An outdoor cooking company with an influencer staff and a Roku app
If your TikTok algorithm is anything like mine, you know that Weber and Traeger are not necessarily the hottest thing in cooking outside. In fact, grilling is out, and griddling is in. That’s griddling, as in on a griddle — a large flat sheet of metal like you would see in a diner or a hibachi restaurant. And the company behind the griddle revolution is called Blackstone Products and they make the Blackstone griddle.
I first came across Blackstone on TikTok last year, just as the pandemic lockdowns were starting. And there was this caption I kept seeing on posts showing people smashing burgers and making pancakes outside: “I finally got a Blackstone.” Twenty minutes ago I hadn’t even heard about this thing, and now I was late to a trend? So I bought one. And we haven’t used our regular grill in over a year.
So of course, I wanted to know: where did the Blackstone come from? What’s it like to have a product go viral on TikTok in the middle of a pandemic — especially when that product is made of steel and weighs like 120 pounds?
It turns out the Blackstone story is deeply connected to almost all the themes that come up on Decoder every week. The CEO of Blackstone Products is named Roger Dahle, and he’s a longtime entrepreneur based in Logan, Utah. He’s the inventor; his name is on the patents. Just like any other startup, we talked about Blackstone’s ability to generate recurring revenue, and how the griddle itself is a platform for a variety of additional products and services, some of which might be made by competitors. And Blackstone has big competitors in Weber and Cuisinart — so we talked about competition, and branding, and going up against the biggest players in a space, and the creator economy. You know: Decoder stuff.
I thought we were going to do a fun, silly summer episode about grilling, and Roger and I ended up going deep on some of the wonkiest things that come up on this show week after week. I keep saying that every company is a tech company, and this conversation just proved it over and over again.
The following transcript has been lightly edited for clarity.
Roger Dahle, you are the CEO of Blackstone Products. Welcome to Decoder.
It’s nice to have you here. Blackstone is a product that has gone viral on YouTube and TikTok. Your company is pretty young, so people might not have heard of it. Give people a sense of what Blackstone Products is and what the Blackstone griddle is.
Sure. Well, we refer to ourselves as an outdoor cooking appliance company. We specialize in making only griddles, which is a flat top grill; some people call them flat tops. And we market and sell our products through US-based retailers: Walmart, Lowe’s, Home Depot, Dick’s Sporting Goods. We have a wide variety of customers that we sell to. We sell a little bit direct to the consumer on our own website, and direct to the consumer through the other retailers’ websites and Amazon.
I was doing some research on Blackstone before you came on and I found some of your patents. You’re listed as the inventor of a lot of different elements of the Blackstone griddle. Tell me how that went. Were you in the garage hammering out griddle tops when a light bulb went off? Give me a sense of start to finish here.
I really got inspired with the idea years ago, even as a young boy. The first time I saw a flat top griddle being used was with my dad. Every year he would take me to the local Lions Club Fourth of July breakfast that they cooked on homemade, I guess you could call ‘em, griddles. These were big pieces of steel that guys figured out how to put fire underneath it, and heat it up, and cook breakfast on. I always thought that was neat.
And then as I got older, in my local community I noticed that for large family gatherings, for Boy Scout events, for family parties; people who wanted to cook breakfast, somehow, they were getting these big griddles. And they weren’t commercial ones coming out of restaurants, they were mainly homemade or just made at some welding shop.
Later in life, as I got into my career and started doing what I’m doing, I, again, was intrigued by griddles, but you couldn’t go to a store anywhere and buy ‘em. And so in the back of my mind I always had this idea, somebody needs to make a griddle that you can go buy at the store so you can cook breakfast on it, and that’s really what got me started with it.
Did you make the first prototype at home or did you hire a designer? How did that process come about?
Well, the first one that I made was on a yellow notepad with a ruler and my pencil. And I kind of sketched it out and got it as big as I wanted it to be. Thirty-six inches seemed to be a really nice size, by 20 inches deep. And at the time I had started my own business in marketing products to retailers, and we were always trying to come up with new ideas. I’m a habitual entrepreneur, if you will.
I had this griddle in the back of my mind, so I drew it up on a piece of paper. At the time I had a guy working for me who traveled to China and did our sourcing for us on other product lines. I said, “Go over there and find me a factory that could build this thing for me.” Explained what I want.
And it took about a year of sourcing a good factory, and finding the right one, and prototypes going back and forth. And at the time I didn’t have any inside engineering, so I was relying on my factories in China to get that done, and a year later we finally had the first griddle.
What year was that?
That is probably going back to about 2003, 2005, along those lines. It’s been a while.
And when did your first one go on sale?
The first ones that we sold were to a local retailer in Salt Lake City in Utah called Sportsman’s Warehouse. At the time they had about 75 stores. And they’re kind of a hunting, camping, outdoor-type company. It seemed that it would fit for them, ‘cause it’s somewhat portable and a little bit easier to move around than a traditional gas grill. So we figured people could take it to camp, or Boy Scouts, or things like that. And they were the first customer to buy it and that was probably 2006.
I don’t know if you watch as many music documentaries as I do, but I watch a lot of ‘em. And there’s a part of the story that is always missed — and we’re right there with you right now — where a band is, like, “We formed a band, and then we wrote a song, and then we went on tour, and then we were the biggest band in the world.” And that act two is always missing, so I want to explore that with you a little bit.
So you make your first product, you’re selling it locally in 2005, 2006. Now it’s 2021 and you have a massive product line, you have different products in all kinds of different stores. You’re viral on TikTok, which is hilarious to me.
What happened in the middle there? Was it just a slow build? Was it “the product went viral on TikTok” during the pandemic and it exploded? Give me a sense of that run.
At the time, when I was running other businesses that I was involved with — and I like to call that time frame an incubation period for Blackstone — I knew it was a great product. There was no question in my mind, this is an item that needs to be at retail.
The other thing that was unique for me is it was the first chance I had to really create a brand, because all the products I was doing at that time were private-label, or celebrity-endorsed, or somebody else’s brand and we were just selling ‘em to retailers, because I had a lot of strength in that area, and good relationships.
But Blackstone was always there. And it took a while for it to really catch on, right? Because people who cook food outside traditionally think that your steak has to have sear lines on it for it to taste good, so we had to fight that perception. Number two, no one had ever heard of Blackstone, and a lot of people still haven’t heard of Blackstone. So building our brand was important. We were cooking a different way, that was different, and that took time for the customer to perceive that. Even though everybody walks up to a griddle and goes, “Oh, that’s cool, I’ve never seen that before, where can I get one?”
So, a lot of those things were happening as we just incubated along. The other thing that was really challenging is, who was gonna sell this product, where did it fit? I would show up at retailers where I thought it would make a lot of sense, like some of the hardware channels. And they’d look at it and they’d say, “Uh, that looks too much like a sporting goods product and we don’t have sporting goods in our chain, so we can’t sell that. It’s not a traditional gas grill.”
So I would go to sporting goods retailers and they’d say, “That’s too big for us, it won’t fit on the shelf. You need to go show that to lawn and garden buyers.” Then I’d go to lawn and garden buyers and they’d say, “Yeah, that looks like sporting goods.” So it was kind of like a kid getting tossed back and forth between mom and dad and no one giving them an answer.
So that’s really what happened in the middle there, and it really took time to get it out in front of the consumer, and make them aware, number one, of this style of cooking, and number two, of our brand. And it wasn’t really the pandemic that did that, or TikTok, it was really that we started doing TV advertising. I’d spent some time in the infomercial world and had a few of those stripes on my back from learning hard lessons.
And so I brought in some people who knew a lot about TV advertising and marketing, and I said, “I’m gonna spend money on TV. I don’t care if I lose money, I want to advertise my brand, and I want to advertise our style of cooking.” And to this day we don’t even have an 800 number to call and order. It’s just informational; it drives people to our website, which drives them to Amazon, to Walmart.com, HomeDepot.com. And they gather more information, and then they figure out where to go to make a purchasing decision.
Really in 2015 is where I look to as where we started to resonate with the end-user customer and they really started to learn about Blackstone. There was a good seven to eight years in there where I was incubating the product, keeping it alive, but the revenue that it generated during that time frame was not enough as a standalone company, not even close.
But when I finally got the product launched with enough retailers that it made sense, I divested myself of all my other business interests, and focused 100 percent on Blackstone, and that was 2015.
One of the reasons I wanted to have you on the show was to talk about your social media strategy. What you’ve described is a pretty traditional product distribution strategy. You made something good. You worked at it for several years. You put it into traditional retailers.
You’re trying to innovate and stay ahead of competitors. It’s a huge product. And then that is married to a very innovative social media approach, social marketing approach. You hired a YouTuber to come be Blackstone’s own YouTuber and run your own channel. How much social media marketing do you do?
We do a lot. We post videos and recipes every day.
Is that your team? Do you have videographers and photographers and all those folks on staff? So you run a YouTube channel.
We do. And we have a culinary-trained chef on staff. He lives in Florida, but he also has a unique set of skills in that he is a phenomenal behind-the-camera guy with editing and everything else that goes along with that. So he helps in a lot of ways besides being a chef and cooking for us every day. He does a phenomenal job behind the scenes.
We have another influencer that’s on staff, a full-time employee of the company, and he travels around and does road shows at different retailers. He does the Griddle More Tour with Walmart. We have a wide variety of people that have come to us naturally by being engaged with the brand on their own online. And then we watch those sites and then contacted those people at a point in time, and they became part of the team.
So you’re watching the influencer economy, seeing who’s popping up making content with your griddle, and then at some point, you say, “You should just come work here and do this for us.”
Yeah, that’s part of it. That’s definitely happened in the past.
What was the trigger for you to say, “Actually, you should just come do this in-house”?
Kind of the combination of developing a relationship with these individuals and them taking the initiative on their own to do these things, and just over time, the relationships developed, and it turned into what it is today.
Do you seed products to other influencers? Do you buy branded content from other YouTube creators? Because there’s a whole other side of how social marketing works. Are you involved in that stuff?
Just a little bit. Not much.
One of the things we cover a lot is the “creator economy.” And we often cover the creator’s side of it, where they’re taking the money in. You represent the money going out. You’re gonna spend money on creators and influencers in order to see a return in the form of higher sales. So do you think about all the other products that the influencer economy can offer you, like product integrations, branded content, all that stuff?
We think about everything, right? We consider all options and all opportunities as they present themselves to us, but you know, we’re just pretty simple. We’re just driving a brand, and we’re watching our social media every single day. We’re using the influence that we can.
When we spend money, it’s for advertising. It’s not necessarily for creating huge numbers of followers, if that makes sense. We don’t spend money doing that. We spend money advertising our brand and what you can cook on a Blackstone, and how fun it is. And everything else drives behind that just naturally.
How much are you invested into platforms? You said you have a videographer, you have a chef, you have photographers. Do you think of that as your YouTube team? Do you think of that as your TikTok team, or are they responsible for all the platforms?
For all of the platforms.
Where do you see your best return?
You know, it kinda changes over time. They’ve all done well. TikTok has just exploded, you know, over the last 12 months. It’s just gone nuts. But as far as driving revenue back to the company, probably Facebook right now.
And that’s Facebook targeted ads, is that Facebook content, Instagram? What is that?
You’re buying a lot of targeted ads on Facebook and presumably on Instagram, but you’re also making content. And you think all that has an equivalent return for you?
It does. Up until really the last year and a half, we hardly spent any money on social media. All of it was aimed and spent on TV marketing. And our TV marketing was X, but we always spent X-minus, because we’d run out of inventory. I don’t want to advertise on TV when I can’t supply it, and just make customers mad.
So we pulled back on TV advertising every year for the last three and a half, four years. And we’ve made a directional change in that we’re starting to split that budget up; less on TV, more on social media. And like I said earlier, over time, I see that the majority of our spend will probably be on social media. But I’ll still do TV, traditional advertising.
The other thing that we’ve done is kinda gone to the streaming services, the OTT stuff, and we’re creating our own content there to put on those channels. We have a relationship with a guy named Bruce Mitchell. He’s the “Alligator Man.” He was on Discovery and he was one of those swamp people that would go and catch alligators.
Bruce contacted us, and we just love Bruce Mitchell. He’s just awesome. And we’ve created now, I think we’ve got two or three shows done that we’re streaming on Amazon Fire Stick and Roku. It’s just him going out and doing his thing and cooking food, and being Bruce. And Blackstone is, again, subtly advertised in the background as the product that he cooks the frogs that he catches and puts them on the Blackstone, or the crawfish, or the alligator. And it’s him. He’s just real life, living in the swamps in Louisiana, and it’s awesome. We love that kind of content, because he’s a real guy.
So walk me through that deal. Are you paying to produce that show, or are you just paying an integration fee?
We pay, ourselves. We’re producing the show with our in-house people.
Okay, so you’re producing the show. And then do you have to go and get Amazon Prime distribution, or did you just make an app for these platforms?
Just make an app for the platforms.
So one of the things that’s really interesting about that is, you know, all these platforms want a cut if you do advertising in those apps. So again, in the larger tech context, NBC Peacock and Roku fought for a while about the terms of advertising delivery on the Roku platform.
Are you having those conversations with Roku, or are you just saying, “This is our app. It’s got our product integrated with it. It’s not traditional advertising. You can’t even take a cut of this.”
That hasn’t come up yet. So I guess that’s what we’re doing.
That’s just fascinating, right? I mean, again, the reason I wanted to have you on the show was, here’s a company that sells a huge physical product, but they play in all the digital spaces that we usually talk about, and they run into some of the same problems. And then clearly in the case of a Roku app, you’re just doing it, and that’s a different kind of advertising. And it hasn’t caused any of the problems we usually see. And I think that push and pull is fascinating to me, because I think it’s coming for every company.
I agree with that. It is definitely coming, but there, again, what’s our motive for doing that? Obviously, we want people to be more exposed to the brand and to the product, and what a great way to do it. Bruce definitely has a following of millions of people who watch his show and who follow him and watch him and everything that he does. And it’s authentic. This is not staged. This is not fake. This is just him out doing his thing. And if we can stay true to our brand in that fashion, we’re gonna be successful.
Did you pay a third-party company to make that app?
No. We just did it.
You just figured out how to code a Roku app, and you’re off to the races?
This is fascinating to me. Who maintains it? Who does software updates for that app?
We do, in-house.
You’ve got an app that requires software development, you’re producing a TV show that runs on that. You’ve got Facebook, which is where you’re seeing your best return. You’ve got a team of people making YouTube videos. You’ve got TikTok, where it seems like there’s a lot of awareness, maybe not a lot of return. How do you balance that set of investments?
This is not a sophisticated answer, and you may cringe at my answer, but it’s just really kind of a gut feeling, in all honesty. We know that if we go out and do the right thing, the customer’s gonna look at it and say, “Oh, that wasn’t staged. They’re not doing this to try to get back in my pocketbook,” and that kind of breaks all the rules for advertising and social media spend, right? You’re trying to look at ROI, you know, “We spent $50, we better generate $150 in sales,” and all of these kinds of numbers.
I’ve just kind of thrown that all out the window. I’m gonna spend this much money on my marketing, and we gotta figure out the best way to get our message out to our customers. That’s how we do it. We have a certain amount of money to invest in our marketing efforts, and we’re gonna go spend that money.
Tell me specifically about TikTok. You said it’s gone crazy in the last year and a half. I think that’s certainly where I first came across the product. It is a viral sensation on TikTok. Is that generating a lot of return for you?
Yeah, it’s kind of hard to figure that out. Because here’s an interesting thing: every year we do a market survey with end users of our product and people who have never heard of us before. And we ask a lot of questions and we get that research back, we get our net promoter score that way, so on and so forth. What we found last year was truly fascinating. With all the money I’ve spent on television and all the money we’ve spent on social media, guess which is the number one way people are hearing about Blackstone?
Is it still Facebook?
Word of mouth.
Word of mouth?
Word of mouth. And so I gotta believe that TikTok, with almost 180,000 followers now, that’s word of mouth, right? So that’s the number one way people are hearing about our product. It really quite honestly surprised us as well. But, if that’s the case, I’ll continue to spend money on these platforms, because people are talking about us, they’re watching us, they’re watching people cook food. They want to try that recipe, they’re intrigued by it.
And then the other thing that happens all the time, somebody buys a Blackstone, like you; you have some friends and neighbors over, you cook food for them, and they’re like, “Oh my gosh, that was the coolest, what is that thing? Where’d you get that?” There again is our word of mouth that’s kicking in for us in a huge way.
So it’s my total budget spend for marketing that I think really drives all of these things. And so my return on my investment is my total sales for the company, is really the way I look at it.
Do you take product feedback from social media, from comments, from user groups? Is that integrated into the way that you think?
Every day, absolutely. I mean, we see product development on social media. Our customers get to what they need for a Blackstone sometimes before we do. We’re catching up, because I’ve hired a lot of people into product development and we’re catching up and getting ahead. But there’s a lot of creative people in this country, and they’ll buy a product and tweak it and make it better and come up with a cool idea. It’s awesome, and so yeah, we watch social media a lot for that.
What’s an idea that you’ve taken from the user community that you’ve integrated with the product?
Basting domes was one that comes right to mind. A lot of people would go out and buy a cheap aluminum cake pan, if you will, and use it as a basting dome. We knew that we needed that product, but the users got to it first. Different spatulas, some of ‘em have quite a bit of flexibility in them, some of them are quite stiff. Chefs use those for different reasons, it’s very disciplined. One of the things that the users came out with was a hard cover. When you’re done cooking on a griddle, you don’t want to leave it exposed to the elements, and we sell soft covers, you know, that cover the griddles. But rain can eventually leak through and moisture can get through, so our users started just bending sheet metal and making a lid to go on top of the griddle after use. We referred to them as a hard cover. That was another one that really came from our users that we watched on social media.
How does that dynamic work? Is it formalized or does someone Slack you as CEO and say, “Look at this YouTube video, we’ve got to get in on this”?
A little bit. What’s interesting is that the employees here are great researchers for us. It doesn’t matter if they’re in accounting or if they’re in customer service. But our warehouse staff, our accounting staff, obviously our product development staff, our sales teams, everybody gathers information, we’re all really, really passionate about our brand and about our product line. And so we always have 200 people looking online at our competitors, the industry, cooking, what’s cool, what’s motivating us. We all look at it all the time.
One of the big trends in the industry right now is consolidation across every category I can think of. Have the Webers and Traegers of the world come to you and said, “Hey, we want to acquire Blackstone and give you a lot of money and let you grow as fast as you can”?
We definitely have been noticed by the investment community. Venture capitalists call quite frequently, lots of different groups have called quite frequently.
I can think of one VC who tweets about his Blackstone like three times a week.
Yeah, I might know him, he’s probably called me. We’ve definitely had conversations with folks in the past, but as far as what’s in our future, I know what motivates me and I know that I’m gonna stick around and keep doing this for a number of years. I have no desire to retire or take a pile of cash and sit on a beach some place. That’s about the most boring thing I could think of.
Do you have investors right now?
So you’re entirely bootstrapped, you’re putting cash into it until you grew into a sustainable company, that’s all, that’s all money that was coming from your other ventures or from you?
From me. And I do have a partner. My manufacturer in China is actually my partner. They’re Taiwanese, and so we have a great partnership that’s worked really, really well, and they’ve helped a lot with the financing of the growth.
So along the same lines, I can’t help but notice Weber, which is privately held right now, filed for an IPO. And last week Traeger filed for an IPO. Are you headed in that direction? Do you want to run a public company?
I don’t know the answer to that question right now. We’ve definitely had conversations about that as a possibility. It exists as a possibility, is probably how I’d state that as of today.
But you don’t have investors, so do you feel any pressure to do that, or is that, “Here’s how I’d go raise more capital to build out whatever product line”?
No, I don’t have any pressure in that direction. My Taiwanese partners, it’s a father-and-son team, and dad is about 75 years old. He is ready to retire. And his son, who I work with on a daily basis, is in his early 40s and he has no desire to retire and wants to keep going with me. But dad wants to retire, and so there’s conversations about, how do we let dad take his chips off the table and let him retire financially? So we’re having those conversations right now. There’s a lot of options on how we can accomplish that and we’re exploring those options as we speak.
One of the more direct ways for any company to grow is to expand markets. Are you in all the markets you want to be, or do you want to go fully international?
Oh no, we’ll definitely go international. I just don’t have the bandwidth right now to get us there. We have customers call us all the time from foreign countries. We are expanding right now into the Middle East, which is interesting. But they have a lot of similarities with big family groups and family gatherings and cooking as an event.
Across the border into Mexico, we have a lot of demand for our product there because, again, a Blackstone fits an ethnic style of food. It’s really one of the cool things about our product, is we are so diverse in our demographic. We are doing okay in Canada, but we need to expand there. In fact, we just hired an international sales manager, the first one in the company, this week. So within a year, within two years, within five years, I expect us to have a pretty nice presence worldwide.
You started your marketing push in TV infomercials. But I hear some of the key words you’re using, direct-to-consumer, social influencers. A lot of the CEOs I talk to on the show, that’s their whole business. They’re direct-to-consumer, they don’t want the Amazon relationship, they don’t want a Walmart relationship. They certainly don’t want to do TV advertising, they’re all doing content marketing. You’re doing both. Why both?
Why deal with the big retailers when you have, now, a product that is doing well on word of mouth? You have a big social operation, why pay the fees to all the retailers out there, or why do the traditional kinds of deals?
Right now our industry and our category is still mainly sold at brick-and-mortar retail, outdoor cooking. And I suspect maybe over time that trend will flip, like a lot of other trends have flipped. But right now a high majority of our product, and that’s true for me, that’s true for Weber, for all outdoor cooking products, is sold at brick-and-mortar retail.
There are a few companies out there who only have a direct-to-consumer model, but they’re smaller businesses in this category. So, we’re going to continue to support our retailers and drive our customers to their locations to pick the product up and buy it. Our boxes are big and heavy, they’re difficult to ship. Some of the items are difficult to assemble, and a lot of retailers offer those services — delivery, setup, and take all the packaging away — so that’s a big advantage for them.
But we are definitely seeing, and I think this part was helped by the pandemic, where the direct-to-consumer business is picking up in our industry.
Do you have the same conflicted relationship with Amazon that we hear from so many small companies? That your product starts to sell well on Amazon and 20 minutes later there’s an Amazon Basics griddle that’s outranking you in search at every opportunity?
It’s definitely challenging. Amazon is definitely challenging, but again, it’s a relationship that I really like and it’s one that I need to develop further so that we avoid some of those issues and some of those challenges. The hardest thing for me about Amazon is that everybody can sell anything they want on Amazon. Where, as a brick-and-mortar retailer, once you’ve gained selection with your product line, they add and take away on an annualized basis. But with Amazon a competitor can pop up 24/7 and they do.
So to me that’s probably the biggest challenge with Amazon, is just dealing with all the little knock-off guys that just flourish on Amazon. And they watch us like a hawk and they watch other consumer products. And they’re very creative and they come up fast and a lot of them violate our patents.
And we have a hard time even running some of these small companies down because they just don’t exist some place. So that’s definitely a challenge with Amazon. But it’s, you know, every retailer has its challenge and you just have to deal with it and figure it out.
Do you think Amazon is responsive enough to you around the, “Here’s stuff that’s a direct knock-off of our patented products”?
They’re helpful. I’d like them to be a little more aggressive, but I’d like everybody to be a little bit more aggressive. I’m pretty passionate about my patents and they’re like, you know, “Have your attorney call and we’ll figure it out.”
You mentioned at the beginning of all this, that you had a background in marketing to retail, you have all these relationships. I’m assuming that your relationships with some of the traditional retailers are maybe a little bit more personal and direct than Amazon, where the common complaint is, “It’s a black box and I can’t get anybody on the phone.” What is that dynamic like?
We actually have a pretty good relationship with Amazon management, and they turn frequently, you know, in categories.
You mean the people turn over in the categories?
Yeah, they’ll get promoted or move on to the next category, I think it’s maybe part of their development for their merchandising team and their employees in general. But right now, we have good relationships with management at Amazon that I’m actually quite happy about.
Do you see that social marketing effort generating a bigger return than the traditional marketing efforts?
It’s flipping to that right now. You know I was counseled by a lot of people not to do traditional TV marketing and advertising, but I believed in it, and I think it really helped our brand initially when we started it. But just this last year, really maybe the last 18 months, we’re starting to flip our spend more to social marketing. So, I see that trend for us headed definitely in that direction.
But every industry is a little bit different. Every category of product is a little bit different on how it reacts to social marketing versus traditional TV spend.
I came across Blackstone as a product of social marketing on TikTok, not as a product of television marketing. And the phrase that really tipped me off was, “I finally got a Blackstone.” And I was, like, I heard about this thing 25 minutes ago and there’s a community that’s like, “I finally got one.”
There’s a really active subreddit of people who get the product, and just post a picture of it, and everyone congratulates them, “You finally made the jump over to this category of product!” And that all feels very digital to me, very modern.
And all the companies who are doing that are very focused on direct-to-consumer businesses. The classic example I use is the toothbrush companies, who are, like, “Here’s the one toothbrush you’ll need for the rest of your life.” And then they’re going to go buy a million podcast ads, and Instagram spots, and whatever. And the listeners of Decoder know that I’m a sucker for every Instagram ad, so it works on me at least.
You’ve got a huge product, but you said it’s heavy, it’s big. And then you’ve got different models in every different store, because that’s presumably what the retailers are demanding of you. Walmart has different models than Lowe’s has different models, than Home Depot has different models, than Ace Hardware.
It seems like a lot of complexity to manage, and I’m wondering if that cost is worth the ancillary benefits that you might see? Or if simplifying, saying, “We’re going all in on direct-to-consumer,” which is what I hear a lot of the newer company CEOs tell me is the future. You’ve just got a different answer. So I’m wondering where you see that split?
Well, diversifying our product line, and selling those different product lines to different retail customers, that’s definitely a part of our distribution strategy and go-to-market strategy for sure. But it’s also mainly driven by demand from our customers. And everything we do is focused 100 percent on what our end-user customer is demanding, not so much what the retail customer is demanding.
For example, we have retail customers who hate looking at a propane tank. They want a cabinet, they want storage, they want doors and drawers. And for a long, long time we didn’t offer that to our end-user customer. And so we’ve started offering cabinet units at a little bit higher retail price points, and they’ve been extremely successful. And we’ll continue to move in that direction with product development.
And it just lends itself, for different retail selling price points, to differentiate that to different types of retailer who have those types of customers. So, again, for me it’s really driven by what my end user wants, and then we build those products and see where they fit. And it naturally works itself into a nice strategy of go-to-market at retail.
The other trend that comes up on this show, and on The Verge, all the time is recurring revenue. And I would commend you and thank you for not saddling me with some subscription to my griddle.
But almost every other kind of hardware startup we come across is, like, “We’re gonna sell you the griddle and then we’re gonna sell you steakpods.” And you’ve got to buy a subscription to steakpods, because they want to make sure I keep paying some money over time.
You don’t have that model. There’s a universe of accessories that you make, which I’m assuming are relatively high-margin, they’re spatulas and spray bottles and things. How do you solve that part of the puzzle when you’re selling one big expensive item and then the consumer might walk away?
We have the greatest answer to that question ever possible. You’re not gonna just own one Blackstone. You’re gonna buy a small one for your camper, you’re gonna buy one for your cabin, you’re gonna buy one that you travel with, you’re gonna buy one that sits on your patio. And then we come out with a new one that includes an air fryer, and then you gotta have french fries with your hamburger and you buy a new one from me. So our recurring revenue is called product innovation.
And then you hit on the second part of it, the accessories part of it. We absolutely have the best attachment rate for accessories in this industry and maybe in any industry. Most of our end-user customers buy between three and seven accessories for their griddle. And then the longer they stay with us as a customer, they continue to come back and buy more accessories.
And all of our accessories, again, are driven by what our end-users want to use on their griddle. And griddle cooking lends itself to such an awesome array of different accessories, because you’re cooking different foods. We’re not just throwing tools at you, and hoping that you buy some of them and they stick, or we’re not selling three-foot spatulas as a Father’s Day promotion because it’s gimmicky — our tools are used for specific reasons.
You know, we have a crepe kit. You need certain tools to make a crepe on a griddle, and we have those for you. We have a breakfast kit that has a pancake dispenser. We have a hamburger smash kit that works awesome if you want to make smash burgers. We have a taco rack, we have warming racks, we have domes for steaming and melting cheese, and all of these accessories really lend themselves to griddle cooking. And, by the way, other people buy them for their traditional gas grills because they’re awesome accessories.
And then the other thing, for recurring revenue, that we’re getting into is consumables. I don’t know if you’ve seen our spices that we’ve come out with right now? But we have almost 15 different flavors of spice brands, and they’re formulated really for griddle cooking in certain foods that you cook on the griddle. Again, we’re not just label-slapping and throwing stuff on spices just to try to drive revenue. We’ll never do that.
In addition, we have come out this year, with a whole line of sauces. We call it Sear & Serve. And what we found is if we used a traditional BBQ sauce on a griddle, because of a high sugar content, the sauce would burn, because, you know, sugary foods burn faster. And if you have a traditional gas grill, most of that stuff drips through into the flames so you don’t have a problem with it. But on a griddle, you do.
So, we had to design and come up with and market and manufacture a whole separate line of sauce that works for griddle cooking. And the consumer is loving it and responding to those flavors in a big way. So, that’s a consumable and we’ll continue to expand into consumables as they make sense. We have hundreds of ideas, but we won’t label-slap. We just won’t do it.
Let me put that into the context of computers. If you were the CEO of Microsoft, who was on the show a couple weeks ago, you just described a platform and then you have all these extensions to your platform, and that’s how you’re gonna make your money. So, you have a griddle and then you’ve got the steaming dome, and you’ve got the burger smasher. Microsoft or Apple or whoever would make sure that their burger smasher works best on their griddle and everyone else is at a slight disadvantage. And this is a constant conflict in the tech industry.
You can’t do that. Right? It’s a big, hot piece of steel and other people can make burger smashers and domes. That seems like a different challenge than the traditional tech industry. How do you compete with all the other people that make griddle accessories and might undercut you in price, or might buy the Amazon search terms to make sure they’re ahead of you? Because almost everybody else is searching for lock-in or searching for a moat. And it just seems very hard for you to find there, beyond branding.
Branding is a key part of it, without any question. And our customers are very loyal to their brand and they seek out a Blackstone cover and Blackstone tools and accessories. And then the other thing really is being driven by innovation, and knowing first what the customer’s looking for and not just copying second. And, yeah, we’re gonna get copied. We’re already copied and knocked off. And someone can always build it for cheaper and sell it for less. That’s fine.That’s the free marketplace that we live in. But it’s not a Blackstone. And the consumer has really resonated to this brand and will continue to drive our business because of that. They’re loyal to the brand.
It’s funny, Blackstone is a very literal name – the top of the griddle turns black over time. Do you ever get confused with the giant investment banking company that has spent a lot of time marketing itself as Blackstone?
Yeah, it’s kinda funny. I’ve sat on airplanes before wearing a shirt with my Blackstone logo on it and people ask, “Oh, you work for Blackstone?” and I know where it’s going. So I say, “Yeah, yeah.” “Oh, what do you do there?” “I’m the CEO.” And I’ve had people sit up and pay attention to me like never before. So, I’ve played with that a little bit.
You’re in Utah, you’re right next to Idaho. Do you think about going to Sun Valley and just seeing what could happen for you there?
(laughs) Haven’t done it yet. But, yeah, it’s not far away.
You mentioned competition. There are huge players in the space. You mentioned Weber, but you know, there’s Camp Chef and Cuisinart and all kinds of other companies that are coming out with competitors to you. Is that the market expanding? Is it, you’ve got to defend it? Is it, you’re gonna do a bunch of patent litigation? How does this work?
Well, we definitely will defend our patents, and we’ve done so successfully now three or four times on our rear grease management system. And all the other patents that we have, I have kind of an aggressive attitude on patent and intellectual property. We spend so much time and hard work and effort and money developing new products. So, when people knock me off, it’s one of the things that kind of sets me off. So, our patent attorneys make a lot of money and will continue to.
But we love innovation. And that’s what drives us and motivates us every day is coming out with new items. So far, the industry has kinda knocked us off, you know, like, we have a 17-inch, they came out with a 17-inch. We have a 22, a 28, a 30, a 36. You know, these sizes aren’t magical. It’s just what we designed and came up with at first to use, and it’s just funny. I think Coco Chanel said it best, “If you want to be original, be ready to be copied.” And I think that’s 100 percent true for us today.
Does that affect your relationship with retailers? You talked a lot about just educating the brick-and-mortar channel in the beginning. Now you clearly don’t have to do that. But other people are probably undercutting you or offering a bigger spiff. How does that play out for you in your role, trying to get more products in the market?
What’s been the most challenging for us has been the supply chain, especially right now. And just predicting and forecasting and coming up with the right amount of inventory we need to satisfy the demand. We really don’t know the answer to that question quite frankly. Because we’ve never had enough inventory, where at the end of our seasonality period we had too much inventory left on the shelves. We’ve never had enough.
So, we don’t know how much is really enough, number one. And number two, some of our other retailers are picking up some competitive products because they might think we’re more loyal to one retailer versus another, which isn’t true. We’re trying to satisfy the demand as best as we can with all of our customers. And as you grow a category and you develop a new niche in the category, like griddle cooking, all our other competitors are gonna look at that, and at a point in time we expect most of them to offer griddles to their customers.
Are you taking share away from the Webers and the Char-Grillers of the world or are people getting two?
It’s difficult to answer because there’s not a lot of good research data in our industry. Some of the sources where we used to get industry information don’t exist anymore. And we get bits and pieces and put it together and try to figure that puzzle out as best as we can, but I think pre-COVID we were starting to take market share away from the traditional gas and charcoal grill industry on one end, and the Traegers and the pellet grill guys of the world were taking it away on the other end. And so they were kinda getting squeezed in the middle.
But since the pandemic and COVID, I think that the pie has gotten bigger for everybody. I have professional relationships with a lot of my competitors, and they’re very, very good people, and right now, I know for the last two years, the gas industry has increased in sales. So, I think the pie’s gotten bigger. People are staying home and they’re cooking more at home, and they’re doing all those things that help our whole industry.
Housing is a big part of it. New housing starts are a big industry stat that we look at and try to stay on top of. That’s a positive for us.
But Blackstone has been growing, not necessarily because of the pandemic or anything else; we’ve been experiencing growth because the consumer is learning that cooking on a griddle is really, really fun. And there’s so much food you can cook on it. That’s really why we’re growing.
Is that a linear growth curve? This is the second time you said the pandemic didn’t have an effect.
No spike at all because of COVID?
Well, it definitely was there, but I didn’t have inventory to take advantage of it.
You said that back in 2006 that this was a labor of love, and you were putting money into it but not getting revenue back to cover your costs. Are you profitable now?
We are. Yeah.
And is that a linear curve? Or have there been any inflection points along the way?
No, it’s been pretty linear. You know, the bigger you get in revenue, the margins continue to get squeezed, competition comes in, as you mentioned earlier, and that can put pressure on your margin. And then just with the raw commodities that have gone up exponentially over the last 18 months, that definitely puts pressure on your margin, but we are very profitable as a company.
You mentioned shortages. Again, usually on the show I ask people about chip shortages. There are no chips in your products yet, I don’t think.
Well, we actually do have chips. We have a new electric griddle. And we just came out with a 17-inch earlier this year and we’re now just barely shipping the 22-inch electric griddle. And they both have chips and we’ve definitely been affected by the chip shortage in those two items.
What was the genesis of that idea? And what were the blockers on the way?
Well, the genesis of the idea is we wanted to be the first company to introduce an outdoor/indoor electric griddle. So, you can use it outdoors, it’s designed to stay outdoors if you want it to and you can take it inside and put it on the countertop in the house and cook on it. Really, inside the house right now the only offerings you have are extremely cheap electric griddles that you buy at, you know, discount retailers. And there’s really not a good electric indoor griddle, in my opinion, until we came out with ours.
And it’s a completely different demographic almost. It’s sleek, it’s very contemporary-looking, it has an awesome electronics panel on it with LED readouts, and it’s gorgeous. So, it’s easy, and you can set the temperature and you can see what temperature you set it to. Somebody who’s really precise in cooking and they want to cook a pancake at 352 degrees, because they think that’s the best pancake, they can do that on our E-Series.
That was kinda the genesis behind it. But just in the long run, you know, I worry a little bit about the future of using propane, potentially. And there could be some states who start coming out with green initiatives where charcoal and smoke, and even potentially propane, may be viewed negatively. And so I want to be in a position where it doesn’t matter how I heat my griddle plate up, I just need it to get hot so I can cook food. And that’s really kind of the initiative behind the electric series. And we will continue to expand that line as well.
You mentioned COVID production delays. You mentioned other kinds of delays. What are your biggest choke points? Where do you see the need for scale where you can’t get it yet? And where do you see the need for additional supply where you can’t get it yet?
Well, we need to increase overall production. Our main factory is in China. And it is an extremely large facility, and when I went there in 2014 for the first time and they were just finishing the manufacturing of this facility, I thought I could give them maybe two weeks of production a year, because this facility was so big. But now we’ve filled it up and we need more capacity than they can give us. They’ve added onto the factory and built multiple more buildings and production lines, and powder coat lines, and fabricating lines. So, they’ll catch up.
But we’re going to diversify a little bit outside of mainland China. I think that’s pretty common for my industry. We’re looking at Vietnam and some other countries in Asia. And we’re also looking at the United States. And, as we start introducing product that sells at higher retail price points, that lends itself to, you know, some manufacturing in the US. That, I’m actually quite excited about and looking forward to.
What’s the higher price point you need to hit to support manufacturing in the United States?
That’s interesting. Because if a factory has enough automation with their equipment, I can get to some retail price points probably in the $700 price point and up. So that’s actually coming down. Before it was $1,500 and up. But it’s definitely coming down right now.
Put that in a context for me. What’s your average retail price right now?
My average retail price right now is probably $400, $500.
I have a 36-inch Pro Series, which I think I bought for $500. So, you’re already selling at the high end of your product line, mostly?
That’s our main sweet spot, right in that $200-$500 range right now, as of today. We’ll be introducing some higher price points and we even have some items that retail for $1,000 right now. And we will see more of a push in that direction, for sure.
We’re doing it for two reasons. One, the consumer wants more features on it, like I mentioned. They want more of a patio-looking griddle. Mom likes it with a hood and with a cart, so she doesn’t see the griddle when it’s not in use, and the propane tank. And then second, just prettier, better, and because of supply chain issues and cost increases, our retail price points will be increasing over the next 12 months.
You mentioned Traeger and some of the other companies that are, like, “You gotta smoke your food over wood pellets and that’s the way to go.” And that is an explosive category as well.
You mentioned Weber’s getting squeezed on both sides, but do you feel the pressure from that category? I mean, the Traeger products are really expensive. So people buy a Traeger and then they wanna do everything on them. And you’re selling them a very different way of cooking. Are they your competitors? Are they more category expanders? How does that work in your mind?
Yeah, you know, on one hand, I look at anybody as my competitor, because we all live on a budget and we all have only so much money to spend. And when it’s time to budget for an outdoor appliance, I got $800, or $500, or $300. What am I going to go spend it on? So, in a sense, everybody’s my competitor. But beyond that, beyond the budgetary part of it, when you get to how I want to cook and what I want to cook, then who’s my competitor?
And Traeger, we really look at pellet grilling or charcoal grilling, smoking the food, like a Green Egg or even an offset smoker, some of those kinds of products, as a style of cooking food and a method of cooking food. And it’s awesome. I mean a pork shoulder or a brisket out of a Traeger tastes phenomenal. But, it could take six to 14 hours of cooking time.
So, we look at smoking food as more of an event that happens, maybe once a month or maybe once a week, if you’re a real dedicated cook. But if it’s Tuesday night, it’s 6 o’clock, and you’re on your way home from work and mom calls and says, “You’re feeding the kids tonight.” You stop off at the grocery store, grab some hamburgers and buns and some hot dogs and 30 minutes later you wash one spatula. You just cooked your dinner on the Blackstone and you’re done. So, our style of cooking, because of what you can cook, how fast you can cook, and the variety of food that you can cook, and the fact that you can cook breakfast, lunch, and dinner on a Blackstone, we’re not going anywhere. Griddle cooking is absolutely here to stay and will continue to grow.
Now, to your other point. The consumers are spending more time in the backyard, and they’re paying a lot of attention to what they cook and how they can cook it. So it’s not uncommon at all for the consumers now to have multiple units of cooking appliances in the backyard for different reasons, as we just mentioned.
Do you think about expanding into those other categories? Have you thought about building a smoker or anything like that?
Yes. And, again, it would have been really easy for us to do. We’ve had a lot of our customers request that we have a Blackstone pellet grill, but again, we’re really disciplined. And that’s hard for me because I’m such an entrepreneur. Saying no is a really challenging thing for me to do, but I’m not going to put my name just on a “knock off” pellet grill. I won’t do it. If we come out with a pellet grill, there will be a very specific reason why we do it, a Blackstone reason why we do it. But yeah, we look at product expansion every day. We look at the category, look at the way people cook food. But that will definitely be driven by what my customer wants from us.
We’ve mentioned Traeger several times and they are very popular. They have a lot of computer stuff going on with their pellet smokers. There’s an app. There’s Bluetooth. You can monitor it from five states away if you want to. Weber came out with similar features. That product was a bust, which is really funny to me, right?
I mean, at the end of the day, you’re just lighting a fire, putting some food over it, and cooking it. But because Traeger was a ground-up product, they integrated the computer stuff from the beginning. This is just a classic disruption story to me, as told through charcoal grills, or pellet grills, or what have you.
Do you see that same kind of trend, that the bigger companies just can’t see what you see, that they haven’t architected their companies around the product, and so they’re gonna misfire? It’s like a classic tech company story to me. IBM missed the PC until the PC companies came out. Weber missed computerized smoking until Traeger came out. What’s the thing that you see that they’re gonna miss?
Hmm. Interesting question. An app makes sense on a pellet grill because you’re cooking over such a long period of time. You won’t have to tend to the fire as often if you can monitor what is going on. They can monitor temperature or if you’re getting low on pellets, all those kinds of things so it makes sense in that product. If it makes sense for us to have some kind of app that would help you cook better on the griddle we would definitely come out with that. We haven’t thought of what that is yet, because you cook so fast on a griddle, you know? 15 minutes, you’re done. You’re not gonna throw some food on the griddle and walk in the house and start watching the game and get beeped on your phone to go out and flip the steaks or something. It just doesn’t make sense.
I don’t know the answer to that question, what they’re gonna miss next. That’s a hard question for me to answer.
Again, your first sale’s in 2006, it’s 2021, you’ve been on a long journey. You’re at an explosive moment of growth and awareness. What is next for Blackstone?
That’s a really fun question for me and I have to check myself so I don’t give away all the competitive secrets that we’re working on.
Oh, come on, we’re friends.
What’s in our development pipeline is freaking awesome. It keeps me awake at night, the excitement, the different product lines that we’re going to come out with, the expansion of our product. Different retail price points, different features. You know, we were the first guys to put a deep fat fryer on a product that went outside, and then we came out with an air fryer the next year, and now we’ve come out with electric griddles. That is not even the tip of the tip of the iceberg of what we’ve got in the pipeline. So without tipping my hat too far, you will see a tremendous amount of new product that will come out over the next year to five years. Our development pipeline is very full.
As we talked about, you’re doing more social media marketing and you’re doing a little bit of direct-to-consumer sales. Do you think you’re going to bring that relationship for all those new products closer to you and do more internet marketing, or are you going to remain pretty broadly distributed?
I’ll remain broadly distributed, but the social media part of it and the direct-to-consumer, I’m going to let the natural course take place. In other words, in my industry, if 15 percent is direct to the consumer — and I’m not quoting a number, just pulling one out — but if 15 percent is direct to the consumer, and over time that goes to 40 percent direct to the consumer, I’ll follow that trend. But I don’t necessarily see myself driving that trend and saying, “We’re gonna end our relationships with our retailers and go direct-to-consumer only.” I’m not doing that at all. I love my relationships with my retail customers. They’ve been awesome partners. They’ve been really, really good to us.
That’s great. Well, Roger, thank you so much for coming on Decoder, this was an absolutely fascinating conversation. And when you put out your next WiFi-controlled smoker-griddle combo, I expect an exclusive on The Verge.
You got a deal.