Kitchenware giant Instant Brands declared bankruptcy this week as demand for appliances has fallen like a collapsed soufflé.

Instant Brands,Ov Finance maker of the Instant Pot, filed for Chapter 11 protection on Monday in the Southern District of Texas. The private company, which also makes Pyrex glassware and CorningWare, listed between $500 million and $1 billion in liabilities and assets.

Instant Brands will continue operating as usual during the bankruptcy process with help from $132.5 million in new financing. However, the company now finds itself in a much different financial position than it enjoyed almost 15 years ago. 

A "tightening of credit terms and higher interest rates" has weakened Instant Brands' finances, CEO Ben Gadbois said in a statement.

Much of Instant Brands' success came by selling its electric pressure cooker, which has become a staple in kitchens nationwide. Engineer Robert Wang invented the Instant Pot in 2009 and the product became wildly popular soon after. The appliance is known for being sturdy and versatile enough to roast a chicken or steam dumplings. 

Diehard fans notwithstanding, consumer demand for the pressure cooker appears to have lost steam over the years. An Eater article in 2022 asked the question, "Is the Instant Pot's star finally fading?" 

Sales in the electronic multicooker product category have fallen 50% in the past three years, the Verge reported.

Gadbois told the Wall Street Journal in March that "we believe that the Instant Pot product is going to be around for a long, long, long time," but that "no product stays at a phenom level forever."

Seventh straight quarterly decline

Instant Brands' sales fell about 22% during the first quarter of 2023, compared to a year ago, according to S&P Global data. That marks the seventh straight quarter of sales declines for the company, S&P said in its recent credit rating report.

"After successfully navigating the COVID-19 pandemic and the global supply chain crisis, we continue to face additional global macroeconomic and geopolitical challenges that have affected our business," Gadbois said Monday. 

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Instant Brands finished March with about $95 million in cash, S&P Global said. The company has about $510 million in bank debt on its books and "it may take several years for Instant Brands' profitability to recover" at its current pace, according to the S&P report. 

"Instant Brands' performance continues to suffer from depressed consumer demand due to lower discretionary spending on home products, lower retailer replenishment orders for its categories, and some retailers moving to domestic fulfillment from direct import," S&P analysts wrote in the report. 

The bankruptcy comes three months after the Federal Trade Commission ordered Instant Brands to stop falsely claiming its Pyrex products were made in the U.S. Many Pyrex cups are made in China, federal regulators have said. 

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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