Fired By New Product Innovation, Solo Brands Shines Bright A Year After Its IPO

It’s been a little over a year since Solo Brands joined the 2021 rush into the public markets when over 1,000 companies filed IPOs, an all-time record. Known primarily for its flagship Solo Stoves stainless steel smokeless firepits, Solo Brands filed shortly after two outdoor cooking companies to which it most closely compares: Traeger and Weber.

None of the three have much to crow about regarding stock performance. Traeger stocks are off 84%, from its IPO price of $18 and now trading under $3; Solo dropped nearly 80% from $17 to around $4; and Weber is down 42% from $14 to around $8. But given the volatility of the market, that’s no surprise.

What is surprising is the dynamic performance of Solo Brands as compared with Traeger and Weber. Through its last nine months ending September 30, Traeger reported revenues down 15%, from $611 million last year to $517.8 million this. Weber’s full fiscal year that closed the same day saw net sales down 20% to $1.6 billion compared with $2 billion last year.

By comparison, Solo Brands reported revenues over the last nine months rose 41%, reaching $320 million as compared with $227 million last. Third quarter revenues were up even more, 47% reaching $102 million.

Looking forward to the fourth quarter when it historically generates 35% to 40% of annual sales, the company is geared up for a strong holiday season with a range of new products that meet the company’s overarching mission:

“Solo Brands exists to create good moments and lasting memories through outdoor activities,” CEO John Merris shared.

While both Traeger and Weber are firmly entrenched in the outdoor cooking space, Solo Stoves dabbles in food, but it has a much broader runway around the elemental human experience of sitting around a campfire, only without the bother of smoke that people have been plagued with since first learning to make and control fire.

Combined with Solo Brands’ growing family of outdoor brands, including Chubbies activewear, Oru Kayak and Isle paddleboards, and anchored in direct-to-consumer marketing that powers cross selling and repeat purchases, Solo Brands can be said to be a truly outdoor living experiential company.

While the company doesn’t report revenues of its individual brands, Solo Stoves is the engine pulling Solo Brand’s train.

Beginnings

Solo Stoves is so much more than just firepits but it got its start there. Solo Stove was founded by brothers Spencer and Jeff Jan in 2011 selling ultra-light portable stoves so backpackers could quickly set up camp and boil water in under ten minutes using only sticks and leaves readily available campside.

It grew from there with the launch of its Bonfire backyard firepit model in 2017. People quickly caught onto the advantage of its virtually smokeless design, made possible by its patented airflow technology that fully combusts the tiny particles that make up smoke. Weighing in at only about 20 pounds, it was also portable so it could be moved to other places in the backyard.

Solo Stoves also caught the attention of Bertrum Capital, which invested in the business in 2019 to help the brothers grow market share and build its digital marketing expertise.

CEO Merris was hired after an informal interview with the brothers done as a favor to glassboard company Clarus, another Bertrum investment and where he was chief revenue officer.

“The brothers were friends with the founders of Clarus. They ostensibly wanted advice from me on setting up a sales organization, so I thought I’d give them an hour of free sales advice. But what they were really wanting was someone to help the company grow. Nine days later, I started as CEO and the company’s seventh employee,” he said.

Merris immediately got to work, growing the company from about $40 million in revenue in 2019 to finish 2021 at $404 million by increasing Solo Stoves business organically and acquiring three other brands.

“Now we are a public company with about 200 employees and another 200 down in our Mexico manufacturing facility. A lot of the credit goes to our direct-to-consumer sales model and the information we can derive from our 3.4 million customer list. This gives us insight into what innovation matters most to our current and future customers,” he continued.

Innovation In Its DNA

From the first tote-along camp stove to the evolution of the smokeless backyard firepit, Solo Stoves grew by adding new models and accessories to enhance the communal firepit experience, like grill tops and a tabletop surround.

And this year, it’s continued to introduce new products like a tower patio heater that burns wood pellets, a tabletop pizza oven powered by gas or a Pi Fire pizza oven accessory that goes on top of its firepit models. Oprah picked that innovation as one of her best holiday gift ideas this year.

“Our customers not only love our products after their initial purchase, but they often come back and purchase more from us,” Merris explained. “Repeat customers account for roughly 50% of our business:”

And that’s the thinking behind the introduction of its ultimately giftable mini-Mesa tabletop model. Supported by TV advertising, it introduces the smokeless fire experience to a whole new audience, giving them a way to engage with the brand for under $100 with hopes that it brings them back for more.

“With Mesa, we’re looking forward to the upgrade opportunities from new customers who learn how easy and quick building a fire with Solo can be. Plus our existing customers have been asking for something smaller for when time is limited so they can have a fire for only 30 minutes, instead of two or three hours like in a bigger stove. This will be a great add-on for them. And then it makes a great gift and comes in colors too, so it works as a decorative item,” he continued.

Taking Solo Brands To The Next Level

Merris’ vision for the company is as expansive as all outdoors. For Solo Stoves he sees a total addressable U.S. market of about 100 million households thanks to Mesa opening Solo to urban dwellers.

“When Weber and Traeger went public, they said about 80 million households own a grill. We figure if you have a grill, you can probably add a Solo Stove too. Now with Mesa, we bumped that up because we can add people living in apartments and smaller spaces,” Merris continued. “We’ve only penetrated one and a half to 2% of our total market.”

And he added the TAM doesn’t include its international opportunities, which the company plans to lean into in 2023 by kicking off a Solo Stove partnership with Canadian Tire.

In addition, it’s also signed on with Costco offering an exclusive fully smokeless firepit model at a significant discount. Ace Hardware, Dick’s Sporting Goods and many independent hardware stores also stock the line.

Currently, the company’s business is about 85% DTC and 15% wholesale, but it aims to build its wholesale business to 20%. The tabletop Mesa model could open more retailer doors.

In closing, Merris said this year’s new products will continue to build its marketshare – “We’ll continue to take advantage of the opportunities with product innovation that we launched in ’22 because they are not even a year old yet.” – and be followed by even more exciting innovations in 2023.

And also on his plate is a fuller integration of its family of outdoor living brands.

“We will continue to leverage the power of the platform that we’ve built to be able to cross-market all of our outdoor brands, including Chubbies activewear, ISLE paddleboards and Oru Kayak. We’ve found through our data and analytics there is a lot of overlap in the customer bases for our brands.

“We have a cohesive vision of the synergies between the brands. We want to show from the outside looking in that there is no question why these brands coexist under Solo Brands because we believe good moments and lasting memories are made better outdoors,” he concluded