2021 Outdoor Industries Report
Pandemic pushes businesses to plan ahead for supplies, orders and smaller outdoor rec companies see biggest ups, downs
Colorado companies that supply outdoor recreation equipment and products experienced a year of peaks and valleys in 2020 trying to hold on during pandemic-influenced disruptions of production and supply chains.
“We experienced some of our worst months of almost 20 years in business in the spring followed by very strong months in the summer,” said Len Zanni, co-founder and chief marketing officer of Big Agnes, a Steamboat Springs company known for sleeping bags and tents.
Business owners and industry experts say smaller companies experienced the most difficulties and vulnerabilities during the lows of shutdown months early in the pandemic. They also experienced the highs when socially distanced outdoor recreation skyrocketed during warmer months.
Larger outdoor recreation companies that keep more inventory of supplies and products on hand as well as companies that embraced e-commerce fared better in 2020, said Rich Harper, director of government affairs for the nonprofit Outdoor Industry Association, based in Boulder.
While weathering unpredictable sales in 2020, outdoor recreation companies were still adapting to the 2019 Chinese/U.S. tariff wars because some 75% of supplies for goods come from outside of Colorado and largely overseas, noted Nathan Fey, director of the Colorado Outdoor Recreation Industry Office.
“2019 was already a difficult year because of U.S. import tariff and protection policies put in place, and many of the source materials that go into some sections of the industry are produced and shipped from China,” Fey said. “It’s still a challenge to find those domestic suppliers. Overseas sourcing is a large percentage of input.”
Zanni at Big Agnes said the keys to companies managing the ebbs and flows of 2020 included frequent communication with retail and manufacturing partners as well as allowing employees the flexibility to be creative when batting pandemic-created curveballs.
“My colleagues on the sourcing and product development side were in constant contact with our manufacturing partners and suppliers, so we had a good handle on their abilities to produce or ship raw materials or finished goods on time,” said Zanni, noting Big Agnes products are made in various countries throughout Asia. “Many of them had closures as well that led to disruptions and delays, but our long-standing relationships and friendships made this much easier.”
The fluctuating ride for many distribution and manufacturing businesses in Colorado included the stress of varying internal staffing levels and production demands as outdoor recreation interest climbed in the summer. Companies endured layoffs during lockdowns, Paycheck Protection Program-assisted rehiring, work from home requirements, and employees and suppliers out sick with COVID. Fey said an average 27% of employees at Colorado outdoor recreation businesses were laid off, let go or furloughed as reported in an April 2020 survey through his office. The April impact study also showed three out of four businesses had suspended all or part of their operations.
The U.S. Bureau of Economic Analysis released data in November outlining the economic impact of outdoor recreation activities across American states. The data from 2019 shows outdoor recreation represented 3.1% of the overall gross domestic product in Colorado, ranking Colorado within the top 10 states. Federal statistics for percent of GDP shows the top six outdoor recreation industry states as Hawaii at 5.8%, followed by Vermont at 5.2%, Montana at 4.7%, Florida at 4.4%, and Maine and Wyoming at 4.2%.
Outdoor recreation suppliers say one of the biggest challenges of 2020 was responding to morphing requests and needs of retailers, whether that meant shipping smaller or piecemeal orders, establishing payment plans or cancelling some orders.
Gail Ross, chief operating officer at Krimson Klover in Boulder, said the 10-year-old company with 10 employees endured 30% cancellations in retail orders shipped across the U.S. and Canada. Ross said the company provided some price concessions in order to keep new offerings of their women’s apparel in stores.
Krimson Klover already had product from its sustainably sourced women’s outdoor clothing lines “on the water” in February shipped from overseas manufacturers to the U.S. before the first wave of pandemic shutdowns, Ross said “Fortunately, COVID happened between shipping of the spring and fall lines,” she said.
Trying to adapt to slowdowns in deliveries of prototypes and shipping delays through short-staffed California ports and the U.S. Customs office, the clothing company added three weeks to delivery timelines and reduced the number of product styles and colors under development, Ross said.
“It’s not the time to take an inventory risk,” Ross said. “We had to tighten up our spring 2021 offering because we weren’t sure if the country would still be dealing with COVID, and we worried that our wholesale customers were sitting on excess inventory from spring 2020 and won’t be buying as much for spring 2021.”
Outdoor recreation companies with in-demand products may eventually benefit from the pandemic. Owners say the pandemic introduced new customers to outdoor pursuits that could benefit sales in the future through increased, and hopefully responsible, recreation.
“Because everyone has shifted focus on how they recreate, we have actually done very well because people are having to plan for what they cannot do next year,” said Britton Purser, who started Vintage Overland teardrop camping trailers in Grand Junction as a family business in 2015. “You can see people are reprioritizing, and it’s all about getting out.”
Zanni said Big Agnes sleeping bags and pads, tents, camp furniture and accessories all sold well mid-year, and their repair division stayed busy with so many people using camping products heavily.
“We are thankful that our category of camping equipment turned out to be a good category to be in,” Zanni said.
Larger outdoor recreation companies in Colorado have the advantage of placing bigger supply orders and have relatively long manufacturing lead times for their products. Zanni noted Big Agnes benefits from an “intricate web of suppliers stretched around the world.”
Smaller outdoor recreation companies, especially those manufacturing based on customer preorders or that may have less overhead to keep large volumes of supplies on hand, shouldered more pandemic-related stress. Harper, with the Outdoor Industry Association, which has 174 member companies in Colorado, said larger global brands have resources and teams to deal with a lot of pandemic-related challenges. The struggles of smaller or medium-sized businesses included having fewer sourcing partner options.
Purser at Vintage Overland said a few orders for the handcrafted trailers were cancelled or postponed early in the pandemic, but then sales doubled from July to October compared with the previous year. The company experienced shortages and delays in deliveries of supplies such as axels, bearings, specialty paints, tires, foam mattresses and solar units, so Purser shifted supply-order lead times from two weeks to up to eight weeks.
The small business owner also secured additional funding to enable larger supply orders. While he previously ordered two or three solar-powered battery units at $500 each a few weeks in advance, now he orders 10 units one to two months ahead. For wheel assemblies, now he orders 30 in advance rather than a dozen at a time.
Larger supply orders and longer planning times make the camping trailer builder a bit nervous about sales numbers for this spring, but Purser said the company should weather the storm with nimbleness.
“You plan for what you can plan for,” he said, “and then adjust for what you can’t.”