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The US is being gripped by Stanley Cup fever. But the brouhaha has nothing to do with the National Hockey League championship trophy. Instead it is over a 40-ounce water tumbler.
The Stanley Quencher — with its hefty handle and removable straw — has become a viral sensation. The $45 supersize water receptacle has set off fights, a heist, schoolyard bullying and a buying frenzy more typically associated with exclusive sneaker drops. Videos show consumers stampeding stores to get limited-edition versions of the cup and owners flaunting their collections.
For Seattle-based Stanley, which is owned by the privately held HAVI company, the thirst for the Quencher has been a boon for sales. The brand is reportedly projected to make $750mn in revenues in 2023, a 10-fold increase from the $73mn the brand pulled in 2019.
But its success has left shareholders of Texas-based Yeti in the cold. Shares in the maker of high-end coolers and insulated mugs are down 15 per cent since late December to trade at $45 a piece. At its peak in 2021, the stock was worth nearly $108 and the company boasted a market capitalization of $9.4bn.
During the pandemic sales received a big boost as people sought to adopt more outdoor lifestyles. But the company struggled to hang on to the momentum once people made their post pandemic return to the office. A recent voluntary recall on some of its products also proved to be costly. Valuations have taken a dive, with the shares now on 17 times forward earnings compared to its five-year average of around 25.
The worries are understandable. Drinkware accounts for about 60 per cent of Yeti’s sales in the first nine months of 2023. Yet an argument can be made that Stanley’s rise has not come at the expense of Yeti’s growth.
Thanks to social media, the Quencher was able to break into a demographic that was previously untapped — non-outdoorsy women and teen girls. While both Yeti and Stanley’s trademark insulated water bottles have long been a mainstay for camping trips, the Quencher is seen as an everyday, all-day item. Its devotees treat it as an accessory and buy different colours to go with their outfits.
Tellingly, drinkware sales at Yeti rose 6 per cent year on year in its most recent quarter. The market for insulated water cups is big enough to be filled by both Yeti and Stanley.
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