent indoor and outdoor household categories. They released a fire pit and then a carbon steel cookware line.
Next up in outdoor cooking for YETI appears to be enameled cast iron. They mentioned it on their investor day session.
In home and hydration, you heard a good bit about it from Hannah today. But cookware is a new frontier as she discussed. Carbon steel is in the market. The early response has been strong. It was recently recognized best of by a number of publications. It’s a great example of product ready to be executed by a commercialization engine, the one that Stuart, David and Mitch talked about. Cast iron is a natural anchor in the platform. It’s very YETI. The next large and attractive market expansion is enameled cast iron, continuing the theme of live fire outdoor to indoor, translating the YETI philosophy and product trust to people who take cooking as seriously as we take everything else in the backyard, the camp site, the kitchen.
Matt Reintjes, President and CEO of YETI
Enameled cast iron has been popular in outdoor cooking in recent years. Some notable products were a Made In x Traeger collab, and Lodge leaning more heavily into enamel.