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1Mby1M Incubation Radar 2011: GrillGrate, Cartersville, Georgia

Posted on Monday, Jan 10th 2011

The 1M/1M Incubation Radar, part of my global initiative that aims to help a million entrepreneurs reach a million dollars in annual revenue by 2020, starts 2011 with GrillGrate, which makes modular plates with a raised rail surface to use on top of grills, making it easier to cook and sear food without burning it or drying it out.

The Georgia-based company was founded in 2007 by Brad Barrett, who found the design for the grate sitting on a shelf in a friend’s company. It was originally designed for an electric grill 15 years ago. He added the GrateTool, a spatula, and other aspects after experimenting with it on outdoor grills. Barrett has spent half of his career in corporate sales and marketing roles and the other half in start-ups. He was exploring several technologies to build business around for a former investor who owns several companies. His job was to spot and nurture new technologies to possibly spin off into new business. The GrillGrate was in Barrett’s incubator but did not fit the companies’ mix. He secured rights to it with the help of his former investor and mentor.

The market is the installed base of gas and charcoal grills in industrialized countries that have a high percentage of out door grills. In the United States, 80 million homes own one grill. In comparison, 1.7 billion households in the world own an oven. The top target segments are backyard grill buyers, first in the United States, then in Australia, Brazil, South Africa, and Europe; OEMs; oven owners; and restaurants and caterers The company started with ‘rabid’ grillers, the enthusiastic core of the market. They attended BBQ competitions, met key players, and let them sample the product. Success here led Barrett to industry associations and other core grillers.

The company’s main product is the GrillGrate Kit, which includes two interlocking raised rail panels and the GrateTool, a specially designed spatula to work with the grate, for $39.99. The company is also developing a broiler pan for indoor use in an oven.

According to Barrett, the outdoor grill industry has been strong for the past 20 years and continues to be strong as people cook more at home. But even as there are many grilling gadgets, the grill surface itself has attracted little attention. Barrett wants to show that the grill surface itself is the most important part of a grill (not gas vs. charcoal) and that an improved grill surface will result in better-tasting and healthier grilled foods.

The company was bootstrapped for the first two years. In January 2010, they took $250,000 in angel funding. There is no specific plan for more funding at this point, but an ideal investor might be an oven manufacturer. The ideal investor for the second stage is either an equity firm or an OEM that may want to brand and distribute either the oven product or the grill product. Year-to-date revenues as of August 2010 were $400,000. Barrett says that GrillGrate has 7,000 customers (5,000 in 2010) and Web traffic of 200 visitors a day. There are about 100 orders per week when GrillGrate is not running ads on TV and 300–400 orders per week when running a $10,000 budget of informercials per week.

Barrett’s growth strategy is to continue e-commerce and direct response TV (DRTV) in the 2010 holiday season and the winter and spring of 2011. He will partner with a high-end OEM (Big Green Egg) to sell through latter’s distribution of independent retailers. He also aims to “water the seeds that have been planted and mobilize our 6,000 customers for their referrals, gift purchases, and user-generated content.” He also recognizes that gorilla PR and social media will be critical and is looking for interns for this role.

There is no exit strategy at this point. Ideally, says Barrett, he wants grow a profitable business that pays its employees fairly and in which they have fun supporting customers. He also wants to grow into the oven segment, caterers, and restaurants. He would also love a deal with Weber, an iconic brand. He met with Weber CEO Jim Stephen last year to discuss their name on GrillGrate’s oven product but says that Weber doesn’t do partnerships, and GrillGrate is too young for an acquisition.

GrillGrate presented at the 1M/1M roundtable on September 23, 2010. Sramana and Brad discussed how Brad might be able to do his first $1 million year by taking advantage of the upcoming holiday season. What is working well for Brad is a combination of television infomercials and e-commerce. Brad has had some success in working with retailers as well, but Sramana advised him to be careful about cash flow management. Having a solid holiday season requires balancing the inventory and marketing budgets, and getting in a complex situation with inventory being stuck in the retail channels with bad terms is always a kiss of death. Sramana advised Brad to focus more on organic search.

This segment is a part in the series : 1Mby1M Incubation Radar 2011

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I took Sramana's advice and went organic for the last quarter of 2010- the gift season. Repeat orders and gift orders exceeded expectations resulting in 3 solidly profitable months with nearly no marketing expense beyond some Facebook advertising. Also following advice on being careful with retail distribution judging every deal on cashflow first, margin second. Thanks Sramana! We're excited about 2011 and breaking the $1million sales mark.

Brad Barrett Tuesday, January 11, 2011 at 5:25 AM PT

Awesome, Brad! Good to know.

Sramana Mitra Tuesday, January 11, 2011 at 9:15 AM PT