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YETI made headlines last summer when they partnered with Butter Pat Industries to release a ultra-premium cast iron skillet. The manufacturing process that took years to develop meant that it was heirloom quality, but also carried a $400 price tag.
As with most YETI branded products, the skillet sold out very quickly. The collaboration led to much bigger strategic changes.
YETI Acquires Butter Pat Industries
The success of the partnership led to YETI acquiring Butter Pat Industries in the first quarter of 2024. During that same time period YETI also acquired premium bag maker, Mystery Ranch. YETI didn’t breakout the purchase price, but for both Butter Pat and Mystery Ranch they paid $48.5 million in cash.
What they were buying with Butter Pat is the talent and the technology behind manufacturing their stand-out cast iron products. It gave YETI an opportunity to quickly enter the premium cookware category without having to go through a long, and expensive development cycle.
I would say whenever we – and we talked a little bit about this, but whenever we look at M&A through the lens of products, which is really what we’re doing here, we’re looking for talent acquisition in what I would call technology or designs, in kind of technology and designs in conjunction for what they bring that we think is a differentiated point of view that’s leverageable and that’s scalable.
Matt Reintjes, President and CEO and YETI – Q4 2023 Earnings Call
Premium cookware, especially cast iron, is a logical expansion for YETI as it compliments their existing product portfolio. It also has a sizeable addressable market, where they see opportunity.
In cookware, by leveraging acquired designs and processes, we are developing a new line of YETI cast iron cookware and accessories that we’ll launch later this summer, allowing us to access the $10 billion plus premium cookware market.
Matt Reintjes, President and CEO and YETI – Q4 2023 Earnings Call
They feel that they can apply what has made YETI so successful as a brand to cookware and unlock additional value.
Two things and we’ve said this before, we think those are two very large, highly fragmented categories, very global in nature, both bags [with Mystery Ranch] and cookware. We think there is an opportunity to leverage YETI’s commercial go-to-market the way we tell brand stories, the way we do our product marketing, the way we cultivate our consumer base. We think it’s a really attractive opportunity in both of those to drive further ownership of YETI repeat purchase further use cases.
Matt Reintjes, President and CEO and YETI – Q1 2024 Earnings Call
New YETI Skillet
That lead-up has commenced with YETI releasing a new line of premium outdoor skillets. They released an 8-inch for $150 (check price), a 10-inch for $200 (check price), and a 12-inch for $250 (check price).
The price on the new 12-inch skillet is $150 less than the limited edition release last summer. YETI did this through a new pricing strategy and reduced manufacturing costs from the acquisition.
And as you mentioned, the cookware, we’re excited about it is a slightly different price point than the legacy product. As we brought that, we actually moved that price point down as we worked with our suppliers to not only drive some what we think are some incredible improvements to what was already the best cookware on the market or the best cast iron on the market, but also get it to a place that we thought was a really great kind of fit within the pricing strategy and the pricing ladder at YETI.
Matt Reintjes, President and CEO and YETI – Q2 2024 Earnings Call
While it’s YETI’s first entry into cookware, it definitely won’t be their last. They have more products planned in the near future.
Our category expansion will continue in the second half of the year, starting with the introduction of our first line of cookware products.
As planned, we will introduce three sizes of YETI cast iron skillets later this month, which will initially be available in our YETI direct channels, with prices ranging from $150 to $250. We believe this will be the best cast iron in the world, opening the door for broader opportunities in the cookware and culinary space going forward.
Matt Reintjes, President and CEO and YETI – Q2 2024 Earnings Call