Jeremy Andrus Found Success With Skullcandy. Now He Hopes To Do It Again With Traeger Grills.

Photo courtesy of Traeger

Traeger's Jeremy Andrus

Jeremy Andrus joined Skullcandy in 2005 when it was selling less than $1 million worth of headphones. He led the Park City, Utah-based company to nearly $300 million in a sales and a hot initial public offering. As competition heated up in the headphone space, however, the firm’s stock price slumped. In 2013 he left as CEO to become an entrepreneur-in-residence at Solamere Capital, the investment firm cofounded by Tagg Romney, Mitt Romney's eldest son. Now Andrus, 46, is back with another consumer-products company that he thinks has more potential than Skullcandy did: Traeger Pellet Grills. A wood pellet grill pushes wood pellets into a burn pot that indirectly heats the grill surface at a temperature you control. Think outdoor convection smoker rather than a simple charcoal or gas grill. Traeger's grills sell from $299 for a tabletop grill to $1,999 for its highest-end Timberline that you can control with your phone; it also sells the pellets in flavors like hickory barbecue and mesquite at $18.99 for a 20-pound bag.

The company was founded in 1987 by Joe Traeger, whose family owned an Oregon heating company. Andrus joined Traeger in 2014, and acquired the business in conjunction with private-equity firm Trilantic Capital Partners. Today, Traeger's majority shareholder is private-equity giant AEA Investors, and it also has investment from the Ontario Teachers’ Pension Plan. Andrus says the Salt Lake City-based company has more than $300 million in sales and is growing rapidly. In an interview at FORBES’ Jersey City offices that has been edited and condensed, Andrus spoke about why he believes grilling is a market ready for innovation and what he sees in the Traeger brand.

Amy Feldman: How did you hear about Traeger?

Jeremy Andrus: Trilantic found it and called me and I said, “I’ve never heard of it, and I have no interest whatsoever.” They called me back four months later, and said, “Can we talk again?” It was such a boring category that hadn’t evolved. No one had innovated. My first trip to Oregon to do due diligence, I said, “This is a gem, this is an unbelievable gem.” I looked at 40 or 50 consumer product opportunities, and none intrigued me the way that Traeger did when I dug into it.

Feldman: What did you see in Traeger?

Andrus: Grilling is a big industry. It hadn’t innovated since the 1970s. The last innovation was the gas grill. Now I can pick up my iPhone, which is connected to the cloud, and my Timberline grill is connected to the cloud, and I can touch base with my brisket on my mountain ride. My grandmother who is 96 years old loves her Traeger grill, and flips out her iPhone to show photos of you-can’t-believe-I-cooked-this-last-week food. We are creating an experience, and that is what great consumer product companies do.

Feldman: How big is the grilling industry?

Andrus: In the U.S. it’s about $5 billion, including grills, fuel, accessories. When we found Traeger, I couldn’t believe there was a brand I hadn’t heard of that people loved so much. This was over four years ago, and it was about $70 million in sales, mostly in the Pacific Northwest.

Feldman: How could it be under the radar at that size?

Andrus: Joe Traeger was a product inventor not a marketing guy. The marketing strategy went like this: Someone turned their grill on, and their neighbor leaned over the fence. Then they’d do an eight-hour pork shoulder cook, and everyone was talking about it. Our investment thesis was that if we can scale this cult called Traeger there is a massive global opportunity.

Feldman: Was it for sale at that point, or did you have to convince him to sell?

Andrus: We originally were able to make a minority investment in the business. Joe Traeger had sold it a few years before to someone else, and was no longer involved with the business. I coinvested with Trilantic, and wrote a sizeable check alongside them. When you go into a business with that much history, there are bodies buried everywhere. It was a hot mess.

Feldman: What was wrong with it?

Andrus: There was no budgeting or planning process. There was no strategy. I had never been in an environment that was so operationally dysfunctional. My first trade show happened two and a-half weeks into my time at Traeger. I showed up with my marketing VP, his first day on the job. I’ve got a bruise on my chest from retailers poking me and telling how bad we were. We had two people with cellphones and laptops managing 1,000 accounts. We had quality issues with the product. We had 42 company stores that were undercutting dealers. We were selling the same product in Costco at a 30% discount to specialty retailers. There was all this channel conflict. It was an interesting dichotomy between consumers who loved us and channel partners who hated us. The original strategy was to grow from 42 stores to 300 stores. As soon as we bought the business, I shut them all down.

Feldman: Sounds like a mess.

Andrus: I’ll give you an example that highlights the toxic culture. At Traeger we had this very 1980s-esque supply chain. We owned warehouses and 18-wheeler rigs and forklifts and there was no way to scale that business. As a startup guy, I had not been through the process of letting people go before. So we stood in front of the warehouse team and articulated the strategy as honestly and transparently as we could, and we let them know we would be shutting the warehouse down and their jobs would go away. We gave options, including that shipping department employees could be hired by our new distribution partner UPS, and paid generous severance. Next time I drove up to the office with my executive team, it was 7:30 in the morning, and there was this unbelievable sight of policemen and an 18-wheel rig on fire. I later learned that I had the nickname Ocho because I would be the eighth executive fired from this company by this majority owner. I ultimately outlasted them by buying the business. You can fix strategy and operations, but the only way to fix culture is to start over.

">Photo courtesy of Traeger

Traeger's Jeremy Andrus

Jeremy Andrus joined Skullcandy in 2005 when it was selling less than $1 million worth of headphones. He led the Park City, Utah-based company to nearly $300 million in a sales and a hot initial public offering. As competition heated up in the headphone space, however, the firm’s stock price slumped. In 2013 he left as CEO to become an entrepreneur-in-residence at Solamere Capital, the investment firm cofounded by Tagg Romney, Mitt Romney's eldest son. Now Andrus, 46, is back with another consumer-products company that he thinks has more potential than Skullcandy did: Traeger Pellet Grills. A wood pellet grill pushes wood pellets into a burn pot that indirectly heats the grill surface at a temperature you control. Think outdoor convection smoker rather than a simple charcoal or gas grill. Traeger's grills sell from $299 for a tabletop grill to $1,999 for its highest-end Timberline that you can control with your phone; it also sells the pellets in flavors like hickory barbecue and mesquite at $18.99 for a 20-pound bag.

The company was founded in 1987 by Joe Traeger, whose family owned an Oregon heating company. Andrus joined Traeger in 2014, and acquired the business in conjunction with private-equity firm Trilantic Capital Partners. Today, Traeger's majority shareholder is private-equity giant AEA Investors, and it also has investment from the Ontario Teachers’ Pension Plan. Andrus says the Salt Lake City-based company has more than $300 million in sales and is growing rapidly. In an interview at FORBES’ Jersey City offices that has been edited and condensed, Andrus spoke about why he believes grilling is a market ready for innovation and what he sees in the Traeger brand.

Amy Feldman: How did you hear about Traeger?

Jeremy Andrus: Trilantic found it and called me and I said, “I’ve never heard of it, and I have no interest whatsoever.” They called me back four months later, and said, “Can we talk again?” It was such a boring category that hadn’t evolved. No one had innovated. My first trip to Oregon to do due diligence, I said, “This is a gem, this is an unbelievable gem.” I looked at 40 or 50 consumer product opportunities, and none intrigued me the way that Traeger did when I dug into it.

Feldman: What did you see in Traeger?

Andrus: Grilling is a big industry. It hadn’t innovated since the 1970s. The last innovation was the gas grill. Now I can pick up my iPhone, which is connected to the cloud, and my Timberline grill is connected to the cloud, and I can touch base with my brisket on my mountain ride. My grandmother who is 96 years old loves her Traeger grill, and flips out her iPhone to show photos of you-can’t-believe-I-cooked-this-last-week food. We are creating an experience, and that is what great consumer product companies do.

Feldman: How big is the grilling industry?

Andrus: In the U.S. it’s about $5 billion, including grills, fuel, accessories. When we found Traeger, I couldn’t believe there was a brand I hadn’t heard of that people loved so much. This was over four years ago, and it was about $70 million in sales, mostly in the Pacific Northwest.

Feldman: How could it be under the radar at that size?

Andrus: Joe Traeger was a product inventor not a marketing guy. The marketing strategy went like this: Someone turned their grill on, and their neighbor leaned over the fence. Then they’d do an eight-hour pork shoulder cook, and everyone was talking about it. Our investment thesis was that if we can scale this cult called Traeger there is a massive global opportunity.

Feldman: Was it for sale at that point, or did you have to convince him to sell?

Andrus: We originally were able to make a minority investment in the business. Joe Traeger had sold it a few years before to someone else, and was no longer involved with the business. I coinvested with Trilantic, and wrote a sizeable check alongside them. When you go into a business with that much history, there are bodies buried everywhere. It was a hot mess.

Feldman: What was wrong with it?

Andrus: There was no budgeting or planning process. There was no strategy. I had never been in an environment that was so operationally dysfunctional. My first trade show happened two and a-half weeks into my time at Traeger. I showed up with my marketing VP, his first day on the job. I’ve got a bruise on my chest from retailers poking me and telling how bad we were. We had two people with cellphones and laptops managing 1,000 accounts. We had quality issues with the product. We had 42 company stores that were undercutting dealers. We were selling the same product in Costco at a 30% discount to specialty retailers. There was all this channel conflict. It was an interesting dichotomy between consumers who loved us and channel partners who hated us. The original strategy was to grow from 42 stores to 300 stores. As soon as we bought the business, I shut them all down.

Feldman: Sounds like a mess.

Andrus: I’ll give you an example that highlights the toxic culture. At Traeger we had this very 1980s-esque supply chain. We owned warehouses and 18-wheeler rigs and forklifts and there was no way to scale that business. As a startup guy, I had not been through the process of letting people go before. So we stood in front of the warehouse team and articulated the strategy as honestly and transparently as we could, and we let them know we would be shutting the warehouse down and their jobs would go away. We gave options, including that shipping department employees could be hired by our new distribution partner UPS, and paid generous severance. Next time I drove up to the office with my executive team, it was 7:30 in the morning, and there was this unbelievable sight of policemen and an 18-wheel rig on fire. I later learned that I had the nickname Ocho because I would be the eighth executive fired from this company by this majority owner. I ultimately outlasted them by buying the business. You can fix strategy and operations, but the only way to fix culture is to start over.

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