Back in November 2015 when ChefSteps announced the Joule sous vide circulator, I headed over to their Pike Place Market headquarters to check out the device.
It had been rumored for some time that company - known for producing high-polish cooking videos that had been viewed over 50 million times up to that point - was going to make its own hardware, but at the time it was still a mystery as to what form such a product would take.
But when they finally did announce the Joule, it made sense. After all, ChefSteps is one of the leading destinations online for sous vide how-to videos, and company CEO and cofounder Chris Young was coauthor of The Modernist Cuisine, a seminal publication which helped bring sous vide cooking to a wider audience.
When I visited with Young last November, he talked excitedly about the circulator's new heating element and the visual guidance aspects of the app (the company's contribution to the growing "guided cooking" movement). He also talked about offering the Joule to the fast-growing ChefSteps community first and at a discount, a reward for the growing tribe of foodies the company was creating around its popular cooking videos. The device was originally offered up at a preorder price of $199, and later the preorder price jumped to $249, with the intended retail price of $299.
But hold on! Nine months later and with the Joule starting to come off the production line, ChefSteps announced via email to early backers today they're dropping the retail price to $199 (and a new preorder price of $149), before they ever start shipping in volume. And to make things square with early backers, they're also offering a refund to match the new preorder price of $149 for anyone who bought the Joule at the earlier $199 or $249 preorder price. (you can find the new preorder page here).
This all begs the question: why a price drop before the product ships in volume?
According to the company, the company was able to make enough Joules in volume they achieved significant cost savings they could pass along to the consumer. From the email:
"...We have all of you to thank for the overwhelming support you’ve shown for Joule. Enough support, in fact, that we reduced our cost to make Joule by producing way more of them, and now, we’re passing those savings on to you."
They also give details on the new pricing, as well as the amount refunded to backers, which totals around $1 million:
"Moving forward, Joule’s new retail price is $199. As our thanks for being one of the first to order Joule, you will get it for the new preorder price of $149. That means we’re giving back about $1 million to preorder customers who supported us from the very beginning."
I have no doubt they were able to achieve cost savings as they ramped up production, but I also think the price drop also could mean the following:
-The sous vide category is growing quickly, and the market is a lot more competitive than it was just nine months ago when the announced the Joule. Anova is killing it online and now are expanding to all Target stores, while new entrants like Gourmia are attacking the market at the low-end with $129 circulators.
-This move shows ChefSteps is in a relatively strong financial position. We know the company has financial backing from the likes of Gabe Newell, co-founder of Valve, but it also shows the move from online education company to online cooking education company with hardware didn't put them in a financially precarious position (as can often happen when shipping hardware).
Based on my calculation, the $1 million aggregate refund amounts anywhere between 10 and 20 thousand Joule preorders, which is a pretty healthy number out of the gate. With the lower price and actual Joules heading into the wild, I expect volume for the device to pick up quickly.
Bottom line: the consumer sous vide market is getting extremely competitive, and the Joule - with its heavy emphasis on visual guidance, app control, and a unique form factor - should heat up this market even more.