He changed outdoor cooking forever — then took over Weber

22:11and I had to make some changes there. So it took a minute from the top, really integrating my C-suite 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 get that done. But the results are phenomenal and the momentum has been building and it's really coming together.

22:35Nilay Patel:Most people are never going to hire a consulting company to manage an integration. But this is a pretty high order thing to do. Like very, very few people have to make a decision of which consulting company to pick. How did they pitch you? How did you decide? When I had my previous financial partner, a week after we closed the deal with them, this is going clear back to 22, 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.

23:13You 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've 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.

23:58And it's turned out to be a really good decision. They've been really, really helpful.

24:02Nilay Patel:One of my tropes here on Decoder 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 CEOs who are like, no, no, 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, two very different structures. It sounds like you know what you want, right? 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 telling 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 you know when you start doing this integration you want to take the best from 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?

24:54I want world class. So I want benchmarks of the best finance department, the best operational team in the world at whatever company. 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 enthusiasm 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 going 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 for the employee.

25:38That's really kind of where I'm keying my focus.

25:45Nilay Patel:We need to take a quick break. We'll be right back.

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28:59Nilay Patel:So let me ask you the decoder questions now. It sounds like you have a ways to go in this integration. How are you structured now? Is it two different companies? Is it 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 &D? Are you sharing product development? Yeah, and kind of by centers of excellence, if you will. And we have a 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, just coincided with the merger.

29:34We have R &D facilities here in Logan and in Chicago. And then we have teams around the world. Weber has a big organization in EMEA, 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 we're keeping it based on centers of excellence and where expertise lie because nobody in Logan had ever built a gas grill before. So I'm not going to really take those engineers and try to expect them to get up to speed and vice versa with griddles in Chicago.

30:18Nilay Patel: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. Are you canceling the slate? 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 product. Well, I shouldn't say it that way because there's a lot of doors, but there's Home Depot, Lowe's, Ace, Walmart, Amazon, Costco.

31:01And 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$150 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$7.99 slate is probably the answer for them.

31:50Nilay Patel:Let me ask you about that, just the development of that product as you combine the companies and you combine these cultures. Blackstone, every year, I just look at the product catalog. I'm like, everything is brand new. It's almost like the company is starting from scratch over and over again. Weber is very classic. That cattle has really not changed. And the Summit Grill that my father-in-law bought me 10 years ago and the Summit Grill today, they're virtually identical. In fact, the big difference is I think the new one can accept griddle plates in mind. It's like fundamentally the difference.

32:20Nilay Patel:That's a different approach to product development. Are you going to have one product development team that 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 R &D group. We have consolidated that. That was one of the first departments I wanted consolidated, even though it wasn't the easiest. because we have great talent in both offices now. So we have a VP over R &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 grills, for griddle.

33:01But if we have a group working on griddle, they can work on either brand and vice versa with gas grills. If Blackstone decided to ever get into gas grills, that team would develop that for Blackstone.

33:12Nilay Patel:So this reminds me of Mary Barra 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 100 % sure, but they might have a DeWalt 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.

33:46I'm not going to retail that way. If I go into Costco, my sales team that calls on Costco, the commercial team, they're representing both brands to the buying teams there.

33:58Nilay Patel:And then I'm assuming all the rest of your functions, IT and legal, that is all just long since combined. Correct. Yeah. You said something really interesting. I just want to come back to it really quickly. You said there were hurt feelings on both sides. What were the hurt feelings on the Blackstone side? Weren't you just the winners? It feels like you're the conquering heroes here. No, I mean, the reality 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.

34:32We've had a great run. that can breed complacency. You better wake up every day and feel like you're starting at the zero yard line and you got a hundred yards to go. Nobody gets to start at the 10 yard line. So that was, that was some of the, Oh, 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?

35:00Nilay Patel:How many employees do you have? About 2 ,100. And how's that split between Weber and Blackstone? 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 Blackstone people? Or are you going to have a central company and then the two brands express differently? A central company 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 Blackstone brand?

35:34The Weber brand is, it serves the customer more on a premium level. And it is for, you know, 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.

35:58Nilay Patel:I feel like I could waste an hour on that, but we're going to let that one go because I don't want to run out of time. I need to ask you a decoder question. I think this has changed for you 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 it. And let's say it's a marketing decision. I expect my finance guy to chip in and make a contribution as to the comment. 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.

36:36So I try to get everybody together and 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.

37:02Nilay Patel:You mentioned you had to make a lot of decisions about people, right? There are 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 Blackstone side was. Making decisions about people is really hard. It sounds like you just had to make a lot lot of decisions about 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, line item by line item, job function by job function.

37:39And 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.

38:07Nilay Patel:Tell me one of those. Certainly you had VPs 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 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 from 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.

38:50And the folks in Logan got more 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.

39:05Nilay Patel: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 user 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?

39:38Nilay Patel: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. 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 kicks and then we're going to sell the dome to melt the cheese on the cheeseburgers.

40:17Nilay Patel:And that was such a huge part of your focus then, right? You weren't just going to sell one griddle, you were going to sell an entire lifestyle. Now you'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 Blackstone and then I'm going to buy one set of accessories and another set of accessories. And then Alexis O 'Hanian is going to make dinosaur pancakes with his kids on Instagram. That's going to sell even more.

40:45Nilay Patel:Like how does that work as your role has gotten so much bigger? Thesis 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 the other interesting thing is that with the retail marketplace the way it is right now, the way it is today, 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.

41:22That was not flawless, I should say. We had plenty of headaches there. And then 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 dad's always wanted. 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 got to sell the fries with the hamburger.

42:00So accessories are a really critical part of our total overall business for both brands.

42:05Nilay Patel:The interesting thing about the griddle market, when you said that to me, you know, I was a new griddle owner five years ago and I was like, yeah, I want to buy 10 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 will buy something else from us. Everything we build in accessories, especially, and we learned this the hard way because at first we're like, oh, let's do this. Let's do that. And we would put those products in the market.

42:35They 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. it's all consumer driven on the accessories what's an example of that uh 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.

43:22And 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 50 accessories. Here's the top 10 sellers. Here's the bottom 10 sellers. Let's go through item by item, talk 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. So that's kind of the process we go through.

43:57Nilay Patel:All those accessories are made overseas. You've mentioned overseas manufacturing and tariffs and Liberation Day now several times. It's interesting, you have competitors who are public. Traeger is a public company. They've had to just loudly say that tariff policy and trade policy has hurt their business. It sounds like that's the same for you. Is that something you're actively lobbying against is something you're just dealing with? Not lobbying, dealing with, and it affected the whole industry because everybody builds overseas, except interestingly enough, Weber, because we have a factory just west of Chicago in a suburb called Huntley, and we still build most of our kettles for the US market in Huntley, Illinois.

44:38And 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 for a kettle. And we've upgraded the quality of that thing. It has a 10-year warranty on it. That's amazing. A kettle gets hot with coals and everything in it that you put in there. It gets beat up and abused, but we build it at a quality level that we can maintain a 10-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?

45:18Big surprise. But demand 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 US and continue to figure that puzzle out. I'd love to build more in the US if I could, but this is not a particular product. But if something retails for$600 or$300, the customer votes with their credit card, and they vote for$300 because the quality is the same.

45:50Nilay Patel: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 for manufacturing in the United States just to have more control of my supply chain. That would 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.

46:26Nilay Patel:I don't think you 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. Has that affected you? Or do you stare down the barrel of NVIDIA buying all the chips in the world and say, this is really hurting our iGrill portfolio? It hasn't impacted us, because we haven't expanded into that category deep enough to where it would impact us. But we did buy another technology called June Ovens, Weber did, and it has some phenomenal technology for cooking.

47:03It'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 our 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 in outdoor cooking is with pellet grills. Because on a griddle, it takes you two minutes to cook a hamburger, right? 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, 14 hours to cook something.

47:42The connected device is really beneficial and helpful.

47:49Nilay Patel:We have to pause here for another quick break. We'll be right back.

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50:48Nilay Patel:So we did have the CEO of Traeger 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, and 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. Traeger is 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. Grittles are what you're describing. You can make a hamburger in two minutes.

51:17Nilay Patel:It's great. 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 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.

51:49It's a phenomenal app. You can use it to cook 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 mention that because I haven't cooked on a gas grill for 25, 30 years, right? I was going to ask you about this. You were off it the last time we talked. You're like, I don't even need this thing anymore. That's funny. Those are some words I had to eat. I said many times, we will never sell a gas grill. And now I'm the leading seller of gas grills. But it's funny. So in the Chicago area, there are four restaurants with the Weber banner on them.

52:28And 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. It was amazing. 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 hot zone and an indirect and direct zone, all those different kinds of things that people need to learn and may or may not know.

53:08So we're going to have all of that set up. And you know how Blackstone, we've been huge on social media. That'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. Because when you fire up a really good ribeye on a Genesis or a Spirit or a Summit gas grill and you know how to cook it right, it's pretty darn good steak, I have to admit.

53:33Nilay Patel:There's a lot of people in the Black Zone subreddit who are going to say that actually it's much better on a griddle. Well, I know. No, but 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 grills because of the retail price point. They're not trading from a 36-inch griddle to a 28-inch griddle because of money. They're going all the way down to a charcoal grill. Wow. 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?

54:09No. Well, it's part of it. Fuel is definitely part of it. I mean, I had some reports that I was studying the other day, and the bottom…

54:18Nilay Patel:If you're listening to this, Roger's literally looking at the reports on his desk right now. The bottom almost, let's see, 50 % of our consumers are spending 15 % to 20 % on power. That includes electricity at home, gasoline, propane. And those customers are squeezed. If they're spending 50 % of their income on housing and 20%, 25 % on power, they have no money left. It's a 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?

54:59Nilay Patel:How do you view that statistic? Before I learned this, I mean, we saw that. We saw that as a trend developing this year. 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 because they've crept up over time. They can retail for$200. And traditionally, that was a$100 retail item, and now it's all the way up to$150,$200. 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.

55:41Nilay Patel: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 tariffs 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, they're a sheet of steel that's molded to a half dome on each side and put some legs. 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, 10-year warranty.

56:10Nilay Patel:The CEO of Big Green Egg was on the show a couple years ago, and he said specifically about the kettle, they cost 200 or 300 bucks. They can buy it at the grocery store. Within two or three years, you're buying another one because they fall apart. The last time 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. People 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.

56:36Nilay Patel: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 the 10 years across the product line, or is it the kettle? No. The Weber gas grills, some of them have a 15-year warranty. The biggest difference there is rust. And Weber grills traditionally have been made, we 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 enamel-coated paint on the top, which doesn't chip as easy. It lasts a lot longer.

57:17So 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 one for$300, and you can immediately feel the difference as a consumer.

57:34Nilay Patel:Do you think you're hedged against trends? Do you ever worry that smash burgers are just going to go out of fashion and maybe big gas grill burgers are going to 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.

58:09So we try to spot trends to where we have time to react to that and make sure that we're spot on with what the customer wants to pay and buy.

58:19Nilay Patel:I'm asking that because, again, five years ago when we talked, the Blackstone Griddle was a TikTok sensation, particularly Smashburgers 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 800 number. You were literally just trying to create brand awareness on television.

58:50Nilay Patel:You're talking a lot now about informational content for Weber kettles and teaching out people how to use charcoal and how to use gas grills. Is your marketing effort focused more on social media now, or are you still so heavy on TV? The spend that we have has definitely changed since we first met, where we were 100 % spend on traditional television advertising. Off the top of my head, it's probably closer to 50-50 spend 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.

59:29I still don't have an 800 number on the Blackstone brand. Just go to blackstone.com and most people go to their favorite e-tailer and purchase the 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 in 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.

1:00:07They'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 10 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 definitely that, that has shifted now to more people buying online than five years ago in a big way.

1:00:34Nilay Patel:I think that's really interesting because, 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 with cooking content in it. You were early to a lot of these trends. These 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 Barocas, the CEO of Shark Ninja, was like, we have 10 ,000 creators that we work with on brand deals and we evaluate the sentiment analysis of their comments.

1:01:14Nilay Patel: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. Okay. 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 griddle 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 5 million followers.

1:01:51Pay me$3 million 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 nobody they think they have to go buy 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 start cooking on a Blackstone they start getting a great following because people want to follow the brand.

1:02:29They think it's them. And my competitors think it's them. 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.

1:02:42Nilay Patel:Have you talked to some of those influencers? Some of them truly had hurt feelings that you hadn't competed for their attention or their brand integrations because that's their money. The platforms don't pay the influencers any money, really. It's all brand deals. It's all dynamic on that side of the house for sure. We have conversations with a lot of them and some of them, you know, some of them came to us and they negotiated and they, like, I won't pay that money. And they can be hurt 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 influencers because I wish them all the best.

1:03:22And 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.

1:03:34Nilay Patel:How do you think about finding that next new customer? And maybe it's different. Blackstone has become a household name. Weber is certainly a household name. It's the first thing people think of. The logo is iconic. But this is the challenge for everyone now is finding that next new customer who, when we're all just sort of awash 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 you see a world where the content travels organically?

1:04:07Nilay Patel: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. Where 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, I haven't got caught up yet on Weber, but on the Blackstone side, it's still by word of mouth.

1:04:42So 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 or we shouldn't spend money.

1:05:23That is just an ongoing process on a daily basis.

1:05:27Nilay Patel:But you're saying the biggest share is still word of mouth. 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 You got to scrape it. If you leave it over the winter, you got to clean the rust off of it. That 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 everyone's just like cook another pack of bacon and it'll all be fine.

1:05:54Nilay Patel:Like there's some aspect of like this thing is harder to use than a regular gas griddle that you can just let deteriorate until you buy a new 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 preseason griddle at the factory. And they came out with a new process on how to do that.

1:06:30It drives the cost higher. It's more expensive to do. But at least they went after a concern from the consumer. They just didn't knock me off. and say, here's ours, it's Weber. They came out with a feature on it. So that makes the industry better. That's great. And as a result, 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 total number of units we sell and the complaints we get about rusting, it's a really, really small percentage. and we have so many cleaning kits and restoration kits and hundreds and thousands of YouTube and TikTok videos on how to deal with it and how to fix it.

1:07:16And in 30 minutes, you can clean up your Gretel. It's really not that hard.

1:07:19Nilay Patel:Now, I'm just curious about that because that is the competitive dynamic, right? Of having the Weber and 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 Gretel competitors that you wake up and think about every day? There's always a Gretel 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.

1:07:47Nilay Patel:That dynamic still exists, right? There's any hot product in the world. You've got Chinese manufacturing partners. You 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. Duke 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.

1:08:19My big advantage is we have two unbelievably strong brands. You can knock me off, but it's not a Blackstone or it's not a Weber. So that's a big advantage that we have. In my opinion, the key to that, I can't just rest on my laurels and say, well, I have the coolest brand. Who 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. 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, it's a big capital expense, and then you start buying inventory in minimum quantities from, they're not going to build you 10.

1:09:09You 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 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. Their speed to market sometimes astounds me. I have a bigger problem on my accessories with that than I do on the grills and griddles.

1:09:37Nilay Patel:Yeah, for sure. You go on Amazon, 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 I mean, that's the recurring revenue, right? This is the thing we've discussed now for a while. And it's our brand. And 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.

1:10:13And they get shut down and then they move on to the next product.

1:10:17Nilay Patel:Amazon's a unique case, right? They'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 I get backordered 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.

1:10:57So that's probably the biggest challenge with Amazon. And it really is difficult to get that overridden by a human. That's the algorithm and that's what it says. And that's what kind of what they stick to.

1:11:08Nilay Patel:As you can tell, I could obviously talk to you about this for hours upon hours. You're gonna have to come back in faster than five years. I want to end with kind of just a big picture question, and I kind of alluded it to earlier. The last time we were on the show, five years ago, you had been at it for a long time, right? You started the company in 2008, and you were experiencing this rapid kind of big growth, and you were the disruptor CEO. And you were operating every piece of this business. And I could tell. You were just in the weeds of everything Blackstone was doing because you were in that growth phase, and every single thing mattered to you in a very specific kind of way.

1:11:41Nilay Patel:You're in a much different role now, right? You're operating two brands. You're managing this big cultural integration. How are you thinking about yourself and the character you're playing now? Because this is a change most people will never experience. It's a really interesting question. And a lot of times, from what I've seen, not very many entrepreneurs who start a business and are entrepreneurial-minded like I am like to operate in that type of a corporate environment, if you will. I don't know if I'm different, unique. I don't know. I'm not really trying to compare myself anywhere, but I just love what I'm doing.

1:12:17You know, how many people get an opportunity to ride the wave of a disruptive technology like Blackstone was into an old category that had been around forever? And then on top of it, you get to manage and take over the best, biggest brand in that industry. So the way I look at it, like, man, this is a once in a lifetime deal. So I'm loving it. This is great fun. And I'm sticking around for a while to keep doing this.

1:12:41Nilay Patel:How much time do you spend with the R &D people inventing new griddles? Because that was a thing. You drew the first one, I think, on a legal pad, right? How much time do you spend in the product weeds? Well, I will spend more as soon as disintegration gets finished. That's a good answer. I mean, this is the challenge, right? You get away from the product as you manage the corporation more. Yeah. So I force myself to stay in there. And that's my personal love. You know, my finance guys are smart. I don't need to spend time with them. operations they'll clean up everything and get it tidy and get it rocking and rolling i don't need to spend as much time there i like the product i love delighting my end user customers coming out with innovative cool ideas and expanding beyond outdoor cooking that's i have way too many ideas in my brain that yeah that makes my board a little nervous at times they want me to stay focused.

1:13:38But yeah, there's a lot to do.

1:13:42Nilay Patel:Yeah. We haven't even talked about the pizza ovens. And now you're saying you're going to get beyond that. You're going to have to come back soon, Roger. All right. Yeah. I enjoy your show. So I'd be happy to come back. Faster than five years. Well, thank you so much for being on Decoder. Happy 4th of July. This is our 4th of July episode. I hope you get some time to go cook outside. That we will do for sure. Thank you so much.

1:14:31Nilay Patel:Stat. This episode was edited by Eileen Felix. Our editorial director is Kevin McShane. The Decoder Music is by Breakmaster Cylinder. We'll see you next time. When I got a new car, I thought my insurance premium would increase and empty my bank account. Like if Fatween won the lottery. I've invested most of my winnings in chicken tenders because they're bomb. But bro, I bought a house and it's sick, bro. I'm thinking the floor is going to be all trampoline, bro. With the helipad on the roof. The contractor said it's structurally unsound. They're just being babies. But switching to Geico saved me hundreds, so my bank account is safe.

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