HomeGrill ManufacturersTraeger Increasing Promotions to Clear Inventory for New Innovations

Traeger Increasing Promotions to Clear Inventory for New Innovations

Much like we heard from Middleby with their grill brands, it was a soft first quarter for grill sales at Traeger. Unlike Middleby though, Traeger saw growth in consumables and accessories to help make up the revenue. MEATER continues to be a great performer and is the leader in accessory growth.

New Innovations and Promotions

Last year Traeger released the new Ironwood and the Flatrock griddle in Q1, which caused load in from retailers and higher sales. This year they didn’t have any big innovations to buoy their performance.

They’ve indicated it will be a different story in 2025. It’s part of their product roadmap going forward, which is benefitting from a newly completed R&D center.

In the first quarter, we completed the build-out of our new R&D lab in our corporate headquarters in Salt Lake City. The R&D lab is designed to equip the R&D team with tools needed to bring innovation into their physical forms as well as inspire creativity. We believe this new space will greatly enhance our ability to create and will be a driver in our long-term mission to disrupt the outdoor cooking industry with innovation.

Jeremy Andrus, CEO of Traeger

As they prepare for new grill innovations, they will also be eliminating some SKUs. Traeger has traditionally stuck to the good, better, best line-up with their grills, so it’s not surprising that some earlier models have to go.

As previously discussed, we expect our Grill revenues to be pressured by lower sell-through as consumer demand for grills remains below historical levels. Furthermore, we will be lapping the loading of the Ironwood and Flatrock, and we will be sunsetting several grill SKUs this year ahead of future product launches, which will also pressure grill revenues.

Dom Blosil, CFO of Traeger

In anticipation of a new grill release next year, they need to clear out some inventory. The way to do that with a soft consumer is through increased promotions.

One is, as we prepare to launch new products in the future, I think it gives us permission as we get later in life cycle of existing products that have been in the market for some time to lean into promotion as a lever to ensure that — or a good channel inventory position as we launch new products next year. So, that’s sort of top number one. Number two, in a challenging macro economy and notably for the category that we play in, we’re very thoughtful as we look at what is selling through, what trends we’re seeing from a consumer perspective and price sensitivity is certainly one of those. And so, we are measured in how we plan promotions.

We plan our promotions many months in advance, but we feel this is an environment where we will lean into promotion a little bit more, perhaps not in the number of promotions, but in the level of promotion, we’ll be thoughtful to consumer trends and where we think there’s value and opportunity to do any more.

Jeremy Andrus, CEO of Traeger

Traeger plans to stick to the cycle that they’ve been doing of releasing new products in Q1. That gives them quite a bit of time to move inventory of the SKUs that are going away or ones that may sell less because of new products.

This category is one that tends to reset in the first quarter in preparation for the spring/summer selling season. And so, we will stick to that calendar. It’s what works best operationally for us. It’s what we plan on for our retailers…

Jeremy Andrus, CEO of Traeger

As for speculation about what new grill(s) will be released next spring, I think it will be an updated Pro model. Traeger has said before that they release innovation with their top model first and then have it trickle down.

The latest Timberline was released in Spring of 2022, followed by the new Ironwood last Spring. When you look at their line-up in terms of styling and tech, that leaves the Pro as the odd man out and in need of a refresh. We didn’t get it this year, so I think it’s a pretty good bet we’ll get it next year.

With the release of the new Pro model, I think they’ll sunset the Gen 1 Pro. It’s a solid grill, but it’s pretty old at this point with a dial-style controller that isn’t connected. It wouldn’t make sense to have 3 different generations of Pro models with the release of a new one. We’ll see if any of the other Gen 1 grills go away with it.

Grill Industry Overall

Traeger CEO, Jeremy Andrus, laid-out where the grill industry is overall in the replenishment cycle, and the interplay with the housing market and interest rates. It completely aligns with where I see the market as well.

First of all, as I mentioned in my remarks, the environment is soft, and it’s not easy to sort of unpack how much of it is driven by a pull-forward demand from the pandemic versus a soft consumer sentiment is down. Consumer financing is expensive and housing transactions are very low, and all of these things facilitate grill sales or sell-through retail. We spend a fair bit of time thinking about replenishment cycles, talking to consumers, and doing the math on grill ownership period and our general belief is that we should be about to the end of pull-forward demand from 2021.

And then I think as you step back and look at not only this category but other high-ticket discretionary consumer categories, they tend to have some element of cyclicality to it. And so, as we see the consumer strength and interest rates start to come down, we believe those are catalysts to the beginning of the cycle. And we believe that replacement should start — replenishment should start to normalize, certainly in ’25, absent meaningful downside, and the consumer should be back to a fairly normalized cycle. And then the question is what is the impact on the macro on a consumer choosing to wait to get one more year as they do out of durables? In terms of how we think about new versus replacement, as we lean back into top-of-funnel investment, and we’re doing some testing this year, but certainly don’t believe it’s in an environment where we should be investing meaningfully in top-of-funnel.

We will always think about NPS and engagement and ensure that we can drive our existing consumers to our new products. We believe as we look at our innovation pipeline that the first consumer likely to buy is an upgrade from a Traeger owner who bought five, six, seven years ago. But I think we’ll start to see the mix increase toward new customers as we invest in new markets where unaided awareness is low and penetration is low.

Jeremy Andrus, CEO of Traeger
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