For years, the cooler was a simple product. It kept your food and beverages cold for a little while, then the ice melted. They didn’t weigh much, and they weren’t much to look at. Adding things like wheels or a different handle were design revolutions! Simple. Boring. They did what you expected them to.
Then Yeti came along. Its coolers seemed ultra-masculine in their blocky, muscular appearance. They were heavy as hell, with ultra-thick walls and a price tag that seemed almost like a dare. A rational person might’ve looked at the price on this big plastic box and assumed the company would soon fail, but no! That’s human nature for you: Make it expensive, claim it’s capable — oh, and market it doing exotic things in remote places to appeal to bougie weekend warriors — and it’ll be wildly successful.
Is it that simple, though? And does the design and construction really demand a higher price tag? Does everything really have to be insanely built and insanely expensive these days? Why are these coolers so expensive?
It’s actually all a little complicated. Alongside Kevin Williams, a marketing professor at the University of Texas McCombs School of Business, and Michael Prince, an industrial designer who’s president and founder of Beyond Design Inc. (and who worked on coolers many years ago), we’re chilling with some answers.
What’s so special about Yeti and those other big, nuclear-fallout-grade coolers?
For a while, coolers were constructed with a process called injection blow molding. It’s kind of like how glass is blown, and it’s how you make those hollow chambers in a cooler’s walls that are filled with Styrofoam, creating a barrier, or in some cases, a vacuum inside. This barrier slows the transfer of heat through those surfaces, because the molecules inside (or lack of them) can’t conduct heat very well. That’s cooler design in a nutshell. Blow molding is cheap to do, but the walls are thin, and unfortunately the process creates weaknesses at corners and joints.
Yeti and its copycats are made with a different process, called rotational molding, or roto molding. It’s where a mold is filled with molten plastic, then rotated consistently to achieve an even thickness. “If you took your hands together and made a cup out of them, then put plastic on the inside, heated it up and rotated your hands around, you’ll be able to get a part that looks like the inside of your hands,” Prince explains. That’s basically roto molding, and the advantage of it is that there are no weak spots.
So it’s a super high-tech process?
Er — no. “It’s a very low-tech process,” Prince says. “It just happens to be a good process for what Yeti does.” As an example, Prince’s firm does work for a porta-potty company. The tank inside is, yes, roto molded. It makes the tank watertight and gives it thick walls. You’ll hear roto molding touted a lot in blog and YouTube videos that compare premium coolers, but it’s the same process used to make kayaks and those plastic road-construction barriers. It works well and makes for very strong plastic that’ll keep ice cold for days, but it’s not revolutionary.
But does roto molding cost more? Is that why fancy coolers are so expensive?
Yes and no. Prince says the tooling (the molds used to make thousands of the same part) in roto molding costs less than blow molding, so the upfront investment is less. But each piece part will cost more because it takes longer to make, involving more labor. That’s where Yeti likely justifies the higher cost. If you’ve ever seen a Yeti in person, you’ll notice that roto molding also creates a nicer finish than blow molding — they just look cooler. Prince estimates a 20 to 25 percent higher cost for the parts of a Yeti cooler, and a 10 to 15 percent higher cost for adding a foam filler inside.
And that’s why a Yeti costs $300 while the competition costs, like, $50?
There’s also the fact that some Yetis are manufactured in the U.S. instead of Asia, and then the other fact that they’re probably making far fewer coolers than, say, Igloo or Coleman, and can’t leverage the same economies of scale.
Still, how did Yeti come out with a cooler that costs nearly 10 times the competition, and do it with a straight face?
According to Williams, this is an example of what he calls “breakaway positioning.” It’s similar to the blue-ocean strategy concept, in which “you look at a mature category where the incumbents have all converged on the same model — basically the same product at similar price points and it’s kind of gotten static — and you do something really different,” he says.
Most of the time, breakaway positioning works in the opposite direction — Southwest Airlines is a perfect example of this. But every so often you can blow open a category by charging a lot more. Williams thinks the iPhone demonstrates this success well: Functionally it’s not a whole lot different than an Android phone, but it’s endowed with a lot more prestige and costs a lot more. This strategy is obviously risky, and difficult to pull off.
“A big part of it is finding a category that’s kind of gone to sleep,” Williams says. “Before Yeti there was Coleman and Igloo and a few others, and they were all making exactly the same product for exactly the same price.” And price-wise, we’re talking about a category in which competition has beaten down the price point to something fairly low, so there was an opportunity to come in at the high end.
But how’d they turn a freaking cooler into a status symbol and a lifestyle brand?
Well, the price, for one thing. Yetis work like a Veblen good, which are luxury items that turn the laws of supply and demand upside down. Take Swiss watches: “A guy who buys Rolex watches doesn’t want a cheap Rolex,” Williams says. “Part of the prestige of that brand is when you wear it, everyone knows they cost at least $8,000 and up. If Rolex brought out a low-end model, it would kill their brand.” It’s why the iPhone 5C — a low-priced iPhone — flopped.
How do you make people want to buy a wildly expensive cooler?
Yeti masterfully markets its products. We know this because we all have an idea of what the brand stands for — some notion of premium yet rugged dependability. It was started by two brothers in Texas who originally wanted to make tough, reliable coolers for fishing and hunting, no matter the cost. Along the way, a private equity company bought a majority stake, and the company decided to expand the market beyond the hook-and-bullet crowd and presented it to what is, culturally, sometimes the opposite crowd: weekend warriors, bougie outdoor adventurers and your trustafarian friend who lives in a destination ski/mountain town.
So how’d they do that?
The same way you sell anything to this crowd: They put their products in exotic destinations, in the thick of the action. Wanna sell a technical winter jacket? Have a pro ski off a cliff in it, or climb some Himalayan peak while wearing it. When rich folks hire guides to take them hunting or fishing, they see the guide’s cooler and want one themselves. Likewise, Yeti advertising shows a hard cooler loaded onto an overland truck on a surf trip, or surfers carrying those soft-cooler backpacks to surf waves off the beaten path, even if it’s hardly a common item to bring surfing. But does that matter? Nah. Yeti and other outdoor brands aren’t only selling the allure of getting away from the rat race to working stiffs, they’re also suggesting that if their product — say, a cooler — works in exotic locations and extreme conditions, it’ll keep your Coronas and White Claws cold at your backyard picnic just fine.
“That’s ultimately what branding does for you: It builds loyalty beyond reason,” Williams explains. “I will pay more, and I will be irrational about it because I want to signal that I’m a Yeti guy. It’s an aspirational thing.” You won’t be shocked to learn that for this reason, Yeti also sells hats, T-shirts and stickers, none of which are designed to keep things cold, but are nonetheless displayed in hopes that the brand on them makes the wearer look, well, “cooler” with their crowd.
Essentially it’s just a decent product that’s been cannily marketed to people with disposable income, huh?
Yep, that’s how we arrived at the mainstreaming of the $300-and-up cooler. And that’s one tiny reason why everything has to be so goddamn expensive these days. Luckily, Coleman, Igloo and others still offer coolers for less than a C-note, and by all accounts, they work just fine, though they may not keep ice cold for a week or whatever, like Yeti and other premium coolers claim. The only question is: How important is your brand of cooler for your self-image? Can your ego handle having your food and beverages chilled in a [whisper it] blow-molded cooler?