Outdoor Recreation Industry Sees Significant Growth With Changes In Consumer Behavior Sparked By Covid-19

Since 2020, the Covid-19 pandemic has had a marked affect on consumer behavior, especially when it comes to outdoor recreation.

After lockdowns kept people indoors for much of the spring and summer in 2020, Americans got outside in droves, with almost 7 million people participating in some kind of outdoor activity, from skiing and snowshoeing to hiking and fishing.

But with March being the second-highest revenue-generating month of the ski season after December, the early closures of resorts in spring 2020 had a devastating effect on the industry.

According to figures from the National Ski Areas Association (NSAA), 93% of ski areas ceased operations early due to the pandemic; as a result, the industry suffered an estimated loss of $2 billion due to the loss of income from not only skiing and snowboarding but also summer conferences, weddings and other large-scale events.

In 2021, however, a confluence of factors led to a surge in growth on the retail sector of the industry, which continued into 2022 and is projected to continue in 2023.

The market size of the sporting goods retail industry (which includes sporting equipment, firearms and hunting equipment, athletic apparel and athletic footwear) measured by revenue is $67.8 billion in 2023, per recent figures from IBISWorld. (It’s important to note IBISWorld figures take into account retail store sales only, excluding online sales.)

The industry has grown 6.7% per year on average in the U.S. between 2018 and 2023, with a marked jump from 2020 to 2021. In fact, the sporting goods industry in the U.S. has increased faster than the economy overall.

Matt Eby, CEO of private equity firm Seawall Capital, attributes the marked rise in outdoor activity participation to numerous pandemic-driven behaviors. Seawall Capital aquired Kent Outoors, a collection of outdoor brands including BOTE and Kona Bicycles, in 2020.

“People had extra time because they weren’t commuting anymore; the work-from-home environment enabled them to pick up new activities that became hobbies,” Eby said. “Hobbies become habits and habits become part of your lifestyle.”

While there’s the potential that “some of those folks fall away,” Eby says, “Covid created some permanent changes in our society, and some of that change is around expectations of work-life balance.”

As Eby notes, when people pick up a new activity, be it mountain biking or snowboarding, most don’t immediately purchase the highest-level equipment and jump right to the most difficult trails.

Someone might buy a fairly simple bike or snowboard set-up and then, over time, upgrade their gear as their ability improves. They progress up the product pyramid, a long buying and replenishment cycle at the base consumer level.

The product pyramid differs by price point and, therefore, the engagement level of the consumer. The top end of the pyramid represents the “hyper-enthusiast,” Eby says, and many of the brands Kent Outdoors represents fall at or just below that level.

“It’s a true lifestyle for them,” Eby said. “You talk about costs—and there’s definitely been cost inflation, nobody’s denying that—but once you’ve already decided you are a mountain biker and you’ve got a brand that you prefer, let’s hope it’s Kona, you have a high willingness to spend for that product, because that product enables to you engage in the lifestyle and activity that you love. It’s very meaningful to you.”

In that way, Eby feels that brands that fall at the mid-top of the product pyramid are fairly insulated from recession or inflation effects. For the consumers who have made their outdoor activity of choice a lifestyle—even those who may have only picked up an activity during the pandemic—they’ve made a “fundamental behavioral” choice to invest in that activity. The spending sacrifices may come in other areas, like vacations or going out to dinner.

Which activities have seen the most growth? Golf equipment, camping gear and snowsports equipment were especially strong categories.

Though it doesn’t fall within outdoor recreation, climbing equipment is one sector of the sporting goods industry overall that has seen tremendous growth after taking a devastating hit during the pandemic. Between March 2020 and June 2021, the U.S. fitness industry as a whole lost $29.2 billion in revenue.

Now, according to a market outlook report from February, the climbing gear market is growing at a compound annual growth rate (CAGR ) of 9.5% during 2021-26. Climbing has appeared to have such particularly strong growth in part because gyms were closed for so long due to the pandemic, so when they reopened, climbers were quick to stock up on gear like shoes and chalk bags.

Climbing equipment has been a “particular strength across the portfolio and categories we track,” Eby said. “Members are now coming back really strong, but because the gyms were closed for a long period of time, you’re seeing rapid increases.”

Snowsports increased 11.7% from 2020 to 2021 and 27.2% on a two-year basis to $683.6 million. Touring (also referred to as uphill skiing or skinning) in particular has become a major driver of outdoor recreation.

In Winter 2020, the Snowsports Industries America (SIA) participation report noted a spike in backcountry/AT (alpine touring) participation of 57%. The 2021–22 NSAA end-of-season survey reported that 62% of U.S. ski areas are currently allow uphill access—a 30% increase from 2012-23, the first year the survey polled resorts on uphill access.

The increase in touring interest has caused brands like Black Crows to adapt their product offerings accordingly.

“It has been something we are looking at and developing products for,” said Tristan Droppert, Black Crows North American Marketing Manager. “Our touring product is unique and has been well-received because it is well-balanced and is designed to perform well on both the uphill and the downhill.”

These changes in product offerings, which are a result of increased interest, also ripple throughout the rest of the industry. Ski areas like Colorado’s Copper Mountain and Aspen Snowmass have actively worked to strengthen their touring offerings, and many are actively adding new terrain to their mountain footprint.

Many ski areas have begun offering either an armband program or an added cost uphill pass amounting to $50-70 for a season, and some include it free with a season pass. Would-be uphillers can also rent this equipment at some resorts.

In the outdoor industry, “innovation is paramount” to get consumers to continue buying product, Eby says. “The best brands in outdoors are the brands that are product-first: build an amazing product that delivers on what the brand promises, delivers performance…but it also has to be new, exciting or innovative.”

What about the folks who are thinking of taking up climbing or skiing (or starting their children in a new activity), but don’t want to buy all the expensive gear until they’re sure it will stick? Rentals are a “relatively small piece of the pie today overall,” Eby says, but if brands and the reailers they work with are smart about how they do them, it can be another avenue for growth.

Action sports icons Travis Rice (freeride snowboarding) and Cam Zink (freeride mountain biking) saw an opportunity for a new initiative in the recreation space. Their idea birthed online gear marketplace SENDY, which allows users to buy, sell and rent outdoor gear anywhere in North America.

Not only does the platform connect adventure-seekers who share a love of the activites, but it reduces the amount of products that find their way into landfills every year and enables people to try out a new activity without a major financial commitment.

SENDY’s early focus is on categories including cycling, hiking and camping, mountain biking, skateboarding, snowboarding, skiing, surfing, climbing, fishing, motocross, paddling, running and wakeboarding.

Because we’ve seen a period of such rapid growth in the outdoor equipment space, it may necessarily appear to slow down soon. But Eby forecasts a powerful force that will kickstart the space once again in the coming decade.

“The Millennial generation has been talked about so much because it’s such a big generation and they’ve entered those prime years where they’re starting to have kids,” Eby, who has two school-aged children, said. “People spend a lot of money on their kids in the outdoors; one of the biggest gifts you can give to your kids is a love of the outdoors, so that is going to be a powerful consumer economic force over the next five to ten years.”

Zink specifically mentioned youth participation in outdoor activites as a selling point for SENDY, as well.

“I reap the benefits for my own kids—with how many sports they do and how fast they grow, we can find more curated, higher-quality gear at the same price or less as they grow,” Zink told me.

With the significant increase in interest in outdoor recreational equipment since the pandemic began, there is a very real chance a lot of this gear ends up in landfills as children grow out of their gear or people give up their newfound pursuits altogether.

Thankfully, this industry growth has dovetailed with consumer demand for sustainability. More than ever, consumers in the outdoor space are also looking for the brands they support to be involved in environmental action.

Responsibility and sustainability are key, but the messaging must be authentic. “You can’t just slap a sticker on a product that says ‘carbon neutral,’” Eby said. “Consumers will see through that.”

As a result, brands like Burton Snowboards and Patagonia recently announced their plans to become carbon neutral across their business by 2025.

If consumers support retailers who have pledged to manufacture sustainably and take advantage of services like SENDY to recycle and reuse old gear rather than trash it, the outdoor spaces that house the activities people have newly fallen in love with since mid-2020 will continue to exist for generations to come to enjoy.

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