Breaking News: BioLite Acquires Goal Zero
- colin7931
- 4 days ago
- 35 min read
Today Colin and Outdoor Industry Insider Eoin Comerford are joined by Jonathan Cedar, BioLite's founder and CEO to discuss the breaking news that BioLite is acquiring Goal Zero.
Jonathan talks about the background of BioLite and why this deal makes sense particularly due to the alignment in mission and product offerings between the two companies.
Lastly during their conversation news breaks about the roll back of the more retaliatory tariffs that had been announced. So we get breaking news inside of breaking news!
Check out hundreds of wildly cool products by visiting and shopping at Garage Grown Gear!
Register For Obōz Trails For Tree Challenge at trailsfortrees.com.
Sign up for NEWS FROM THE FRONT, Rock Fight's weekly newsletter by heading to www.rockfight.co and clicking Join The Mailing List.
Please follow and subscribe to The Rock Fight and give us a 5 star rating and a written review wherever you get your podcasts.
Want to pick a fight with The Rock Fight? Send your feedback, questions, and comments to myrockfight@gmail.com.
Click Here To Listen On Your Favorite Podcast App
Or Just Click The Player Below!
Episode Transcript:
Colin True
00:00:00.960 - 00:00:51.678
Welcome to the Rock Fight, where we speak our truth, slay sacred cows, and sometimes agree to disagree. This is an outdoor podcast that aims for the head. I'm Colin True and today we are breaking news.
Biolite has acquired Goal Zero and we're talking about it with biolite's CEO.
But before we get to that, come back to the Rock Fight this Wednesday to hear our normal Monday crew of producer Dave, Owen Comerford and myself hit some outdoor industry topics.
Chances are high that tariffs will be mentioned and right now it's time for you to subscribe to both the Rock Fight and and also to Open Container, the newest Rock Fight podcast that is hosted by outdoor industry legend Doug Schnitzbahn.
All you need to do is tap the Follow button on whatever podcast app you are listening to us on and then look up Open Container, do the same thing there, and then subscribe to our weekly newsletter by heading to rockfight.co and clicking join the Mailing list. Stick around. We'll be right back.
Chris DeMakes
00:00:51.734 - 00:00:55.770
Welcome to the Rock Fight. Rock Fight. Rock Fight.
Colin True
00:00:58.420 - 00:04:55.170
Today's episode of the Rock Fight is presented by Oboz, who is helping us ask the question how do I love hiking? Let me count the ways. Number one on today's list of how I love hiking. Fresh air because nothing says clean living like inhaling tree farts.
And also number two, cardio without a treadmill and without Karen talking too loud on her Bluetooth next to you on the treadmill. Come on, you don't get that in the outdoors and you're going hiking. Number three, it just makes life better. Period.
Even when your boots are soaked, your knees hurt, and your snacks are gone, it's still worth it. And number four, water tastes amazing when you're thirsty, almost like it's the original energy drink.
And lastly, number five, because of Oboz Trails for Trees Challenge, during the month of April, Oboz will plant a tree for every mile you hike. Register for the challenge by heading to trailsfortrees.com and you'll receive chances to win weekly prizes from Oboz and their Challenge partners.
Registration is free and open now at Trails for this hiking appreciation moment is brought to you by Oboz of Bozeman, Montana, maker of the Katabatic collection that includes the Katabatic LT and the Katabatic wind. Check out the full katabatic footwear collection@obozfootwear.com today. All right, folks, let's talk about a game changer.
Literally, if you're a brand or retailer in the outdoor industry, think of endeavor like the ultimate power up for your sales game.
This platform is designed to level up retail associates, giving them the XP they need to master your gear, sell more, and rack up rewards along the way. It's like a cheat code for better sales, making sure your products don't just sit on the shelves but actually move. Why is this valuable?
Well trained and motivated staff sell way more gear.
Brands using endeavor, like K2 Sports and Smith Optics have seen better sell through stronger brand engagement and real data insights on what works and here's where Endeavor gets really interesting. It's gamified. That means learning about products and earning incentives feels fun and not like homework.
But there's also a couple of other power ups you'll want to consider. First is their partnership with locally, so online shoppers can instantly find a knowledgeable staffer in a nearby store ready to seal the deal.
Second is an option known as freemium where you can launch brand assets, push newsfeed posts and coordinate rep clinics.
And with Endeavor's pay as you go plans, you can take sales contests, education campaigns, or collect staff insights collection programs all out for a test drive. The bottom line?
If your retail game is feeling like it's stuck in easy mode, Endeavor is the upgrade you need to unlock next level sales, max out your team's knowledge and beat the boss when it comes to customer experience. Head to Endeavor. That's End VR IO to learn more today. Happy Monday everyone. And here we are back again with more breaking news.
Because this morning, news has dropped that biolite, who is the quote creator of affordable and dur products that harness energy to cook, charge and light our daily lives, is acquiring Goal Zero, the brand that has made it their mission to provide the most innovative solar products to the market. End quote. Look, it's pretty easy to see the synergy between these two brands and how they will fit in with one another.
But there are some things to consider that are pretty interesting. For one, BioLite is a good bit smaller than Goal Zero's outgoing owner, NRG, who is roughly a $28 billion company.
And BioLite and Goal Zero are about the same size, so how will that shake out? Plus, there's a typ overlap in how a brand is structured and how to resolve redundancies in that structure.
And lastly, of course, there's our current global situation and the chaos being brought to the fore by the Trump administration's tariff plans.
This is why Rock Fights Consiglieri and outdoor industry insider Owen Comerford and I were excited to have the opportunity to speak with Jonathan Seder, the founder and CEO of BioLite. Ahead of today's announcement, Jonathan sat down with us to touch on each of those topics and a whole lot more.
So welcome back to the Rock Flight, where today it's all about biolite's acquisition of Goal Zero with Jonathan Seder.
Eoin Comerford
00:04:58.230 - 00:04:58.622
All right.
Colin True
00:04:58.646 - 00:05:07.614
Joining myself in outdoor industry insider and concealer to the rock fight, Owen Comerford today is the founder and CEO of biolite, Jonathan Seder. Welcome to the show, Jonathan.
Jonathan Cedar
00:05:07.662 - 00:05:09.214
Thank you, guys. Good to see you.
Colin True
00:05:09.302 - 00:05:21.602
We were going to talk about the fact that you're, you know, your company's acquiring Goal Zero, but basically everything going on right now, I want to ask for a friend. Can you recommend a portable power bank, maybe solar panel in case the apocalypse hits?
Jonathan Cedar
00:05:21.666 - 00:05:33.458
Apocalypse? Yeah. There's these two amazing brands called Biolite and Goal Zero. And we make everything to power your life off the grid.
So, you know, hit us up, let's.
Colin True
00:05:33.474 - 00:05:39.410
Get it down before the tariffs affect everything too much. You know, the stuff is ready. Start building your bunkers, everybody.
Jonathan Cedar
00:05:39.570 - 00:05:42.990
That's right, that's right. Now's a good time to stock up.
Colin True
00:05:44.090 - 00:05:58.530
Well, let's not beat around the bush too much here. Like. So you are here today because the brand you founded, biolite, is acquiring Goal Zero. Start with the big picture.
Maybe, you know, maybe you don't know the Rock Flight. We know Biolite well. We, we named you one of our top five accessory brands.
Jonathan Cedar
00:05:59.350 - 00:06:00.654
Super psyched about that.
Colin True
00:06:00.742 - 00:06:03.294
Right? We got. Have you gotten your trophy yet? Has it arrived?
Jonathan Cedar
00:06:03.422 - 00:06:07.166
Oh, I don't think so. No. I'm psyched to see that. It might be, it might be at the office.
Colin True
00:06:07.318 - 00:06:11.454
They're coming in with our five timers robes. We're going to get them all at the same time, I think. But the.
Eoin Comerford
00:06:11.622 - 00:06:18.664
Yeah, I wouldn't hold your breath. But yes, it could happen. So one of these years, if any.
Colin True
00:06:18.672 - 00:06:31.096
Of our listeners have a toddler that wants to make some statues for our top five winners, we can make that happen. But for listeners who may not be available, can you give us a little background on the Biolite story? How did it all come about for you?
Jonathan Cedar
00:06:31.248 - 00:09:22.998
Yeah, for sure. So Biolite is an off grid energy company looking to serve people wherever they might find themselves. Off grid.
So the company actually has a relatively unique model that we call parallel innovation, where we invest in core energy access enabling technologies, clean cooking, solar power, rechargeable LED lighting. And we make products for campers like ourselves, which we sell through retailers like REI or our own website or Amazon.
Then we also make those products for folks who live beyond the grid in their daily life in developing countries, where in sub Saharan Africa we have served over 15 million people with first access to energy.
Most of those folks are small holder farmers who live beyond the reach of the grid and use our products to light their homes at night, to listen to the radio, to cook meals without as much smoke pollution in their homes.
And the reason that we built the company around this parallel innovation model is we knew that serving people in, you know, low income countries was not going to be a layup of a business model. And it was going to take us some real time and investment and iteration.
And by jointly commercializing these technologies in more developed, mature, predictable, higher margin markets, it really gave us the staying power as a company to keep refining our business model in developing countries to the point that it could really stand on its own two feet in perpetuity. And so we got our start in 2011 as a brand.
And for the first five or six years it was really only recreation markets were kind of producing revenue for the business. And by about 2016 we started to find the formula in our sub Saharan African markets.
And by 2021, our Africa markets actually became the larger piece of the business relative to our recreation markets.
And you know, it's not that we're optimizing for one to be bigger or smaller than the other, but I think it's a great indicator of, you know, what that time, you know, that 10 years it took us of investment to get that model right, what that was really worth. Because now we have a business that can repeatedly deliver this social and environmental impact in these low income markets.
And it is because we had that 10 years of incubation that we were able to get to that kind of scale where it really works without requiring sort of philanthropic or subsidized inputs.
Colin True
00:09:23.174 - 00:09:26.850
So not just a headlamp brand, you know.
Jonathan Cedar
00:09:27.550 - 00:09:31.890
No, not just a headlamp brand. Although I do think our headlamps are red.
Eoin Comerford
00:09:32.990 - 00:09:57.220
I mean, I remember the first time seeing the stove, which I think was the original product. You know, burn some wood, generate some energy, charge your phone. And I thought that was the bylight story.
I've got to tell you, the whole sub Saharan African aspect was new to me. So either I'm not paying attention or your brand people need to do some more work to get that story out.
Jonathan Cedar
00:10:00.800 - 00:12:17.004
You know, I'll tell you, it has been hard to tell that story. I mean, look, I've. I am an engineer by training. I have certainly been accused of running the company like an engineer as opposed to a marketer.
So, so, so to your point, you know, I think we are oftentimes very heads down in delivering the results and a little bit less focused in terms of how much credit we get for it. But I also think it's been a hard story to tell. Right. It's complicated, right? We are not a philanthropy. We're not a Tom's Buy one, give one.
We are trying to build these economically commercially self sustaining models of social and environmental impact. And that is just a nuanced, complicated story.
There's as much financial innovation inside of our business for how do you actually make these products affordable and create loans that you can pay down products over time? There's as much financial innovation focus in our business as there is product innovation.
And, and when you're just coming to REI to buy a headlamp, which, hell yeah, like, that's a great thing to do, that's what I want to do with my spare time too. I don't know that that's necessarily the first story you want to hear from us.
You want to hear why this headlamp is going to reliably take you on the best adventures of your life.
And maybe once you have some extra time and you want to dig in a little bit deeper behind the scenes on the brand, that's when you start to learn more about the impact activities that sit at the core of our reason to be.
But yeah, we've, you know, to your point, I think we've had a hard time creating as much awareness about our impact work as we have about, you know, just the functional benefits of our, of our recreation market products. And look, at the end of the day, I think that's okay with us, right?
As long as people like our recreation market products and we're generating impact on the Africa side of the business, like our goals are met, but we're constantly trying to work on, like, how can we, how can we make that a more core piece of our identity? Because I do think our users would, you know, take a lot of pride in participating in the brand if they had a deeper awareness of that.
Eoin Comerford
00:12:17.092 - 00:12:23.680
I think so too. And also, by the way, I'm a mechanical engineer, so don't be slamming on mechanical engineers in marketing.
Jonathan Cedar
00:12:25.380 - 00:12:31.692
Don't worry. It was venture capitalists who accused me of thinking like an engineer, so, you know, we can discount their perspectives.
Eoin Comerford
00:12:31.756 - 00:12:34.680
Yeah, well, screw those guys. They don't know what the hell they're talking about.
Jonathan Cedar
00:12:35.040 - 00:12:43.336
We've got some amazing ones in our corner. But yeah, the one who accused me of thinking like an engineer, we don't actually work with. So that's okay.
Eoin Comerford
00:12:43.528 - 00:13:20.738
Thinking like an engineer, that is a compliment. So, hey, no, that's wonderful. And I do think that just because you're not a nonprofit, just doing the work is key.
And actually I think it's more sustainable if you can build a sustainable financial model around it than to be constantly looking for grants and, you know, money from usaid, for example. That would, that would have been tough if that was part of the model.
So, you know, I think it's creating a sustainable financial model actually can have a longer term effect, so. Well, I'm really glad we asked that question.
Jonathan Cedar
00:13:20.874 - 00:13:47.192
Yeah, thank you. I'm glad you guys did too.
And yeah, like that was one of the founding observations that I had is relying on philanthropy, either private or public philanthropy is very unpredictable.
And what businesses really need is the ability to say, hey, come work for my company, you've got a stable job for the next 10 years, come work for my company. I've got a grant that lasts another six months. Not as convincing.
Colin True
00:13:47.336 - 00:13:53.336
All right, so why is Goal Zero fit? Why now? What's the story with you guys in Goal Zero?
Jonathan Cedar
00:13:53.488 - 00:18:50.294
Yeah, so we've admired Goal Zero for a really long time, Goal Zero in our eyes. And I think the industries broadly really kind of created the portable power station and solar generator market certainly in the US if not globally.
Like they were absolutely the first ones to the table, I think as far back as 2009 with sort of, you know, I think 100, 200 watt hour lead acid based power stations and small pieces of solar. And from the very beginning, we've always framed ourselves as an energy company because our camping stoves generate electricity.
We always knew we wanted to move into lighting and we always knew eventually we wanted to move into larger scale power. But that was always sort of at the, you know, the farthest out end of our aspirations.
We did manage to start to put our toes in that pool, you know, maybe starting in like shortly before the pandemic with power banks and then power stations towards the middle of the pandemic years. But Goal Zero has always been the leader in this category in our view. And we've always aspired to be more active in that category.
For us, when we found out that Goal Zero that their previous owners were considering selling the business, we're like, oh my gosh, that really completes our vision.
In addition to that, Goal Zero actually, while I don't think they've been as deeply invested as Biolite has in the humanitarian and lower income segments of the off grid Market. They got their start there too.
Robert Workman, who started the brand, his original observations came out of travel in Sub Saharan Africa and the need for energy access. You started in batteries, we started in cooking, but we started with the same observations.
And so that social mission driven ethos is pretty deeply embedded in their brand in a way that has created a pretty immediate cultural alignment. Even to the point when we put our mission statements side by side. They were awfully similar.
It's just they had served a few tens of thousands of people with, you know, sort of philanthropic style access to energy. Biolite had done 15 million people through more commercial means, but the intention was very, very similar.
And so, you know, that's, that's how we immediately identified them as, as just being totally aligned with where we wanted to go.
And I think when I think about who we are together now, that's what gets me super excited, which is how do we really truly describe the opportunity of energy in the outdoors in a way that is an ecosystem and not individual products.
And I think that's probably the piece that is still the most evolving for users in the market is, okay, that's a lot of power in a Yeti 1500 power station, which is 1.5 kilowatt hours of power storage. What am I actually doing with that? Right. And I think we're now better able to paint that full picture.
Goal Zero, starting last year, I think started to make electric coolers. So essentially portable powered refrigerators like oh, okay, I get it.
Rather than needing to be connected to the ice supply chain and getting to and from a place where I can refill the ice in my cooler. Well now the sun essentially is powering my cooler through this battery. Now I can be off grid longer.
I want to power more area lighting for my campsite. Now I've got a sort of evergreen source to run that.
And so rather than thinking of power as the end objective in and of itself, it's really like how does power create environments of productivity, safety, connectedness, fun?
And that's really the story that we want to be able to tell as a combined organization with Goal Zero really leading on the larger platform power and solar side and refrigeration, and then biolite really being able to fill out that picture with great lighting options, both area lighting and personal lighting like headlamps, as well as, you know, fuel free cooking solutions. Right.
And so now we can, you know, cook, charge, light, refrigerate, power your off grid devices, power your communications devices, and really start to build an environment in the outdoors. That can be as, as productive as your environment in the indoors.
Eoin Comerford
00:18:50.422 - 00:19:29.360
So from my understanding, Go Zero was previously owned by NRG Energy, which is a $28 billion public company, which seems a little odd for what's primarily a backpacking company or an outdoor company. I actually, as part of Moose show, we were owned by Walmart for a number of years.
So I know a little bit about what it's like to be a small fish in a very big pond. Will it be a bit of a shock for Goal Zero to move from that environment to being owned by a very similarly sized company?
Jonathan Cedar
00:19:32.620 - 00:22:52.030
Yes, I think there's elements of that I'm projecting on behalf of my new colleagues from Goal Zero so they can write in and tell me where I got it wrong. But I think there's a lot of benefit to it.
First of all, I want to say I think NRG has been a really, really cool company and a great counterpart in really wanting to make sure that Goal Zero was transferred to a new owner who could really protect the heritage of the brand and give it a great life in a new chapter. So they've been a really good partner.
And I think I'm speculating to a small degree, but they got into this business thinking that, you know, power was going to become more of a mass market residential opportunity, which I think has happened more slowly.
But certainly we see, you know, ways in which, you know, kilowatt scale power is becoming more of a consumer product even in the home as we look at, you know, resiliency applications and backup power and grid buffering. Right. So it's like that was sort of their thesis, I think that matured more slowly out of the outdoor into the mainstream than they wanted to. And I.
My sense is that's part of why they said this was strategically divergent with what was otherwise really an energy company. But again, I'm speculating to some degree on that.
But in terms of the employees, I think one of the opportunities in becoming part of a smaller, scrappier organization is there's very low bureaucracy. We see changes in the market, we can run after them. We don't require just as many layers of corporate bureaucracy.
Even things like the way to sign into our network is lighter weight than what they had.
When you're part of a tens of thousands of person organization, I think the staff has found that really refreshing that some of those structures that are necessary inside of larger organizations really fall away. And it's just about the people in the room making those smartest, fastest decisions that they can and chasing after it. Right.
That's a real benefit to being a small company. The challenge of being a small company is you got to be careful that freedom comes with an understanding that there is no giant safety net under you.
And so you really need to understand the risk profile of the decisions that you make.
And I think just be to one degree more measured because there isn't sort of an endless bank account that can help you sell down inventory over 18 months instead of 6 months if you over buy or things like that. So it's like, I think those are the two sides of it. A lot of freedom and a thinner safety net.
And I don't know, ask us in a year which of those is the better one to have.
But I think in general, for close to 15 years now, Biolite has done really well responsibly managing the freedom that we have as a small private company and still managing to do pretty ambitious things. So I'm expecting that's what the next chapter looks like too.
Eoin Comerford
00:22:53.130 - 00:23:16.760
Speaking of size, if I look at sales of both brands just purely within the outdoor retail industry, I would say Goal Zero is the bigger company of the two by quite a large margin. Now, I don't know about D2C and Sub Saharan Africa and all that other stuff, so I don't know where that factors in.
But can you give us a sense of the relative size between the two companies?
Jonathan Cedar
00:23:17.140 - 00:24:08.908
Yeah, I can't probably reveal hard numbers, but I can give you some proportions.
So biolite and Goal Zero, if you looked at biolite's entire business, Right, So our recreation business and our Africa markets business, and you looked at Goal Zero's entire business, Goal Zero would be a little bit larger than biolite's entire business. Which means Goal Zero is somewhere between, I call it like a little bit more than double the size of biolite's outdoor recreation business.
So to that point, yes, from a purely outdoor REC Market perspective, Goal 0 is the bigger brand, which is awesome. We're super excited about that.
Colin True
00:24:08.964 - 00:24:11.596
Means you won too. Good job. Congratulations.
Jonathan Cedar
00:24:11.788 - 00:25:34.550
I don't think we see it that way. I think we feel like we've been entrusted to be the stewards of something super special.
And we think that it's really, really complementary with who we've been trying to build ourselves into for a really long time.
One of the areas that I'm super excited about though is Goal Zero really hasn't tapped the potential of the developing markets at all, really, just in very small philanthropic ways. And we're already seeing as we were investing into sort of Kilowatt power scale devices for our Africa markets. We're like, oh my gosh.
Now we have this amazing portfolio that our customers in Nigeria and Senegal and Cote d'ivoire and Kenya are super excited to be building into their business. As, you know, small businesses are able to have refrigeration and improve the value of the products that they bring to market.
You know, all kinds of sort of. A lot of the times when you're in that sort of kilowatt scale, it's more about income generation than lifestyle in the African markets.
But, but, you know, we don't just simply see this as a giant, you know, acceleration in our recreation market. Like, we also see this as equally relevant in the global impact markets that we serve.
Eoin Comerford
00:25:36.010 - 00:25:58.762
Then talking about Goal Zero in terms of size and scale in, in talking to people in the industry, they had a great run up through the, you know, the COVID boom into 2021, record sales. And then since then it's been quite a bit tougher. Sales dropped pretty precipitously. Now I think that was the same for most brands.
Jonathan Cedar
00:25:58.826 - 00:25:59.050
Actually.
Eoin Comerford
00:25:59.090 - 00:26:22.640
I don't think it was probably the same for biolite because maybe it slowed your trajectory that it had been upward, but, but it seemed like it did hit Goal Zero a little bit harder than most. How are things going now and has growth returned? And if not, how do you hope to get there?
Jonathan Cedar
00:26:23.020 - 00:32:11.310
Yeah, that's a really fair question. So, yeah, not to sugarcoat it, Goal Zero, like most of us in the industry, including biolite, pandemic hit. We all battened down the hatches.
We said, oh my gosh, this is going to be impossible. And then consumer demand came roaring back. And so we all saw pretty extraordinary growth from 2020 to 2022 where it kind of flattened.
And then everyone gave back a lot starting in late 22 into 23. And then 24 was kind of the, you know, a bit of a trough, right, like where it's kind of flatter to 23.
And so like, I would say that goal zero proportionally went through a pretty similar set of movements as BioLite, maybe a little bit exaggerated, but not, not massively.
And so where they come out in 24 is still meaningfully up from 2019, which is what, what Biolite more or less looked like as well, but also way off the peak of 22 where, where goal zero had maybe some more unique challenges that accelerated the, you know, some of the changes were some of the inventory swings that they took meaning, like swing swings at the plate. Right. Like we're pretty big in 22.
And so that definitely put pressure on it from a corporate lens, from a working capital lens in ways that probably maybe just brought into focus for NRG the ways in which this didn't look the same as other pieces of their business, just in terms of who it was serving, how it got there, its exposure to market trend and stuff like that.
So, like, I don't want to suggest that that stuff didn't take place, but I still think the, the brand still came out of 23, 24 in a place that was meaningfully ahead of where it was in 2019.
And so I think on balance, I would sort of describe that as, as, you know, the wave that, that a lot of us kind of rode through over the last five years.
And so I will say, as we pick up the brand on the backside of that trough, there are questions that we're asking ourselves about we don't want to repeat the patterns of 22 to 23 again. So what does it mean to have a more focused business going forward?
One of the decisions that they had made in, gosh, I don't actually know exactly when this strategy started for them, but you know, to diversify into home markets.
And I think to some respects, like, they did it in a way that maybe came at a little bit of a cost of the outdoor market focus in over the last three, four years, something like that. And I think that's a place where we're coming in with look, Biolite has a diversity of markets as well, right?
Like we serve African markets, we launched backup into the home market.
But we do have a bit more of like a siloed strategy where we don't really, you know, if we're talking to an outdoor recreation consumer, it is with like all focus on that customer. The features on that product are focused on that customer, the marketing, the sales channel, the after sales service.
Like all of that is focused on how do you be the best in outdoor. I think as goal zero, kind of blended that more fluidly inside of their business with home backup.
I think their ability to speak super clearly and nail every last feature for outdoor maybe got softened a little bit and I think they were already tacking back towards, you know, like a real focus on excellence for outdoor by the time that we acquired them. But that is a place where we're going to be more focused, right? Like, we know, we know that the outdoor customer is at the center of our bullseye.
And so, for example, all of our power stations now have IPX ratings, right? Like, that is not something that you need in your home and it is something that you need at the campsite.
And so really trying to just get super sharp on who we serve. And if that means we're a little bit smaller, but we're healthier and we are stickier with that customer, that's a better place for us. We're not.
When you're owned by a $28 billion company, going from 50 million to 60 million is not as exciting. When you're a small brand that really works for us, we don't have to be a billion dollars in five years.
No one is telling us that that's what success looks like.
Success looks like reliably delighting our customer in the recreation market while continuing to turn out impact every single year in the African markets. And as long as we can keep doing that in, you know, self sustaining manner, our ownership and our staff is very, very happy with that.
And, and I think that's maybe that's the difference I would sort of project onto the next chapter is we don't have to shoot the moon. We just have to kick ass for that core customer who believes in us.
And I think that allows us to just move with a lot more intention than if you're trying to become a billion dollar brand in a fairly short number of years.
Colin True
00:32:12.970 - 00:32:22.002
You're listening to Rock Flight radio. My God, is that Fitz's music? You know it is. Get ready for There's a smile on my toes.
FITS!
00:32:22.146 - 00:33:39.670
Woke up this morning feeling so alive Sunshine in my step Making my spirit jive Hope for comfort Rapping me so sweet Dancing on clouds with every beat There's a smile on my toes every single day Cool and warm together in a brilliant play Free range Toe box lets my feet sing Fits is the joy that each new step is deep Heel pocket Hugging me just right Fine gauge merino soft like the moonlight Laughing and skipping Feeling so flat in a happy place with every stride There's a smile on my toes every single day Cool and warm together in a brilliant play Free race Toe box lets my feet sing. Fitz is the joy that each new step brings.
Colin True
00:33:41.050 - 00:34:28.082
That was there's a smile on my toes from Fitz. Cause that's what whole foot comfort looks like. New spring styles are in stores now. Didn't get your orders in. No need to cry. Just send Judy.
You know Judy. Everyone knows Judy. Send Judy an email@customerserviceitsock.com and she'll turn those frowns upside down. Oh, tell your feet that we said hi.
And now back to the show.
So is that Ultimately, what you saw as the opportunity of like layering in Goal Zero with biolite is like that, just that, that kind of mission of like, hey, delighting the customers, providing this, you know, these services and products to, to these kind of core categories, whether it be on the more, you know, in the African side versus just the traditional outdoor side. Now we can do that in an even bigger and better way by adding Coal zero to the mix.
Jonathan Cedar
00:34:28.226 - 00:34:32.802
Yeah. It would have taken us years to engineer the depth of portfolio that they.
Colin True
00:34:32.826 - 00:34:36.594
Have in portable power Classic acquire, don't build. Right.
Jonathan Cedar
00:34:36.762 - 00:35:10.472
Yeah. And not only that, the trust in that brand is amazing.
And we're hoping that we can cross educate biolite customers who maybe weren't as familiar with Goal Zero with the great power offerings there.
And we're hoping that Goal Zero customers, you know, become more aware of the cooking and lighting solutions on the biolite side and that there's, you know, a synergy there.
As you sort of see, like the, the, the vision, the functionality, the reliability that was present for each of these brands individually we expect will have appeal to the other brand's audience.
Colin True
00:35:10.536 - 00:35:11.140
Right.
Jonathan Cedar
00:35:11.600 - 00:35:16.660
And so yeah, that is the upper, that is the opportunity that we see going forward.
Eoin Comerford
00:35:17.850 - 00:35:32.750
Jonathan, you talk about ownership, which I assume you're referring to some of your investors and did they step up to the plate here to help fund this transaction or was this self funded by Bylight itself? How did that work?
Jonathan Cedar
00:35:34.490 - 00:37:21.836
So biolite is venture backed. We're venture backed predominantly by what we would. I think they would describe themselves as impact investors, which is, it's interesting.
I think sometimes as someone less familiar, you might look at an impact investor and say, oh sweet, that means you don't have to have a return. And like, that's, that's not the case. Right.
Like, but what we do need to do is we need to have a real purpose for why we build the businesses that we build. So it's more of an additional criteria as opposed to a relieving of profit criteria.
And those investors have, have supported us, you know, some as long as, you know, I think our first round of investment was 2011. We've done six or seven rounds of investment over the last dozen plus years.
And so we did raise a very small amount of capital concurrently with the Goal Zero transaction and we funded some of it off of our balance sheet as well. But I would sort of describe it as consistent with sort of a long history of engagement with these investors.
It's not like this was sort of the first time biolite has taken on external capital it was more just incremental layering alongside of it and it certainly wasn't.
It was actually the smallest round we've done, but it did sort of lift up our balance sheet a little bit to be more stable as we need more working capital as a business as we inevitably there's unknowns as you acquire a new business. How do we just make sure we're sitting on a stable enough perch to take on something significant?
So there was some, some additional capital infusion, but not a massive amount.
Eoin Comerford
00:37:22.028 - 00:37:39.880
So we have a lot of sales reps that listen to this show or at least a few very vocal ones, we'll put it that way. Do either of the companies currently use a rep model and if so, how will that maybe shift going forward?
Jonathan Cedar
00:37:40.190 - 00:37:58.690
That is a great question. Biolite does currently use a rep model in many segments of our market.
Goal Zero does not use reps at all and I don't yet know the answer to the go forward question on that.
Colin True
00:37:59.390 - 00:38:06.850
I guarantee you there's some biolite reps who there's some missed calls on your phone right now like hey, I can take nod, give me the Goal Zero.
Jonathan Cedar
00:38:07.230 - 00:38:08.450
I could do it for you.
Eoin Comerford
00:38:08.790 - 00:38:20.730
They used to use reps because I remember the rep agency that used to serve for Moose Cho, but I guess they must have just taken it in house at some point. Probably in the last four or five years.
Jonathan Cedar
00:38:21.030 - 00:38:31.662
Yeah, yeah, they took it in house. I don't remember the exact. It was obviously before our ownership, but they took it in house in not too distant past.
Colin True
00:38:31.846 - 00:38:35.690
Yeti's is going to acquire all of it pretty soon. I think there's going to come out.
Eoin Comerford
00:38:36.430 - 00:38:39.990
And just the Yeti power banks. So it makes sense.
Colin True
00:38:40.070 - 00:38:41.030
That's what I'm saying.
Jonathan Cedar
00:38:41.150 - 00:38:42.454
They have my number, I assume.
Colin True
00:38:42.502 - 00:38:46.850
I don't know. I love it. Weird number from Austin. What's going on?
Jonathan Cedar
00:38:47.470 - 00:39:04.582
No, look, we're pretty excited, just to be super clear, we're pretty excited to build the platform that we've acquired. And look, at some point we are a venture backed business so at some point there will have to be some liquidity for our shareholders.
But there's a million different forms that that could take.
Colin True
00:39:04.686 - 00:39:24.242
Well, while we have, you know, the tariffs that were announced last, want to take advantage of having you on the show to talk for a minute about how this will impact both biolite and Goal Zero and what you're doing to address these developments.
You know, just kind of broadly speaking, what will the impact of the announced tariffs as they sit today anyway, based on where you manufacture your products if.
Jonathan Cedar
00:39:24.266 - 00:39:29.906
You took the facts as they are at this moment. Right.
Colin True
00:39:29.978 - 00:39:34.866
Recording on April 9th. April 9th, Pacific, you know.
Jonathan Cedar
00:39:34.938 - 00:39:35.666
Yeah. Okay. Okay.
Eoin Comerford
00:39:35.698 - 00:39:36.146
Perfect.
Jonathan Cedar
00:39:36.258 - 00:39:39.446
Yeah, yeah. 47. You have to be really precise these days.
Colin True
00:39:39.498 - 00:39:39.902
Never know.
Eoin Comerford
00:39:39.926 - 00:39:40.530
Yeah.
Jonathan Cedar
00:39:41.270 - 00:43:10.368
Look, I think if, if, if, if the roster of tariffs was to be long term, implemented in the way they look today, consumer prices are going to go up massively. Think full stop.
Like I just, you know, I, I, I think one probably consumer misperception because of the way it's presented in the media a lot, but I'd imagine folks who are in the trades probably have a better handle on is no company, no factory, no manufacturer, no retailer, no rep. Like no one's sitting on discretionary margin. Everyone has refined their business to a place where it's like this is what keeps the lights on.
What pays the bank for our debt, what pays our employees. We live in a very efficient market system from that standpoint, which means if more cost comes into it, there's nowhere for it to go.
That's the hard truth. Right. So could manufacturers absorb a couple points here and there? Sure. Right.
We could figure out what to do a little bit less of we'll get fewer snacks. I don't know.
We can find small ways to cut costs, but beyond a couple of percentage points, you really have to start to fundamentally transform your business. Most of the time that's not possible.
And so if the world moves forward on the current tariff plan, well, you could expect, I would say, somewhere between 70 and 100% of the tariff rate to show up as an MSRP adjustment. That's just what it is. I think the hard part that we're grappling with is how stable is today's source of truth.
It's shifted quite a bit over the last few weeks. What will it look like next week? Are these negotiation ploys, are they truly a new worldview?
I think the administration has expressed both of those perspectives and so it's hard to know which one really carries the day, often simultaneously. Yeah.
So I think from our perspective, we're trying to find every lever to pull to buy a little bit of time to see the current story evolve to a point where we can look at it with a bit more stability.
At some point we will run out of time for that because current inventories just will run out and we need to be putting more stuff on the water shortly, you know, for a long time. Biolighting goal zero inclusive.
You know, folks have been looking at whether there's geographic benefits to where you manufacture, you know, where most of this stuff is Asia based. Regardless, you know, 80% of the world's batteries come out of China, regardless of where you assemble them.
You know, more than that percent of the world's solar panels, like these are the core commodities that drive our business. And so in some respects, like, sure, we can move assembly to Thailand if, or Vietnam. Right.
But like, right now, those places are taxed, you know, at pretty high rates, too.
Colin True
00:43:10.504 - 00:43:11.180
Right.
Jonathan Cedar
00:43:12.200 - 00:43:35.170
So, sorry, now I'm sounding as confusing as the current tariff environment, but I think the point is we need to give this a minute to stabilize and then ask the questions of are these just simply the unavoidable prices or can we make movements within our supply chain to move to more economically advantaged geographies and how long will that take us.
Eoin Comerford
00:43:35.710 - 00:44:59.938
In terms of, you were saying 70 to 80% impact on MSRP.
But as I'm looking at it and talking to some brands and some retailers, part of the challenge is the magnifying impact of expected margins at each level.
So let's say a battery pack costs 50 bucks and now it costs $75 with all of the additional tariffs and what have you, it's not just, hey, we're just going to tack on $25 onto the, so the $200 battery, let's say, becomes $225.
But if retailers expect, let's say, 40 points of margin on that, they're not going to be willing to say, okay, here we're tacking on 25 bucks onto wholesale and you just tack on 25 bucks onto retail. No, no. Now the margin equation is broken.
So in some cases, what we're hearing is, yes, that's what brands are asking for and retailers are saying, hell no. Right. I mean, to your point about margins, it's not like retailers are living high on the hog, especially outdoor specialty.
So, no, we expect you to maintain that 40 points of margin.
So now that, now we're talking that $25 becomes 50 bucks, let's say, on the final piece, and then you get to the affordability issue and all those other challenges.
Colin True
00:45:00.034 - 00:45:17.350
Hey, guys, sorry to interrupt. I literally just got a text from Kyle Frost.
Breaking on CNBC, Trump temporarily, temporarily drops tariffs to 10% for most countries, hits China harder with 125%. So I don't know if we, if we want to, we might just want to continue.
Jonathan Cedar
00:45:18.130 - 00:45:25.034
This is why I said we have to note that it was, it was only the 47 past the hour and now it's 55 past the hour. And it changed.
Colin True
00:45:25.082 - 00:45:26.430
We made it nine minutes.
Eoin Comerford
00:45:27.340 - 00:46:15.850
I think part of what's driving this is exactly what you were talking about, Jonathan, is one of the issues with this sort of tariff everyone approach was that it wasn't punitive to China, who supposedly is the big bad wolf in this whole scenario. Because everyone was like, well, would I move to Vietnam when they're at 46%? I mean, yeah, it's less than 100% or 104 or whatever the hell it is.
Not to mention all of the most favored nation, you know, tariffs below that at a category level. So, you know, at the end of the day, people are like, well, I'm just going to stay and stay in China.
Maybe this is, you know, the Trump administration's way of saying, no, we really do want to stick it to China.
Colin True
00:46:15.970 - 00:46:43.210
It sounds like it says it in this article. Oh, it said the president Donald Trump announced a 90 day. By the way, I'm leaving all this in the 90 day pause on the full effect of his new tariffs.
Trump also said that he was raising tariffs imposed on imports from China to 125% effective immediately due to the, quote, lack of respect that China has shown to the world's markets, end quote. So, yeah, he's overtly sticking it to China. All right, we can wrap it up there, guys.
Eoin Comerford
00:46:46.670 - 00:46:47.766
Yikes.
Jonathan Cedar
00:46:47.958 - 00:46:51.990
Well, let's, we could put it, we could pause and come back in 10 minutes and then the news will be different.
Colin True
00:46:52.030 - 00:46:55.990
Right? You want to. Maybe we should have a regular hour scheduled podcast. Jonathan, you can come on.
Eoin Comerford
00:46:56.030 - 00:46:57.050
Yeah, yeah, yeah.
Colin True
00:46:57.450 - 00:47:00.310
Live real time to the changes.
Jonathan Cedar
00:47:00.810 - 00:47:31.960
Well, that's why I think our strategy is to figure out how much time we have to see this stabilize.
Because I think any decision we make right now is going to be the wrong one other than taking some wild exposures on cost of goods that could ultimately be unsaleable two months from now. That's the place we can't be. High tariff and then tariff comes off. It's going to screw up the market.
Eoin Comerford
00:47:34.900 - 00:47:53.618
You just responsibly can't send a shipload full of product out there having whatever it is, four, six weeks, whatever it takes to get across the Pacific Ocean and have no idea, literally no idea of how much you have to pay when it arrives.
Jonathan Cedar
00:47:53.794 - 00:48:29.630
Which, let's just remind ourselves every company is already in that position. Right? Like we have millions of dollars of product on order, you know, millions of dollars of product on the water.
You know, it's, it's, we're already in that position. The question is how much, how much worse do you make that position. Right. And I think that's.
Yeah, I think we're all just really hoping that whatever the outcome is, that it becomes more permanent because whatever the reality is, we can find a way to address it. Right.
Colin True
00:48:29.750 - 00:48:52.660
And that's what we said on the show on Monday. Right, Owen? I mean, it's kind of like if this is what it is, it's like we'll figure out how to work within it.
But as, I mean, this honestly couldn't have been better timed being, frankly. Right. Your strategy obviously is sound, but it's just a truth. We're, you know, four days out from that episode, Owen. Right.
And now here we are in the middle of having another conversation about this and we had to pivot on our conversation. Oh, nope, changed again.
Jonathan Cedar
00:48:52.700 - 00:48:53.012
Here we go.
Colin True
00:48:53.036 - 00:48:53.956
This is what we're doing now.
Jonathan Cedar
00:48:54.028 - 00:48:54.324
Yeah.
Colin True
00:48:54.372 - 00:48:58.644
And this is probably what we should just continue to expect, at least for the short term, I would imagine.
Eoin Comerford
00:48:58.692 - 00:49:21.550
And it's only a 90 day. It's only a 90 day reprieve. Right. It's not like, hey, it's 10% and that's what it is. It's really more of a, a negotiation window than anything.
Well, and, and you know, and if, if these countries don't, don't sort of, you know, come on bended knee, I think you're going to see those same tariffs be in place.
Colin True
00:49:21.850 - 00:49:43.664
And it's funny is that you're right, it makes sense that he really wants to stick it to China.
But I, there was a little part of me, it's like, well, you know, this whole tick tock deal went away because of all of this and it felt like that was going to be a victory lap if he was able to pull that off. So maybe he would actually back off of that if he was going to be able to sell his tick.
I don't know, it just, there's all these weird other variables that you never really, you're never going to know. So, Jonathan, congratulations on acquiring.
Eoin Comerford
00:49:43.792 - 00:49:44.560
Yeah, really?
Colin True
00:49:44.680 - 00:49:49.952
Goal Zero. Sorry, that's where we're ending.
Jonathan Cedar
00:49:50.096 - 00:49:58.048
Well, I'll say this, I'd way rather be in a trade war with BioLite and Goal Zero together than with each of us individually.
Colin True
00:49:58.144 - 00:49:59.200
Hey, there you go.
Jonathan Cedar
00:49:59.320 - 00:51:17.370
So, and look, I think this is going to be a tumultuous period of time, but if there's one thing that we've all gotten really good at over the last five years, it is building contingency scenarios, understanding how to decide when to action them. That ability to be contortionist and responsive I think is really important.
And to the earlier question about, you know, being a smaller company platform, I think that is our opportunity right. As we can move quickly to respond to events as they unfold. And I think, you know, we all survived the.
Well with, with the, the suffering of COVID notwithstanding. You know, I think from a business standpoint, most of the businesses survived that period of time.
It was just a huge amount of extra work to deal with the uncertainty and the dynamic changes of it. And I think this chapter is going to be no different.
And if anything, we're just that much more in shape to be able to build contingency plans and react. So I'm confident we're going to come out the other side of it. But I also think it's going to be a hell of a lot of work.
Eoin Comerford
00:51:18.450 - 00:51:48.710
Absolutely.
And I'm not sure if you get to listen to the episode where we talked about accessories, but really the reason why biolite made that top five is because of the level of innovation that your company has shown over the last 10 or 15 years. And so we're really, really excited. I'm excited to see what you can do with this combined platform. Obviously, Goal Zero.
Another great innovation story within the industry and just, yeah, really looking forward to seeing what's next.
Jonathan Cedar
00:51:49.290 - 00:52:11.954
Awesome. Well, and to that point, we do have a full pipeline of awesome new technology coming out at the summer trade season this year.
So both under the biolite brand and the Goal Zero brand. So lots of we're not sitting on our hands. We're continuing to push these categories forward even in a crazy world.
Colin True
00:52:12.122 - 00:52:15.680
Thanks for joining us, man. Appreciate you having on. Let's do this again sometimes.
Jonathan Cedar
00:52:15.790 - 00:52:17.920
Awesome. Well, so nice chatting with you guys.
Colin True
00:52:18.820 - 00:52:43.620
All right, that's the show for today. I hope you enjoyed some breaking news inside of the breaking news. Come back on Wednesday for our normal Monday crew.
Send your emails and feedback to myrockflightmail.com the Rock Fight is a production of Rock Fight LLC. I'm Colin True. Thanks for listening.
And back from the depths of Florida, it's our guy, Chris Demaicz and he is here to sing the Rock Fight Fight song. Will see you next time. Rock Fighters.
Chris DeMakes
00:52:43.700 - 00:53:44.080
Rock Fight. Rock Fight. Rock Fight. Rock Fight. Rock Fight. Rock Fight.
Welcome to the Rock Fight where we speak our truth, slay sacred cows and sometimes agree to disagree.
We talk about human powered outdoor activities and pick bites up on topics that we find interesting like pop culture, music, the latest movie reviews, ideas that aim for the head. This is where we speak our truth. This is where we speak our truth.
Rock fight, Rock Fight, Rock fight Welcome to the Rock Fight Rock fight, Rock fight welcome to the Rock Fight Rock Flight Rock fight Rock fight Rock fight Rock fight welcome to the Rock Fight Rock fight Rock fight Rock fight.