Jan 31, 2022 - Business

Outdoor industry looks to a more challenging post-pandemic future

Percentage of state GDP from outdoor recreation, 2020
Reproduced from BEA; Map: Axios Visuals

The outdoor industry rode a pandemic swell as people went outside to play in record numbers.

State of play: How long that wave will continue amid the current market disruptions is the new question.

The industry's existing challenges and uncertain future loomed large at the annual winter Outdoor Retailer trade show last week in Denver.

  • The risk of COVID-19 led the largest players, including Patagonia and The North Face, to skip the confab altogether, and forced others to make last-minute cancellations.
  • The retailers who made the trip lamented delays in manufacturing and other supply chain troubles that made it difficult to meet the growing demand.
  • Others expressed concern about inflation increasing the already steep cost of entry for outdoor activities.

What they're saying: "The ticket price is not cheap anyway, and it's only going one direction," said Matt Gold, CEO of Lakewood-based Christy Sports. "That's real life and that's a challenge."

  • Gobi Heat, a heated apparel company in Fort Collins, recently sent two employees in a rented U-Haul to the port of Los Angeles to retrieve merchandise stuck in a container. "It was the only way to get products to people for Christmas," said Kyle Jacobson, the company's marketing director.

Why it matters: Outdoor recreation added 2.5% of Colorado's GDP in 2020, according to the U.S. Bureau of Economic Analysis.

  • At the national level, the outdoor industry generated $689 billion in economic output, creating 4.3 million jobs and contributing to 1.8% of the U.S. gross domestic product, said Kelly Davis, an analyst with the Outdoor Industry Association.

By the numbers: In 2020, as the pandemic hit, 160.7 million people participated in at least one outdoor activity, the industry's association reported.

  • That's a jump of 7.1 million people, or roughly 2%.
  • Hiking, biking, fishing and camping provided the gateway as the four most popular activities.

What to watch: The outdoor industry is expected to grow in 2022, but at a much slower clip compared to the pandemic spike, said Matt Powell, an industry expert at the NPD Group, a market research firm.

  • Older consumers are leading the growth due to a combination of disposable income and renewed focus on healthy living.
  • Most of the industry's growth is coming from beginners, meaning retailers must tailor their products to keep them engaged.
  • "It's going to be a good but not great 2022 for sports retail," Powell said during a remote presentation at the trade show.

What's hot: A handful of outdoor categories and brands saw the largest increases during the pandemic, according to market figures.

  • Hiking shoes rose significantly, driven by the 4.8 million new hikers in 2020.
  • Electric bikes saw 135% growth to $753 million in sales, making the segment bigger than road bikes at $660 million.
  • Gear for the backyard was also popular, including chairs, smoke-free fire pits, coolers and grills.
  • The fastest-growing apparel brand has been Cotopaxi.

This story first appeared in the Axios Denver newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard. Subscribe here.


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