, and finally by households that line-up with their value proposition (Serviceable Addressable Market of SAM).){kind=link}
With Traeger and Weber IPO’ing last year and the upcoming SPAC IPO of Blackstone, there has been some good data on sizing the outdoor cooking market. We compared how each company views the market size to see how it affects the opportunity. All three companies sized the opportunity by starting with the total US households, then by looking at the households that that own a grill (Total Addressable Market or TAM), and finally by households that line-up with their value proposition (Serviceable Addressable Market of SAM).
Total US Households
The top of the funnel for determining the SAM for an outdoor cooking company starts with determining the number of households in the US. Blackstone came up with 140 million, which they estimated from census data. Traeger also used census data, but came up with a number that was a little less, at 130 million. Weber didn’t disclose the exact number that they used for the total number of US households, but we backed into it at about 125 million, so near Traeger’s number.
Installed Base of Grills
The next layer of the funnel is the Total Addressable Market (TAM) defined as the number of US households that own a grill according to Weber and Traeger. We assume they are using the term “grill” as a catch-all that means grill, smoker, pizza oven, griddle, etc. Blackstone specifies the definition of the TAM as “US household that own an outdoor appliance and use it at least once a year”.
Weber relied on data from MetrixLab and estimated the TAM to be the lowest at 56% of US households, or 70 million units. Like the top of the funnel, Traeger is the next highest at approximately 60% of households or 76 million. They estimated this based off internal and third-party market research, historical surveys, and interviews with market participants. Finally, Blackstone is the highest of the three companies at 83 million.
Outdoor Cooking Market Size
Now we get to the Serviceable Addressable Market (SAM), which each company defines slightly differently, but is essentially the same market. It the number of people that could be interested in purchasing an outdoor cooker. Each company is fighting for of piece of this pie.
Weber SAM
Weber doesn’t disclose their SAM in units, like the other two companies, opting for a number in billions of dollars instead. To back into units to make this comparison apples to apples, we assume that they are defining each market with a constant unit rate. Taking their estimation of $9 billion as their TAM and dividing it by their TAM in units (70 million), we get $128.57 per unit. We then divide their SAM in dollars ($7 billion) by the unit price and end up with with a SAM of 54 million units.
What’s interesting about Weber’s market information is that of the 70 million grills that are out there in the US, they estimate 30 million are Webers. That’s a huge share of the US grills. Weber believes that their business isn’t dependent on replacements though, they can continue to grow through new buyers, second grill purchases, specialty grills, accessories and consumables. They estimated their 2020 penetration was 18% of TAM, by far the largest of the three brands.
Traeger SAM
Traeger defines their SAM as the “Total U.S. Households that value Traeger’s differentiated quality, technology and convenience”. We assume it’s likely comparable to that of Weber and Blackstone. They estimate it to be 45 million based on a management survey analysis as of 2021. Of that 45 million, they have a penetration of 6%.
Blackstone SAM
Blackstone defines their SAM as “U.S. households that use an outdoor appliance at least once a year with interest in purchasing a Blackstone product.” They are the largest with their SAM estimate at 66 million. Of their SAM, they have a penetration of 6%. What’s interesting is that while their penetration still show a large runway for growth they are dominant in the existing griddle market. In Blackstone’s data from Burshek Research & Consulting, they estimate their griddle market share at a whopping 80%.
Putting It All Together
While Blackstone, Traeger and Weber all had different numbers, they had methodology and estimates in the ballpark of each other. A SAM estimate between 45 million and 66 million is reasonable for an outdoor cooking company. Keep in mind that with a 21 million unit difference between the top and bottom estimates, a 1% increase in penetration translates to an additional opportunity of 210,000 units sold. Time will tell if Blackstone’s SAM is really larger than that of the traditional grill player in Weber and the pellet grill leader, Traeger.