I came into it thinking we were going to build a business and sell it. Jeremy Andrus full interview with Traeger Grills CEO Jeremy Andrus This is a BETA experience. This is our Fourth of July grill episode. Businesses dont just go up and to the right, year after year. It is to ensure we protect our culture with our lives. The next time we went back to the office, one of our 18-wheel rigs was up in flames. We were three months from buying the business and had decided to outsource our fulfillment distribution, because it just did not scale the way it was configured. While notching a huge win for Skullcandy and its investors, the IPO benchmark turned out to be a bit of an anticlimax for Andrus. If we are creating the right sort of cooking journey, the content and how we deliver it should motivate us to cook more. ACM SIGARCH Computer Architecture News 42 (1), 367-382, 2014. And it's really a very different perspective. Andrus joined the company in 2005 and helped grow the startup, founded by Rick Alden in 2003, from less than $1 million in annual revenues to almost $300 million in sales in 80 countries ahead of taking the company public in 2011. There have only been two times in my career where I have seen consumers turn on a dime. The cultural values we share internally were the foundation of the community. I get it. Is it in the hundreds? I was not classically trained to do anything except find a business I had passion for and figure out how to build it. We think there is massive opportunity in what we call the culinary consumer segment, Andrus said. What makes that question timely? That was the joy that I was hearing from Traeger owners, and I wanted us to be about the experience of making them great, democratizing cooking so they could have that moment without going to culinary school. The chip manufacturing industry is highly consolidated and the pandemic just accelerated digital adoption so rapidly. I am the CEO and very actively involved. That has all changed, so we have been diversifying outside of China for a few years now. I remember when the lead director from AEA, James Ho, came out to visit and said, I got to know you at a conference. I think who you partner with really matters. We bought the business a few months later. It seems like a coin flip every time. And if so, what is it?" Are you on the same curve? I look back and realize how little I knew then. I would say it is not one of those things, it is all of those things. On the pellet side specifically, we do not really fluctuate with the cost of wood. Its insane. I will give you an example. Angel, Oregon, and grown by two generations of the Traeger family into a brand that, according to Andrus, had a little-recognized but highly passionate following. I have seen some tough stories and tough outcomes for the operators who came in and said, We are going to take a big swing to generate wealth for our families. As the financial partner you have a portfolio of risk, as an operator you have a portfolio of one. You launch a version of your app, and the next month you are doing it again. The stock event will mark the second time CEO Jeremy Andrus, a BYU and Harvard Business School grad, has helmed a Utah-based company into the public markets. With Traeger, we wanted to preserve this heritage of being the original wood pellet grill and the heritage of cooking with wood, which has been around for thousands of years. I cant imagine you have ever had any weird app store issues, but that would be amazing if you did. We always step back and say, Before we talk about monetization, are we building a better cooking journey? But we wanted to use technology to make the experience better, to make people better at it, and to make the journey of cooking a more enjoyable one. That model is a hard one right now. Jeremy Andrus is a global superstar and one of the wealthiest persons on the planet. So where do we start? Right, but youre saying, I love this company.. It is timely because it feels like over the last 90 days or so, we are hitting our stride. It is a hard moment in time to sell things. Well, most of them are bad. The funds I have partnered with are incredible, and we have actually become very good friends. I believed there was a business to be built and I saw all sorts of opportunities. It obviously worked out for you and you found a higher calling, but do you think its generally a good model? We have talked about a lot of things: changing the company culture, deciding to do private equity, and deciding to invest in Traeger. Running public companies is hard; it is a lot more fun when everything is going up and to the right. I said, I never need to have another job. It was also bigger than I was looking for. The lifetime value of our consumer is more than that person. At the time it was a $9 million brand business, a great product, and a great brand. I make decisions quickly. Luggage, which is like this boring, Steady Eddie category, is up 50 percent.. And so, as I think about what's next, and how technology informs where we're going, we're always aware of what our competitors are doing, but we never look at them and say, "That is the aspiration. I think it usually works out for the PE investors. Are you competing for older process nodes? We are just taking the sawdust that comes out of the operation, so it did not affect the product cost much. Of course, there is a component of the experience and the product that naturally does that. And the company appears to be doing just that while showing a knack for leveraging social media tools, and its own enthusiastic customer base, in building an actively engaged group of devotees. Half of the investors brought to my memory a quote which said I would never run a public company again. I had never really seen the impact of culture before. They call us, not whoever it is that supplies their internet connectivity. That business was Traeger Grills, which Andrus acquired in 2014 alongside private equity partner Trilantic Capital Partners. We bought the partner out. We are integrating technology and building a patent portfolio we believe makes the cooking experience better. 307 E Grove Creek Ln is a 1899 square foot property with 3 bedrooms and 2 bathrooms. There were some conversations that knocked me off my horse a few times. That really informs how I think. So the pandemic made it difficult. When you do that, others gravitate towards that and want to do the same for themselves. The cost of transportation did. If we were trying to do this 10 years ago, it wouldn't have worked because the technology wasnt yet there. There is no question that we are thinking a lot more about efficiency of inventory than ever, because we sit on a lot. We had the CTO of John Deere on the show and he was like, John Deere now employs more software engineers than [mechanical design] engineers, which to me is just staggering. Jeremy Andrus:Traeger is an interesting one. Andrus:I'm really passionate about brands that have heritage. Jeremy Andrus - Biography - MarketScreener.com Then there is a content piece of it, which has been an internal debate. How many Ohio House Republicans back controversial Its consumer technology. Jeremy, this was a great conversation. Then you get into the spring and see this about-face, remarkable shift from consumers buying things to consumers buying experiences. Decoder is only a year old, but weve decided a Decoder tradition is that every summer, were going to do an episode about the outdoor grill industry, which is gigantic and growing. Can we get some inventory moving? They said, We are heavy on everything, we just do not have space for it. You are battling absolute warehouse capacity. The company filed paperwork with the U.S. Traeger has filed to trade on the New York Stock Exchange under the COOK ticker. I realized that human beings do not change that much. Are you a billion-dollar brand? We said we were going to build a new team, and we did. I think culture is important for those two reasons. How do you make sure that all balances out? And you see great founders invest a lot to build something, and it often goes sideways. I said, This is not the industry I was looking for, I have no idea what the product is, I am not a griller. If I would be honest, my wife was the griller in the family at the time. Traeger CEO Jeremy Andrus is photographed at Traeger Grills in Sugar House on Wednesday, Nov. 1, 2017. Theyre using our grills in new ways, cooking ingredients that go into a salad, smoking salts, smoking fruits for their cocktails.. You deposit the cash return. It wasnt, We have to flip this thing fast, it was, Lets do the right thing for this business. That is where value is created. The company had been going on for a couple of decades there. We step back and we ask ourselves, "Is there a better way to do this? That is where we spend our time from a pellet innovation perspective. How big do we think it could be? Do I begrudge the adversity that we are going through and what I am learning from it? Its yes right now. Theyre not going to be a weird shape that no one else can make? This world over the last couple of decades has been built for just-in-time inventory. The company, based in Salt Lake City, is coming off a year that saw sales skyrocket amid pandemic-induced isolation that drove a slew of new interest in home cooking. Eagle Middle School. It seems very hostile in a way. WebWelcome to Vierra Farms of the fertile San Joaquin Valley! Jeremy Andrus is the CEO of Traeger Grills. It seems like the right answer was just firing everyone and starting fresh. It is selling well, and your inventory levels are getting low. Its like you can go from zero to hero, king of the cul-de-sac. Jeremy As long as lead times from when you cut a purchase order to when inventory arrives to the customer remain unpredictable, I think we are living in a world that is going to have to hold onto more inventory than it has the last 10 or 20 years. I look back and say, That should never have worked. There was so much that had to go right, and it did. The pellets are obviously made of sawdust, and there was a huge run on lumber in the middle of this pandemic. I met Traeger as a company when it was a 27-year-old, slow-growing, $70 million brand based in the Pacific Northwest. How do we ensure there's a level of innovation that is actually motivating and inspiring to the consumer? I dont know that we anticipated how much it would create. Read More Contact Jeremy Andrus's Phone Number and Email Last Update 3/8/2023 12:45 AM There is too much inertia in this culture. Just having capital and being methodical doesnt get you there. That does not work perfectly every time; there is no perfect code. Andrus:One of the things I learned painfully as CEO of Skullcandy was that when you benchmark against your competition, you're eventually going to lose, because disruptors are not entrenched competitors. There were moments I said, Boy, if this doesnt break me, then at least it is a good story. Lets say 300 of our 800 people around the world are here. Jeremy Andrus But Beats did all sorts of things right. Is that tradeoff worth it? It was not about the profit and loss or the balance sheet, I felt compelled by the passion. How did you handle it? No. You had been at Skullcandy, which you left after it went public. It is highly evangelical. Why do they do it? Because they trust it when they are cooking food. It costs money to keep the servers going, develop new versions of the app, and make new content, right? I was more of an early-stage startup entrepreneur. That part seems like the key and the difference. Apple is a great model; it is the best hardware from a design perspective and a usability perspective. There is great method, but there is also some synchronicity and luck to connecting with the consumer. The pellets are an important part of this, but we step back and think about the lifetime value of the customer. Ft. 1218 E Cleveland Ave #100, Madera, CA 93638. When I got on the inside, nine years ago this month, there were two things that really fueled me well beyond a private equity lifecycle. We set up sawmills and take the dust that is left over, which we compress to make pellets. Supply chain has become very unpredictable and very expensive. Knox:When you think about the future of Traeger, where do you want to see the business go? So, relative to the size of the opportunity, its small, but it's passionate, and it's connected. When you build your career in startups, you take for granted the fact that culture is built very organically, by the people you hire, how you behave, and how you model your cultural values. WebNearby homes similar to 1218 E Cleveland Ave #59 have recently sold between $70K to $274K at an average of $140 per square foot. Most PE deals come into a company, load it up with debt, use that leverage to slash costs, trim up the company, increase margins, pay back the debt, then flip the company at the end. A lot of millennials are approaching food as an experience more than a function. San Francisco, CA The Federal Reserve Bank of San Francisco has announced the appointments of Jeremy Andrus, president, chief executive officer, and board member of Traeger Grills, and Daniel G. Weiss, co-founder and managing partner of Angeleno Group, to the Banks Economic Advisory Council (EAC). They have a Wi-Fi model, they have a cloud service, all the same costs. We use content that flows in and out of a device, in and out of the cloud, in and out of the grill. I have one, which I bought way before your acquisition. At the end of the day, you have a finite amount of working capital and you cannot deploy it everywhere. At Skullcandy, early on it was about beating the biggest headphone company out there, which was Sony. I have so many because most of them are bad. WebJeremy Andrus Chief Executive Officer and Director Dominic Blosil Chief Financial Officer Jim Hardy Chief Supply Chain Officer Natalie Jenkins House VP, Digital Michael Colston With that said, I think we are getting better at managing it. Terrys House at Community Regional Medical Center in downtown Fresno, CA We are somewhere in between. It depends how well we lead.. By the way, I am halfway done with my journey. How arson led to a culture reboot at Traeger, with CEO Do you think that is generally a good model? We have talked about that a little bit. Honestly, I think it can be a very challenging model. It was scary. If a 20-pound bag of pellets costs $20 and suddenly transportation costs go up very meaningfully, it really impacts margins. We estimate that 307 E Grove Creek Ln The second time was the spring of 22, and that was driven by consumers coming out of a pandemic and the behaviors they had leaned into during it. The bet that we made on Meater is similar to the one we make on Traeger every day. When you put a $150 brisket on your grill, you are not going to use cheap pellets and suboptimize the result. Vierra Farms | Merced County | Los Banos, CA I think of the Decoder audience as every business school student in America. They said, You cannot deposit IRR in the bank. That is something we continue to feel. That is the bar we have to overcome." They are unlike most private equity funds, which are all about IRR, where its not getting a return, but how fast can you get a return?. Tell people what a Traeger grill is. Without a marketing department, there was this small, self-organized community of passionate Traeger owners who really identified themselves with Traeger. SOLD MAR 28, 2023. There are 22 million meat probes sold every year. You also ended up in a lawsuit with one of the founders, whose last name was Traeger, because they had made a grill for a competitor and you had bought the rights to the name. We were actually talking to a large retailer a week ago saying, Hey, we are looking at this model. And as CEO, role number one for me, has nothing to do with product, strategy, supply chain, or finance. I believed there was something meaningful we could build as food became more important to people experientially. Big time. How has the internal culture of Traeger had an impact on the extended community? WebJeremy Andrus joined Traeger Wood Pellet Grills as President & CEO in January, 2014 and acquired the business alongside private equity fund Trilantic Capital Partners in July of that year.