Future Vision and Product Innovation

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I'm I Pell,etitor andie of the Verge and Codeer is my show about big ideas and other problems. It's the fourth of July, and this is our annual grill episode. we invite the CEO's of outdoor cooking companies onto the show to explain just how their businesses kind of look like every other business. And this is a very special edition of our grill episode Today I'm talking to Roger Dolly, the CEO of Weber Blackstone full circle moment for dececoder Roger was our first ever grill CEO on the show, back when he was the CEO of just Blackstone He started the company in two thousand eight, but these griddles exploded in popularity during the pandemic. When videos of smash burgers went relentlessly viral on TikTok. The company grew so fast and so furiously that Roger was able to buy Weber a couple of years ago, a legacy company that had fallen on hard times. Fun fact, we wanted Roger on the show last year to talk about that deal, but it was stuck in antitrust review at the Federal Trade Commission. So Roger and I talked about all that, what competition review entails for a merger of grill companies And what it takes to manufacture these products overseas and import them to the United States in an age of high tariffs and even higher energy prices, which are pushing consumers down market. Of course, we also talked about what it means to merge with Weber, a storied company with iconic products that have gotten really stuck in its ways and pretty siloed. Roger seems very eager to break those silos down and create a new company with a new culture Like I said, there's a lot in this one, including whether or not the chip market is affecting Weber's connected thermometer business. It's pure dec coderba through and through. Roger was great in this one. Can't wait for you to listen to it. There's Roger Dolly, CEO of Weber Blackstone. H we go Roger Dolly, you' the CEO of Weber Blackstone. Welcome back to Deoder. Thank you. Good to be back I am thrilled to have this conversation. Five years ago, twenty twenty one, we thought It would be so fun to talk to Grill CEOs in the summer Because one of our theses here in Dakoter is all these companies have the same problems and it's a summer and we should go talk to grill companies And at the time, we made a list of all the companies we want to talk to, and we put Weber at the top. because they were the big brand name. They said no, and I was like, we got to talk to Roger at Blackstone because I'm watching TikTok every day. And bllacksens are going viral on TikTo And so we start with you. You are first ever guest in this series, and now you're the CEO of Weber. And I feel like that is just about as perfectly full circle as it gets. So thank you so much for coming back. Yeah, I didn't see that coming when we talked couple of years ago. A lot has happened. Weber was bought by private equity. You had a SPAC that came and went, you didn't go through with it, and you bought Weber. Let' just about how all of this came together. Blackstone's been around since two thousand eight We won't go through the whole history. People go listen to that episode if they want to. two thousand eight you started it, you went super val in twenty twenty one. You did a lot How did you end up in the position to combine with Weber, which really turned out to be more of an acquisition So Interesting in twenty one I have to go back to twenty fifteen. Blackstone was growing so fast I needed to get a manufacturing partner that I could rely and trust on knew a family from Taiwan that had facilities in mainland, China Father son combination, good friends and they had never been in outdoor cooking before. So we started together and they in fact became an equity partner in the business in twenty fifteen. They were building for me a little bit before then The business was so successful and grew so rapidly from fifteen twenty that The father of the father's son Combo was at retirement age and he wanted to slow down. so they were looking to sell their equity in the company, which started this whole process of me going into the financial markets and talking to investment bankers and going through that whole process which led to almost going public via the SPAC During that time and through some of those roads shows, I met Byron Trott, who owns BDT He actually has owned Weber since twenty ten, if you can believe it. So his company's held on to that position for over sixteen years now And he loved the story of Blackstone and we actually went through a pretty serious process with them about a potential acquisition of Weber of Blackstone So Weber would acquire Blexson. Back originally. Yeah. It just wasn't right, timing wasn't right. There were just a few things that didn't line up at the time. So we ended up not doing that transaction That's when we almost went public via the SAC. and then as you know, the financial markets fell to pieces And Weber and Traeger coincidentally had already gone public and their stocks had horrible experience. you know, they came out ran high and went really low So the SAC bill didn't work. And at that point, I did find a financial partner, private equity group possession of my Chinese manufacturing partners shares That was in twenty two and then in twenty four we had continued to grow at Blackstone and had phenomenal success. We were very fortunate. Again, we had accomplished really in two years what that financial partner thought would take five. So we decided to test the waters and see what the next transaction looked like Byron found out that I was thinking of that again, called me up and said, let's do a merger, let's not do acquisition, but let's merge these two companies together And so we came to an agreement in twenty four endnd of twenty four and then we had to go through antitrust process with the FTC and that took until May of ' twenty five. So we've been merged together now for just Barely over a year It's funny, we asked you to come on the show last year for this episode because we'd heard about all this and I thought this is fascinating. We have to get Roger back. you declined because you were in the middle of this antitrust review process. I'm curious about that. This is the Trump administration. They're historically very friendly to deals. This is not Lena Khan's FTC Why did it take so long? Why was it so complicated This isn't like a big tech deal. this isn't paramount. It was an easy deal Unfortunately for us, we We signed our agreement in December and that's when the clock started ticking with the FTC. Well They're not going to get anything done December with all the holiday breaks. They have thirty day windows to look at your deal and say, yes, you can merge or No, we want to take a further look. So they extended that till the end of February then they extended it one more time because all the commissioners and the new administration hadn't been appointed yet So we just really got stuck in No man's landb because they they have five commissioners in Washington, D.C as I understand. And I think twow were in place or three, but they needed all five to be in place. As soon as they were fully staffed They called us up and said, yeah, your deal's fine, goo ahead So it just took a minute. I think we were just in the middle of transition with administration I look at grill industry the outdoor cooking industry as you call it, and there seems to be a surplus of competition. There's infinite brands showing up constantly. Last year, we had the CEO of Shark and Ninja. they had just put out a grill because they saw opportunity in the space. Do you feel like you've reduced competition by acquiring Weber? Do you think that the competition is getting more ferocious? compometition's always there. And the other thing about our industry as an outdoor cooking, every major retailer has their own in house brand private label I could own every outdoor cooking brand in the world and I still couldn't affect the consumer retail price. Beuse my customer is is really in charge. They walk into a store online, wherever they might find our products for sale. And if they don't like the retail price, they don't buy it So the FTC is really focused on competition and making sure the consumer is protected, which I love. I think I have no problem with that I want the consumer taken care of and protected as well But my business is very competitive There's always somebody new coming along like Sharark Ninja, who'd never been in the business before And then people who've been around for a long time compompetitive companies that haveve been around for a long time. And then on top of it, I have my retail customers with their own private label brands And so if retail prices get out of hand or they think they're too high or if they think a product has been more commoditized They put their private label brand on it and offer it to their customers Do you supply any of that private label stuff I don't think Home Depot is actually manufacturing in sun grill. Do you supply any of that white label product? I don't, but I know most of the suppliers, the factories in Asia who do And arere they competive with you? or are they price sensitive to you? this is just a market that I think It's so physical. The products are so big And then they do turn. People buy new ones kind of all the time. So it's just a different kind of competitive dynamic. To have the white label supplier right there and so top of mind for you. Yeah. It's really kind of a go to market strategy that each retailer deploys and how they think about it and what retail prices they want offer their customers and what features benefits they want to offer at those price points And so if they can better serve that price point and that feature set using their own label, they will. But if a brand, for example, Blackstone For a long time, none of my customers carried an in house griddle, for example, because They wouldn't sell. Theyd put them out there and people would step over them around them I don't mean physically. I mean over the price point to buy a blackstone. So we were very fortunate that way. But if you look at gas grills, Loowe's Depot, most of the retailers, Walmart carry a house brand because they can offer their customer the value they want at that retail price point. It's really a merchandising strategy that they use And I think it works. I think it's great for the customer. It's tough right now at retail, as I'm sure you're aware Oh yeah, no, I want to come to manufacturing the products. You've mentioned China several times already, that obviously that it's changing that dynamic We the hardest summer. I'm sure this is the high season for you It's not getting easier. So I want to come to that, but I just want to say in the deal for one second Weber is it is the household name. Like I said, we made the list of grill CEOs and obviously you put Weber at the top. You are now the CEO of Weber. My understanding is that Weber's business was not doing very well. that there was some inherent flaw in that business. We've done a lot of episodes about private equity, takeovers and how the PE firms tend to extract the profits and not invest in innovation, especially for big legacy companies. Was that your assessment of Weber? Was that the opportunity? No, BDT is a phenomenal financial partner. I mean, I love working with them and Byron Trot is at the top of the list, I think, behind the scenes in that industry Weber, in my opinion, in my assessment, when we took over and started being able to look. becausecause until we had FTC clearance, one hundred percent clearance We couldn't really see anything other than public information It's a typical legacy type company with a big brand and great presence great product phenomenal quality Really good people. I love the people that were working there and the culture that they had But in my opinion, there had been some C Site turnover that was way too high and different philosophies on how to serve the customer And as a result, expenses got way out of hand And then as you know, a private company versus a public company, the cost structure is completely different And there's a lot of expense in being a publicly traded company That hadn't come out of the business yet So the product sell through at retail and the perception within user customers has never been better. It's extremely well the profitability of the company was challenged and needed a different I think I think it's why Byron wanted to merge this is because we just do things completely opposite of the way they had done it traditionally at Weber And especially over the last I'm gonna say seven years Because, you know, for many years, the Stephven family, who were George Stephven is the founder of the business then his son Jim took over his CEO for a long time until they sold to BDT They're a great profitable business and up until twenty twenty twenty nineteen They did extremely well So really the last five, six, seven years, Yeah, the timeline here just I just want to clear it up for listeners because you're talking about BT a lot and they've been in and out of webber a long time, It's tr So they bought a majority steak in Weber in twenty ten on Weber IPOod in twenty twenty one. It didn't go well, right? They only raised two hundred fifty million. I think their target was five hundred million do in twenty two BBT took Weber back private So then they were the full owners. And then obviously in twenty four, you announceced you're going tobine So they the P firm took the company back private. Were they sort of immediately looking for a buyer orr was it just you showed up and they happened to know you quite well? U I don't think they were really looking for a buyer The merger made a lot more sense, especially by combining the strengths of both companies and then just cleaning up. it's a phenomenal opportunity. you know, we have Legacy brand and then Blackstone's innovative and disruptive and It's still growing. so yeah, it's a great combination. It's been a lot of fun so far Tell me about the mechanics of this? You're saying the way you do things is differently than the way that Weber had done things traditionally. They are a legacy brand. they've been around since the fifties. There's a world in which they just have to keep selling Weber kettles. and that is the thing they have to do. It's literally the logo. I have a summit grill one of the fancier grills, my father in law bought it for me ages ago. The thing has been rocking and rolling for a decade What does Blackstone do differently that Weber wasn't doing that created the opportunity. We're an entrepreneurial led business and that's the way I like to think and operate and spend money and not spend money. And I don't think Weber's alone in this. you get a company that's been around seventy plus years You start getting too structured, you start getting too layered and you start getting too siloed and that's completely opposite of the way we do things. Let me explain it this way So Part of the culture at Blackstone that I've always tried to instill is if you're walking through my parking lot and you work at this company and there's a piece of garbage on the ground, you bend over and pick it up Put put it in the garbage can Not because you have to, but because that's what you do. That's your culture. You want to make this a great place to work, great environment. When I got to whereever I wondered if that was the culture And What I found out was it was not. And not that they wouldn't bend over and pick up a piece of cararbage, they'd be more than happy to do that They're not too proud, they're not underneath there But If they do that, they fear that they might be taking the janitor's job away And so out of respect to their coworkers, as strange as this sounds They stay really siloed and they they start here, they end here and this is what I do. And if I try to expand beyond that It throws off the whole system of the way we do things. It's very, very structured Everything has to be tidied up put in place perfectly before the next step can even begin to happen and we start off At Blackstone, we've always done the speed to market with new product, new product development to me is critical and essential. I can't take three years to get a new product in a box. I got to take three months And so that's the differences that I'm talking about. Philosophies spepeed to market Their mapped price And we're not. I've never been a Mapped price. I don't know if you're familiar with that policy. Can you explain that to the listeners? So MAP stands for maintained advertiseed price. and so We were sales four and ninety nine gas grill. Everybody's the same retail. And they can't control retail prices, but what they can do is say, this is what we want you to advertise it for If you do that and maintain that advertised price, you will be eligible for the rebate you get from our advertising department. And so you know nobody can control retail prices. That's anti competitive you can have a mAapP policy with your retail customers. So everybody's the same retail that sells Weber, whether you buy it at Walmart, Lowe's, Ace, Depot Wherever you buy it, if it's the same grill, it's going to be at the same retail price point I've never been a mapped price policy with Blackstone I don't want to cause confusing with my confusion with my customers. And so what we've done successfully is we've developed products of families that we sell to our retail customers. And that way Everybody kind of has their own product and it works great because we merchandise with the retail customers to their customers And that's really what we try to focus on is the end user, the people who are walking in laying down a credit card to buy a griddle or a gridll they're expensive. This is not D hand of the moment fly decision that people make. This is an expensive product that they buy that needs to last for a long time. so they take their time to make a decision. And so we like to give our retail customers features and benefits and the value proposition that they're really trying to get for their customer who walks into their retail store Can I make the comparison to tech companies? This is why I love doing a girl epise of over year You're describing a lot of things that obviously you've thought about very deeply in your corner of the industry. Tech companies do this all the time. Samsung makes a different phone for every carrier, right? The Samsung Galaxy S twenty six, it's actually slightly different for every carrier so they can play these same games with MAP, right? mininimum advertised prices Apple won't do it Right? The iPh's the iPhone and maybe there's like radio differences, but the ihonees the iPhone. And you see there's competition the market that way. Right withith Blackstone, the answ the culinary line is at loows, but it's not at depot. It's you've got you're literally making different products or at least different branding for all of your partners You're also describing what I would call pure decoder bait. that Weber had this extremely divisional organization that was very process driven. And you have it sounds like I'm going to ask you the question more directly, but it ss like' a more functional structure You're really product led Pro development led All that comes together, right? But you've got to change the culture at Webber. You got to go into this company that is has a different business process, right? You've got to take your company, which approaches the retailers like Apple and go into a company that approaches the retailers like Samsung And then you've got a functional structure and you got to go into a very rigid process oriented divisional structure It's been about a year Did you just smash glass and make all the changes? Like how does this work? A little bit, there were some hurt feelings here and there and kind of on both sides. That's been really interesting to me. It's just kind of watching the way The team at Blackstone reacted to this and the team at Weber. One thing I absolutely knew and' proven to be true is that I was going to find people at Weber. who were just dedicated phenomenal employees who may have a little bit of pent up ideas and ambition and wanting to do things differently, that's certainly been the case So I got to unleash those people and let them go do things the way they thought that they wanted to and the way that they thought would be better. This is a better way to serve our customers. Let's do it this way instead of that way. So that's been really fun. But I did hire a consulting firm to come in and help me with the integration And it was a good decision. I didn't really start hard on integration until November of last year The first four or five months to try to learn and see and understand and get to know people And candidly, I had to really evaluate the C Site that merged in together and see how that all worked. and I had to make some changes there So it took a minute from the top you know, really integrating my C suuite and then moving it out to the rest of the organization And really we're still in that process. It's going to take me another year to fully done but the results are phenomenal and the momentum has been building and It's really coming together. Most people are never going to hire a consulting company to manage an integration This is a this is a pretty high order thing to do. Like very, very few people have to make the decision of which consulting company to pick. How did they pitch you? How did you decide When I had my previous financial partner They you know, a week after we closed the deal with them. this is going clear back to twenty two They parked their consultant in my office in Utah because they wanted to see how they could help improve And he worked for that company, but he had spent his career with one of the really big consulting companies in the US. you could probably guess which one and So he was really, really sharp and learned a lot from him When I went to hire a consulting company, I called him up and asked for recommendations because he still hires them to this day. When they invest in a company, they bring a consultant in to kind of help if they're integrating or just trying to improve process So I called him, he gave me four names and gave me the contacts for those four names. I called each company and then I just took them through an interview process. just like you would hiring somebody And then I also included two of my board members who haveve had a lot of experience with integration. And they stepped in and together, it was a pretty easy decision for us which way we went. And it's turned out to be a really good decision. They've been really, really helpful. One of my tropes here around Dakoter is that culture is really important and structure really defines your culture And I've had people just straight up disagree with me. There are COs who are like, no culture is its own thing. You can change the structure as much as you want The culture just comes from leadership You're integrating two very different cultures, to very different structures. It sounds like you know what you want, right. You're going to You're going to change both companies, it sounds on both sides ever so slightly to get to the outcome you want. Is it more of tellelling everyone to pick up the trash culture change or is it more structure change? Let me answer that this way So A lot of people advise me and they're like, well, know, when you start doing this integration, you want to take the best best practices from Blackstone and the best practices from Weber and merge those together And I said, well, I don't know if that's what I want. What if the best and the best are just mediocre and not the best? I want world class. So I want benchmarks of the best Fance department, the best operational team in the world, at whatever company And so I've really tried to approach it from that viewpoint. and then the culture I think culture comes from everybody unifying and having a common goal of what they want to do and what we want this company to become and having Enhusiasm and excitement and pride So when you come to work, Whether it's Monday or Friday or any day in between, you're really excited to get in the office and get gone because you're going to make a change And you're going to impact the business and it's going to be exciting and it's going to be rewarding employee That's really kind of where I'm keing my focus. We need to take a quick break, we'll be right back Support for this show comes from Vanta What's spreading through companies faster than AI? 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Ai slash decoder and get AI that turns insights into action That's R I P P L I N G AI slash decoder Sign up for exclusive access today. Let me ask you a cod of questions now. It sounds like you've a ways to go in this integration How are you structured now? Is it two different companies? One company of two divisions, how is that working? One company with two Awesome brands is how we're structured. And then under that, are you sharing R and D? or you sharing product development? Yeah, and kind of by centers of excellence, if you will, and we have Beautiful office in Chicago out in the suburbs. We have a new office here in Utah for our headquarters that we just built I was doing that anyway coincided with the merger. We have R and D facilities here in Logan and in Chicago. and then we have teams around the world. Weber has a big organization in EMIA And we have a manufacturing facility in Poland that's state of the art and about four years old We have operations in China still, and we've moved to Malaysia, Vietnam, and Thailand for manufacturing And so we have staff and people there as well. So keeping it based on centers of excellence and where expertise lie Be nobody in Logan had ever built a gas grille before, so I'm not going really take those engineers and try to expect them to get up to speed. and vice versa with griddles in Chicago Weber had built a griddle. They built the slate. They went after a bunch of your influencers. There's like a tiny little scandal in Grill influencer world that Weber had done a bunch of integrations A you canceling the slate Uh no, because there's still consumers who love the Weber brand, but will merchandise it by feature benefit and value proposition based on retail price point and retail placement So You know, if you look at our industry We're small as far as numbers of doors that sell our products Well, I shouldn't say it that way because there's a lot of doors, but There's Home Depot Low's Ace Walmart, Amazon, Costco And then it goes way down from there as far as potential volumes with retail customers. so it's a relatively small. customer base And so we have to do business with everybody, number one And I want to please my customer, again, I really try to focus on the end user And we have extremely dedicated weber customers and we want to offer them. products, but There's no reason, for example, for Weber and Blackstone Brand to both have a hundred and fifty dollars griddle. That's really kind of more of a blackstone type price point But if there's a retail customer who wants an upgraded griddle and they want the Weber brand and a longer warranty experience then a seven ninety nine slates is probably the answer for them So let me ask you about that. Just the development of that product is you combine the companies and you combine these cultures Blackstone every year I just like look at the product catalog. I'm like everything is brand new Right. It's almost like the company is starting from scratch over and over again. Weber is very classic That kettle has really not changed. And the summer girl that my father in law bought me ten years ago and the summer girl today They're virtually identical. In fact, the big difference is, I think the new one can accept griddle plates in mine. That's like fundamentally the difference. That's a different approach to product development. Are you going to have one product development team? drives a roadmap for both brands or does Weber get to have its own griddle development team because the price point is different No, we have one we have one R and D group. We have consolidated that. It was one of the first Dpepartments I wanted consolidated, even though it wasn't the easiest. because we have great talent in both offices now. So the VP over R and D And then it staffs out from there And we assign development groups based on grill type basically So we'll have product management and industrial design and engineering for gas glls, for griddle But if we have a group working on griddle, they can work on either brand and vice versa with gas glls. if Blackstone decided to ever get into gas glls, that team would develop that for Blackstone So this reminds me with you know Mary Bara from GM on the show, and she has Buick and Chevy and Cadillac and There are shared platforms for those cars And then there are brand teams that build on top of those platforms. Is that the model that you're going after here? Pretty much. there's companies who Black and Decker may be one. I'm not one hundred percent sure, but they might have a DWalt team and they don't share resources, say with the Stanley team. But I don't know. I'm just using that as an example I mean, you could go down that road and have that model They even have salespeople dedicated by brand. some companies do. where I'm not going to retail that way. If I go into Costco My sales team that calls on Costco, the commercial team or they're representing both brands. to the buying teams there And then I'm assuming that the rest of your functions IT and legal, that is all just long since combined. You said something really interesting. I just want to come back to it really quickly. You said there were hurt feelings on both sides. Whatere were the hurt feelings on the black side side? Weren't you just the winners It feels like you're the conquering heroes here. No. I mean The reality is is Everybody can improve and everybody can get better And one of the things that I've really fought hard to maintain was making sure that at Blackstone we didn't get complacent Because we've had a lot of success for a long time. We've had a great run. can breed complacency You better to wake up every day and feel like you're starting at the zero yard line and you got one hundred yards to go. Nobody gets to start at the ten yard line. So That was that was some of the o, we're Blackstone. We've done extreme. We know what we're doing and Weber's been old and slow and Now I won't put up with that kind of attitude. so That's a little bit about what I was referring to. How many people as a combined company? How many employees do you have About twenty one hundred has that split between Weber and Blexon? High majority at Weber. And keep in mind, there's two factories there And so there's a lot of employees in the factories both in Poland and in the United States And will that division maintain that some are Weber people and some are Blackon people or you can have it like a central company and then the two brands express differently a central comppany is what I'm driving for. This is one company with two awesome brands And then just real quick, how would you define the Weber brand? and how would you define the Blxtson brand The Weber brand is it serves the customer more on a premium level And it is for Yeah like when you want to cook serious and you want to take your time and you want to craft, crafting is kind of the word I use to describe Weber Blackstone is fast and fun and easy. and variety Weber more of the crafting style of food I feel like I could waste an hour on that, but we're gonna're that one good because It want to wait all time I need to ask youoder question. I think this has changed for me over time. How do you make decisions? What's your framework now I make decisions by counseling with my executive leadership team. I love to bring everybody together when there's a tough decision because I want, and let's say it's a marketing decision. I expect my finance guy to chip in and make a contribution as to the comments If it's a finance decision, I expect the sales guys to chip in or my commercial leaders to chip in and talk about it. So I've tried to get everybody together really go more through a counseling process. I think we make better decisions when we get all of our brains working together And then I'm the final vote decider. if I don't like what they all think together, then I'll decide what I think is best But I have found over time and over a lot of experience and making good decisions and making bad decisions Better decisions are made when I get everybody working on it together You mentioned how had to make a lot of decision on people, right? There' hurt feelings on both sides And you wanted to really evaluate their C suite and their people and Maybe they were doing things better than the blackion side was Making decisions with people is really hard. It sounds like you just had to make a lot of decisions on who to keep and who to move on from How did you make those choices and how did you communicate those choices So we went through quite an elaborate process with the executive leadership team and they each took responsibility for their areas And they went through working with our consulting company U line item by line item Job function by job function And one of the variables that was taken out is where people lived. I don't care where they live. I don't care if they're in Poland or Chicago or Logan or New Zealand, Australia We really went through and looked at job function and where it could be best performed. And then The harder decisions are where you're just looking at where we're duplicated in staff and how do we make those decisions? But that's the process that we went through Tell me one of those. certainly you had BPs of sales, for example. You had to make a choice. What was the framework for making that choice It was so different depending on each function. There wasn't one set of this is the variables you'll use to make a decision for everybody So there again, the variables were so unique depending on the job function. One hat didn't fit all One of the easier ones, although it was very difficult a personal standpoint, but Chicago is my center of excellence for the finance department And we had duplication in Logan So, you know, accounts payables, accounts receivables, those kinds of teams needed to be consolidated. and The folks in Logan Gut impacted from losing their jobs than the folks did in Chicago So that's one example of where we You know, that one was maybe a little bit easier to make a decision because the finance department's staying out there Do you want the Weber brand to rub off on the Blackstone brand or do you want them to grow independently Yeah, that's a great question and it's really part of our go to market strategy We really believe both brands serve different purposes, and that's what I want the team to focus on is what purpose does Blackstone serve and what purpose does Weber serve to the customer And what does my end users or customer expect from both of those brands to deliver Because there's some nuances, there's some differences there I'll just say this, it's been five years since we've spoken. You're playing a different character now, right? You're the CEO of a much larger company. You're obviously thinking very hard about how to manage Weber and integrate it correctly, you just have a much bigger problem to solve The last time we spoke You were on an upswing of rapid growth, particularly in the pandemic, right? The Blackstone was a viral sensation on TikTok in the pandemic. You were just trying to move as many units as you could. and you had a lot of ideas about how there would be recurring revenue for Blackstone as people bought more and more accessories for the griddle. And you said you can cook on this three meals a day and we see people making pancakes and then they're making dinner and we're going to sell the pancake ckakes and then we're going to sell the dome to melt the cheese on the cheeseburgers. And that was such a huge part of your focus then, right? You weren't just going sell one griddle, you're going sell an entire lifestyle. Now I've got this other big company which has its own lifestyle associated, its own kind of brand image its own moments in Americana And you've got this much bigger problem to solve. Is the thesis still the same that you're going to buy a black stone and then I'm going to buy one set of accessories and another set of accessories and then Alexis O'hannan is going to make dinosaur pancakes with his kids on Instagram. that's going to sell even more. L How does that work as your role has gotten so much bigger Theesis is still a lot the same Accessories are a very important part of our business and especially on a griddle because there's so many things you can do on a griddle that you need those accessories. They're a pretty important part of it And then yeah the other interesting thing is is that with The retail marketplace the way it is right now, the way it is today. It's tariffs have been heavily impacted us last year, and we're still feeling the results of that from Liberation Day And then on top of it, we had to move manufacturing facilities to Southeast Asia. That was not flawless, I should say, had plenty of headaches there just this summer with gas prices going up the way that they have That really affects our customers And so they may not be able to afford a new griddle right now for Father's Day, but they certainly can go buy two or three accessories that dads always want So the accessory business is a huge part of our business and translating that over and sharing that concept with the Weber teams and helping them understand, you know McDonald's wouldn't make it if they couldn't sell French fries. You gott to sell the fries with the hamburger So accessories are a really critical part of our total overall business for both brands The interesting thing about the griddle market, when you said that to me, you know, I as a new griddle owner five years ago And I was like, yeah, I want to buy ten spatulas and four different hamburger smashers and let's do it. And now I have all that stuff. Do you have to invent new things for me to try to do in my griddle? How does that work That's interesting. We don't try to invent new things just so you' buy something else from us. Everything we build in accessories especially and we learned this the hard way because at first we're like, o, let's do this. let's do that. And we would put those products in the market they wouldn't sell So when we put a product in the market that's a new accessory, It is coming from a lot of consumer feedback We get great ideas from YouTube and TikTok and we watch what our customers are doing and how they're modifying things and how they're making it easier and simpler all consumer driven on the accessories What's an example of that Well, the spatulas themselves, right? And so sometimes they're thick and not flexible. Those are great for hamburgers, but sometimes they're softer and more flexible. Those are great for pancakes flipping and especially if you're doing eggs, scrambled or fried eggs. You just mentioned a dome, a melting dome People were using cake pants when we first saw that on YouTube and we're like They were drilling a hole in it and putting a handle that they got from someplace so they could lift it on and off the griddle. And then Over time as products develop, especially on our accessories line, we learn from one year to the next, working with our retail customers. you had fifty accessories Here's the top ten sellers, Here's the bottom ten sellers. Let's go through item by item about what worked and what didn't work and what do we need to learn from our customers to modify, get rid of, improve on and change for next season. That's kind of the process we go through. All those accessories are made overseas. You've mentioned overseas manufacturing and tariffs and liiberation dayay now several times. It's interesting. you have competitors are public. Like Traeger is a public company They've had to just loudly say tariff policy and trade policy has hurt their business It sounds like that's the same for you. Is that something you're actually lobyingst? Is something you're just dealing with not lobbying, dealing with, and it affected the whole industry because everybody bills overseas except interestingly enough, Weber ' we have a factory just west of Chicago in a suburb called Huntley, and we still build most of our kettles for the U S. market in Huntley, Illinois And we've maintained that and it's really challenging. It's very difficult to maintain a retail price point that my customers want to pay. pay for a kettle and we upgraded the quality of that thing has a ten year warranty on it That's amazing kettle gets hot with coals and everything in that you put in there, It gets beat up and abused, but we build it at a quality level we can maintain a ten year warranty on it We also build kettles for the European market and our factory in Poland. And we wanted to expand manufacturing And then with tariffs and everything else, and a tariff gets announced and the cost of steel goes up the next day coincidentally, right? Big surprise. Demmand goes up for it. so steel markets are reacting to the demand So it just continues to kind of chase itself on profitability and where you can and can't build a product. But we work every day still trying to build in the U.S and continue to figure that puzzle out. I'd love to build more in the U.S. if I could. This is not a particular product, but If something some retails for six hundred dollars or three hundred dollars The customer votes with their credit card and they vote for three hundred because the quality is the same The theory of the terrorists is they'll bring up the prices of the overseas products to the same as the prices that you would have to charge if you made them in the United States. It doesn't sound like that's actually pushing you to manufacture more in the United States I'm trying to push more from manufacturing in the United States just to have more control of my supply chain be my biggest motive there But I have to be profitable. Tariffs have certainly started to even the playing field and make it more attractive to build in the U. S and we're actively reviewing opportunities, you know, like I say, to continue to build more product here in the U.S I don't think have too much of a chip dependency or a RAM dependency. Weber owns IGrill, which is their connected platform. I don't think Blackstone has a huge connected platform But Weber, you know, that was part of their strategy was to get smarter, to make it easier to cook Is that affected you? or do you stare down the barrel of NvidDia buying all the chips in the world and say, this is really hurting our Iye grill portfolio It hasn't impacted usis because we haven't expanded into that category deep enough to where it would impact us We did buy another technology called June Ovens, Weber did And it has some phenomenal technology for cooking. It's just really super expensive. and so we're still trying to figure that puzzle out. But as a result of that technology, we've greatly expanded our connected devices and are thermometers And then you're going to start seeing some electronics on some of our high end summit grills that are just unbelievable. And really I think the biggest application for technology and outdoor cooking is with pellet grills Because on a griddle, it takes you two minutes to cook a hamburger, right? I don't need I don't even have time to hook up and my meat's done. But if you're smoking something, you're going to take four eight, fourteen hours to cook something. The connected device is really beneficial and helpful. We have to pause here for another quick break. We'll be right back Support for this show comes from Clavio There are only so many hours in a day. and Clavio's two powerful AI agents can make sure your team spends them on big things. The first Clavio AI agent turns your marketing ideas into reality instantly Describe what you want. A holiday campaign, a VIP reengagement series, and Clavio builds it instantly email, SMS, and push All coordinated on brand, grounded in fourteen years of Clavo marketing data Nothing goes live without your se so The other Clavio AI agent keeps your customers happy at any hour Brand trained to answer questions, make product recommendations, and handle orders and returns. No hold music Marketing that launches instantly support that never sleeps Join more than one hundred ninety three thousand brands, including Aay Patrick Ta and Dollar Shave Club, already growing with Clavio the autonomous BaC CRM. Get started at KL A V IY O. com Support for this show comes from Shopify When you're starting something new, It can be really intimidating put so much time and effort into it, and you don't even know if it'll succeed But here's a thought What if it does succeed? What if your instincts were actually right all along Shopify wants to help you get there They're the commerce platform behind millions of businesses worldwide and nearly ten percent of all e commerce in the US, from established brands like Mattel and Heinz to companies just getting started Their design tools make it simple to create the exact online presence you're envisioning, with hundreds of ready to use templates available And with built in marketing tools, you can launch full email and social campaigns in just a few clicks, so you can connect with customers wherever they are It's time to turn those what ifs into which Shopify today. You could sign up for your one dollar per month trial today at shhopify d. com slash decoder You can go to Shopify d. com slash decoder That's Shopify dot com slash dec coder When I scraped my car in the parking garage, I was worried that it could be a long process to take care of Like a landscaper's first day trimming a hedge m. I have definitely already been here Now was it left, right or right left Well mayaybe I'll cut a path out and find my way back later But it wasn't like that. I filed a claim in under two minutes on the GaICo app and they handled it from there. It was taken care of almost as quickly as it happened. It feels good to get help, quick. It feels good to GaIo So we did have this CEO Krager on the show. He had been a tech executive. He owned a headphone company. He went and bought Traeger. That's actually a great conversation. I encourage people to listen to it. He also had to do a culture change. That was a family business and he pushed really hard to change the culture. Trager's obviously very successful, but he understood that modality Right? This is going to take a long time and I can put a lot of technology around it to make that consistent and easy for people Griddles are what you're describing. You can make a haburger in two minutes It's greatreat. It's done. It's very fast. You can use it over and over again throughout the day Gas grills are kind of in the middle Right? You can pretty easily screw up cooking on a gas grill. You can very easily cook up screw up cooking on a charcoal grill. That's just like a thing people do all the time. Even just lighting the thing is challenging Do you want to bring technology to bear on those experiences Yeah, and we are. and I think one of the greatest technologies to help you with gas grill cooking is having a really good thermometer, instant read thermometer And we have those now that connect to the app that we have on Weber. It's a phenomenal app. You can use it to on pellet grills, which we also make under that brand, but we're going to have connected devices that will connect into the app and help you with the meat temperature It's funny you mentioned that because I haven't cooked on a gas grill for. twenty thirty years, right? I wasn't gonna ask you about this. were all you were off it the last time we talked. You werere like, I don't even need this thing anymore. That's funny. Th are some words I had to eat. I said many times, we will never sell a gas grill. Now I'm deleting seller of Gas Gll, so But it was funny. So in the Chicago area There are door restaurants with the Weber banner on it Inside those restaurants, they actually have a section where they have all the gas grills set up and you can take a cooking class there And so we went there and ate dinner and then we went back into the area and we got trained and I was told how to cook a steak on a gas grill and I loved it ammazing. It was really delicious But I didn't know how to use it. So Gaining a little bit of knowledge, we're going to be putting more content out on how to use a charcoal grill, how to start it, how to deal with the coals, how to move them around, how to create a hotzone and a indirect ind direct zone, all those different kind of things that people need to learn and may or may not know. So we're going to have all of that set up You know how Blackstone we've been huge on social media. It's still a big part of our philosophy we're driving more of that same type philosophy on the Weber brand as well to help our customers. Bea when you fire up a really good ribeye on a Genesis or a spirit or a summit gasrill and you know how to cook it right, ty darned good steak. I have to admit There's a lot of people in the Black Zone subreddit who are going to say that actually it's much better on Gle Well, I know. But believe I I love it and it's hard not to be biased Actually, do you find right now with the energy crisis and the price of fuels that more customers are buying charcoal grills? Well, they're buying charcoal gridlls because of the retail price point. They're not trading from a thirty six inch griddle to a twenty eight inch griddle because of money. They're going all the way down to a charcoal grrill. So yeah, we're seeing some big trade down right now. But you don't think that there's just the ongoing cost of propane is driving that change? No. Well, it's part of it. Fuel iss definitely part of it. I mean, I had some reports that I was studying the other day Bottom If you're listening to this, Rogers is literally looking at the reports on his desk right now the bottom almost, let's see fififty percent of our consumers are spending teencent to twenty percent on on the on power. That includes electricity at home, gasoline, propane. And those customers are squeezed, you know, if they're spending fifty percent of their income on housing twenty, twenty five percent on powerower They have no money left. It's really difficult economy for them right now. So yeah, they're trading down to charcoal grills because of price point And do you think that that represents a growth opportunity? Is that just an opportunity to provide outdoor cooking equipment to everyday Americans? How do you view that statistic Before I learned this, I mean, we saw that, we saw that as a trend developing this share You mentioned our kettle earlier and you mentioned that it's part of our logo. It is. It's actually a trademarked logo with the shape of our kettle in there. It's iconic to the Weber brand I want to see what we can do to get sharper price points on the kettle Beacause they've crept up over time. They can retail for two hundred dollars. And you know traditionally that was a hundred dollar hundred retail item and now it's all the way up to one hundred fifty, two hundred dollars So what can we do innovatively to help the customer have a better experience at a better price point is really kind of what I'm focused on. Can you do that with American manufacturing? It feels like you want to push the price points down, you're headed overseas and then the tarriffists are going to keep you from hitting those price points. Yeah I think we can. I think there's some innovation that we can put into some of these as simple as they are. there' a sheet of steel that's molded half dome on each side and put some legs in You know, it's a pretty simple product, but there's innovation left in there that we can come up with. And I think we can help the retail price points You've mentioned the longevity of the kettle several times, tenen your warranty The CO of Big Green Egg was on the show a couple years ago and he said specifically about the kettle, they cost two hundred bullars and buy the grocy store within two or three years you're buying one because they fallpart U You lost them you were on the show. You were like, it's outdoor cooking equipment Two, three, five years. It's time to buy a new one. You're talking about very price sensitive customers now, even maybe at the high end, peopleople are very sensitive to the prices are going. People do want things to last longer. How do you think about that? I mean, the stuff is outside, It is going to wear at a different rate Can you make these products to last for more than three years? Can you actually guarantee that the ten years across the product line or is it The kettle No, the weber gas grills have some of them have a fifteen year warranty The biggest difference there is rust And weber grills traditionally have been made, we would call it the burn box, the part that holds the burners That's cast aluminum. That doesn't rust and that lasts forever And our hoods on weber grills are also cast aluminum on the sides with an enamel coated paint on the top, which doesn't chip as easy.ay it lasts a lot longer So the Weber gas grill is more expensive than a lot of the cheap imports but the quality difference. You go pick up one of my gas grills compared to a you know, one for three hundred dollars and you can immediately feel the difference as a consumer. Do you think you're hedged against trends? Like do you ever worry that smmash burgers are just gonna go out of fashion and maybe big Big gas grill burgers are gonna come back around and You'll have Weber instead I don't really worry about it because people are always going to eat and we cook great devices to cook your food on. and we will innovate to Lifestyle changes Demographical changes, economic changes That's what I have to do. I can't control those things. I just have to merchandise around those things and react to them. I don't like to react. We like to be a little bit more proactive than that. So to we try to spot trends. to where we have time to react to that and make sure that we're spot on with with what the customer wants to pay and buy. I'm asking that because again, five years ago we talked The Blackstone Giddle was a TikTok sensation. partarticularly smmashburgers were a TikTok sensation. And maybe the entire country learned how to make a smashburger in that summer And You learned a lot in that process. And I remember talking to you back then and you had been spending almost all of your money in television advertising And you weren't even doing it to drive sales, if I remember correctly. You were just trying to get people to the website and then Take them from there There wasn't like an eight hundred number. You were literally just trying to create brand awareness on television You're talking a lot now about informational content for Weber kettles and teaching how people how to use charcoal and how to use gas grills Is your marketing effort focused more on social media now are you still so heavy on TV The spend that we have has definitely changed since we first met where we were one hundred percent spndn on traditional television advertising top of my head, it's probably closer to fifty fifty spepend now on social media, advertising and promotion versus just traditional TV. but I'm still on TV. And we're now taking the Weber brand and putting them back on traditional TV advertising, driving the brand awareness. I still don't have an eight hundred number on the Blackstone brand. you know just go to bllackstone. com and most people go to their favorite retailer purchased a brand there. here's something that you'll find really interesting on Blackstone. We have a really high propensity of people who actually make the full purchase online, not necessarily my website Because my corporate website is still a small percentage of my overall volume and business But the people who now trust and know the brand buy it online and most of them have it picked up at the retailer of their choice. and a lot of them are having it delivered now as well. They're not going into the store anymore. They know the product, they know the brand, they know what they want. they go online, they do their research and they make a purchase and it gets shipped to their house or they go to the store at ten o'clock at night and pick it up So but it's really interesting if I truly analyzed Brick and mortar versus D to C. If I count all of my retailers D to C, it's definite that has shifted now to more people buying online. than five years ago in a big way I think that's really interesting because, you know, the last time we spoke, it was really the beginning of brand marketing through creators and these integrations. You had on staff influencers back then who were doing tours at Walmarts I don't think you were seeding product at scale, but you were beginning to dabble in it. You had a Roku app that you had made cooking content in it? Those were early. You were early to a lot of these trends. L theseese are big trends now at massive scale. You see ad agencies spending hundreds of millions of dollars in the creator economy in this way Mark Barok as, the CEO of Shark Ninja was like, We have ten thousand creaters that we work with on brand deals and we evaluate the sentiment analysis of their comments Have you gotten all the way that far in creator marketing Do you still have on staff influencers? How are you thinking about this? Yeah, I will never get that far because I don't believe in it I think when you buy and pay for influencers, the consumer picks it out in seconds. The consumer is so savvy and so smart So our content creation, we still have influencers. We've expanded it. We have what we call the Giddle crew And these are creators and content creators that we've seen online. We've followed them for a long time. They're authentic If somebody calls me up and says, hey, I have five million followers pay me three million dollars a year and I'll pitch your brand, we respectfully decline and hang up as fast as we can, quite frankly. We don't do it that way. And I don't see a lot of people doing it that way and I tell people all the time that's the best way to do it, but no one believes me. noobody they think they have to go by their content creators. And typically what happens is what you mentioned earlier in the call where Coincidentally, some of the Blackstone influencers got quote unquote swiped by Weber That happens all the time to us because we have these people who cooking on a blackstone, they start getting a great following because people want to follow the brand. They think it's fam And my competitors think it's SAam. And then they go buy them and have them come and hawk their products. And to me, it's fake. It's not authentic and I don't like it. so I'll never do that. Have you talked to some of those inluencers? Some of them truly had hurt feelings that you hadn't competed for their attention or their brand integrations? because that's their money You know, the platforms don't pay the influencers any money really. It's all brand deals, it's all sponsorships So it has created a different dynamic on that side of the house for sureort We have conversations with a lot of them and some of them Some of them came to us and they negotiated and they ike I won't pay that money. And they can be heard all they want, quite frankly. But I do that for the brand and for the product itself, not to hurt anybody's feelings or be offensive or anything to influenceencers because I wish them all the best and some of them do really well and do a great job I think it's great. It's a great business model for an independent person. I just have to protect my brand and the integrity and the authenticity of my brand. That's what I focus on How do you think about finding that next new customer? And maybe it's different, you know, Blackstone has become a household name. Webber is certainly a household name It's the first thing people think of that The logo is iconic But this is the challenge for everyone now, is finding that next new customer to when we're all just sort of a wasash in feeds full of slop Everything is brand marketing through influencers Maybe we're not even watching TV as we used to as much anymore. How do you find that next new person? Are you just paying do you see a world where you just have to pay meta for meta ads Do see a world where the content travels organically? This feels like the biggest problem for everyone And then your sales cycle is long and the products are expensive and heavy, as you keep pointing out Wh does the next new customer come from Yeah, it's crazy for us, the next new customer still comes at a very high percentage by word of mouth. And all this money we spend on marketing and advertising and influencing and everything else, when we do surveys annually, which I've done now for about seven years, still the number one way people hear about our brand on the Blackstone side haven't got caught up yet on Weever Blackstone site it's still by word of mouth So somebody cooks on the weekend, they invite the neighborhood over, he's flipping pancakes in the morning or they're doing smash burgers or whatever they're doing people Now the difference is they've heard of Blackstone. they've definitely seen one, but now they're experiencing it and it's still a big influence on them making that purchase So We'll continue to try to drive that in different ways and creative ways. And it changes weekly, monthly, daily almost. that strategy. So the marketing team spends hours analyzing results and what worked and what didn't work and How can we improve? and where should we spend money? Wh should we shouldn't spend money? That is just an ongoing process on a daily basis. But you're saying the biggest share is still word of math. Yeah, isn't that crazy It is crazy. I mean I would say, you know people have seen me use mine, I've watched my friends use theirs, and the number one thing they talk about is, boy, that seems hard to maintain on the griddle side anyway Right You got to care for it. you got to scrape it. If you leave it over the winter, you got to clean the rust off of it feels like a technology problem that you have not yet overcome Right? Like the thing will just get rusty. and maybe like I love going on the Reddit and every and just like cook another pack of bacon and it'll be fine. Like there's some aspect of like this thing is harder to use than a regular gas grirdle that you can just where deteriorate until you buy any one. Do you think about that Is that part of your marketing It's not just part of our marketing, it's part of our product development. Interestingly enough, when Weber got into the griddle business As a competitor, I was at least impressed by the fact they tried to improve on something that was a consumer Complaint, rust And so they came out with a slate, which is just basically a pre season griddle at the factory. And they came out with a new process on how to do that. It drives the cost higher. It's more expensive to do But at least they went after a concern from the consumer. and they just didn't knock me off and say, here's ours, It's whereever. they came out with a feature on it So That makes the industry better. That's great. And as a result, you, we focus on that a lot because of our customer while it may be It definitely is a concern and customers identify that. But on the total number of units we sell And the complaints we get about rusting gets a really, really small percentage And we have so many cleaning kits and restoration kits and Hundreds and hundreds of thousands of YouTube TikTok videos on how to deal with it and how to fix it and And in thirty minutes, you can clean up your grretle. It's really not that hard No I'm just curious about that because that is the competitive dynamic, right of having the Weber in the ecosystem at the higher price point. That might be the competitive dynamic that has been removed, right Because you now operate Weber Do you have other griddle competitors that you wake up and think about every day? There's always a griddle competitor. They pop up on Amazon overnight. But yeah, there's plenty of competition. That's the other piece of this that I want to talk about. We've talked a lot about manufacturing, and you've had to deal with tariffs, You've obviously moved your manufacturing around the world. That dynamic still exists. Right? There's any hot product in the world. You've got Chinese manufacturing partners can't totally control them. That ecosystem knocks off products at completely high rates, especially if there's any innovation that differentiates a product. That stuff is still flooding into our markets, tariffs or not It's still showing up on the internet, one click away, Dupe culture is as high as it's ever been. Is that a worry for you, the way that it's a worry for, I don't know, the headphone manufacturers that I talk to or any of the fashion retailers we've talked to? It's definitely a worry. My big advantage is is we have two unbelievably strong brands You can knock me off but it's not a blackstone or it's not a wever So that's it big advantage that we have, in my opinion, the key to that, I can't just rest on my laurels and say, Ill have the coolest brand. Wh cares What I have to continue to do is innovate my product and stay one, two, three steps ahead of my competition Because they're knocking off, in my opinion two to three year old technology. It's how long it takes them. It They can't knock me off overnight. This is a long lead time production product And by the time you want to knock me off and you find a source to have it built and you pay for tooling, which is not cheap big capital expense And then you start buying inventory in minimum quantities from they're not going to build you ten You know, you got to buy hundreds or thousands of units to get going and then your cost isn't going to be as good as mine. You don't have the economies economies of scales that I do So we have a big competitive advantage over knockoffs, if you will, and I'm talking non branded importers, but believe me, they're very innovative. They're very creative. theirir speed to market sometimes astounds me. I have a bigger problem on my accessories with that than I do on the grilles and griddles. Yeah for sure. you go on Amazon, and the accessory kits are everywhere. They're everywhere. Do you fight with Amazon about that? Do you ever complain Off the record Yeah, it's definitely a concern And mean, that's the recurring revenue, right? This is the thing we've discussed now for a while. And it's our brand and they and that those people, whoever they are They don't care about intellectual property. they don't respect it. They're just trying to sell as many units, whatever that is against me, my brands, against other companies, they don't care. They just knock stuff off and sell it for as long and as fast as they can and they get shut down and then they move on to the next. product Amazon's a unique case, right? There're also a big advertising platform A lot of the answers is we'll just pay for the ads and we'll put your results at the top That's the new way Amazon makes money. Is that a game you want to play? You've been resistant to playing some of these online retailer games, the influencer games, that's the game on the Amazon platform It is definitely difficult on the Amazon platform. The other challenging thing with Amazon is just their algorithm in particular because if B back ordered or if they sell more than they thought, And then they don't have inventory, then the algorithm thinks no one wants to buy it because they're out of stock So that's probably the biggest challenge with Amazon and it really