For a company with such a striking name, SharkNinja has kept a relatively low profile over the last two decades, mostly letting its robotic vacuums, steam mops, and—more recently—outdoor cooking equipment speak for themselves.
“I think consumers obviously know our products,” CEO Mark Barrocas told Retail Brew. “They know our Shark products. They know our Ninja products. What we’re trying to do is bring awareness to the company behind the products.”
The Massachusetts-based appliance maker took a big step toward that goal earlier this summer, when it spun off from its Hong Kong-based parent company, JS Global, and started trading on the New York Stock Exchange (NYSE).
The listing came after a 15-year stint of 20% year-over-year sales growth, and now Barrocas is pounding the pavement to convince investors and customers that SharkNinja’s winning formula of innovating household appliances through continual research and development will drive growth for years to come. “We really view ourselves as a consumer problem-solving engine,” he said.
Lackluster debut: Yet the stock struggled initially to gain purchase with investors, with economic uncertainty, a weak IPO market, and the company’s continued dependence on Chinese suppliers all being areas of concern for investors. Some have also questioned whether SharkNinja can sustain its previous levels of sales growth.
“The company seems to have an edge with innovative, 21st-century products from robot vacuums to sleek styling products,” analyst Manika Premsingh wrote in Seeking Alpha. “This can continue to drive sales forward. But we don’t know.”
Barrocas said SharkNinja’s ability to sustain its innovation-led sales growth is based on three major initiatives: increasing market share in existing categories, expanding into new categories, and growing its global presence.
For the first two pillars at least, research and development is key. Barrocas noted that SharkNinja has more than 700 engineers working around the world with “diverse competencies,” ranging from software, electrical, and mechanical expertise to cutting-edge fields such as mechatronics and artificial intelligence.
The limits of invention: But Barrocas is the first to admit that there are limits on how much a household appliance can be meaningfully improved.
“In consumer products, it’s hard because at some point, the music stops in a category,” he said. “You just run out of ideas.”
To avoid hitting such a wall, SharkNinja makes sure to not just commit research and development resources to shiny, new categories, but to invest in older product lines as well. Sometimes that means even stodgy old categories such as the humble vacuum cleaner get some love from the company’s engineers.
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He pointed to one recent example where customers were reporting cutting their hands when they tried to cut long hairs stuck in the brush roll using scissors or knives, so the company released a new upright vacuum that cleaned them out on its own.
New stuff: As for the second pillar, SharkNinja has recently had success in a number of new product lines. Two big ones are beauty products and outdoor cooking equipment, both of which fall under the company’s “other” sales category, which doubled in the second quarter to $50 million or 5% of net sales, up from 3% last year.
During the company’s first public earnings call, CFO Larry Flynn called out the Shark FlexStyle, a $299 hair dryer and styler designed to compete directly with Dyson products, as helping fuel the sales growth.
Barrocas explained that the decision to get into a new category stems from an intensive product research process, which among other strategies, includes hosting “hack weeks” every two months aimed at generating new ideas based on insights pulled from social media, message boards, and consumer reviews.
He also cited another recent success story: the Ninja CREAMi. The home ice-cream maker has generated $150 million in sales for SharkNinja. Prior to its release, Barrocas said the entire category only generated $50 million in the US.
The cost of innovation: All this R&D comes at a cost, of course, and SharkNinja is spending more than many of its competitors. Barrocas said that the company is currently investing about 6.5% of sales into research and development.
A report from the National Center for Science and Engineering Statistics found that in 2020 the “electrical equipment, appliance, and components” industry spent on average 3.3% of net sales on R&D. A closer analog is the Whirlpool Corporation, owner of Maytag and KitchenAid, which spent ~3% of net sales.
Barrocas said the company continues to invest in hiring more engineers and building out design facilities in Boston and London.
“I think that you’re going to continue to see more R&D investment from us,” he said. “That’s the lifeblood of our business.”
Editor’s note 9/18/23: This story has been updated since its original posting to more accurately reflect the nature of SharkNinja’s listing.