Snowboarding Growth Back On Track

The ever-curious editors here at SNOWboarding Business have once again consulted a slew of information-gathering experts around the country to determine the state of the snowboard industry for 1999 and beyond.

Things Are Looking Rosy According to participation indicators, there’s lots of good news for our sideways-standing, mountain-riding sport. “The snowboarding industry is growing, it’s bigger and more serious than it was before,” says Burton National Sales Manager Clark Gundlach. “We’re a bright star in the winter-sports business.”

Consumers are getting far better products than they did just a few seasons ago. For brands and manufacturers, the worst of consolidation is ending. Fewer brands and a larger participation pie would seem to indicate more business for the surviving players.

Significant challenges remain, and the overall nature of the snowboarding industry continues to evolve away from its free-wheeling entrepreneurial heritage. However, “The state of the industry is still fun,” says Pete Saari, co-founder of Mervin Manufacturing.

The future looks hopeful for the survivors who have learned to operate lean-and-mean company machines. “The changing industry is in the best shape it’s ever been,” says Ken Greengard, president of Joyride.

The Remaining Cash-Flow Crunch According to the SIA, the average price of a snowboard increased seven percent last year. However, making money as a snowboard brand has become difficult. Too much manufacturing capacity and too much available product has, in general, reduced wholesale and retail board margins.

According to the SnowSports Industries America Cost Of Doing Business Survey, gross margins for the ’98/99 season are ??? compared to ???? three years ago.

Cash-flow issues continue to jeopardize the health of several snowboard brands (just look at what has happened to the former parent company of the top-five brand Morrow), but the hardest part of the consolidation is thankfully over.

Realistic Growth There are fewer brands and fewer snowboard shops across the nation (one sales manager pointed out that thanks to a series of store buy-outs, there are really only four buyers servicing the overwhelming majority of shops in Colorado).

As one top industry exec points out, you can’t expect snowboarding to grow at a huge percentage rate anymore. It’s just too big a sport now and newer participants aren’t as passionate, don’t go to the hills as much, and don’t buy new equipment every year.

Even so, the growth in overall participation, resort visits, and shop sales are solid indicators of good things happening across the country. What makes these even more hopeful is that this reinvigorated attitude came despite what most in the industry say was a terrible snow season. Except for record-breaking snowfall at Mt. Baker and a solid Northwest/Tahoe season, it was a poor snow winter across the country, and especially bad in Utah, Colorado, the Midwest, and all of the East.

Five-Million People Are Snowboarding In The United States In the annual American Sports Data (ASD) report, the total number of snowboard participants climbed well over the five-million mark to 5.4-million for 1999. This growth, up from 4.2-million in ’98, represents a 28.6-percent gain, following a 33-percent gain in 1997. In the same report, Alpine skiing was down almost seven percent from the numbers it posted last season.

Another major sports-participation study published by the National Sporting Goods Association (NSGA) confirms the good news, showing snowboard participation up 29.1-percent over the previous year. According to this report, the total number of snowboarders is now at 3.6-million participants.

In the same survey, the NSGA reports that Alpine skiing was down thirteen percent to 7.7-million parcipants.

This year’s healthy growth rate caused NSGA to dub snowboarding “the fastest growing sport in the United States.” However, it’s worth noting that this year’s increase was enhanced by the NSGA reporting last year that snowboarding participation was down (which conflicted with the data collected by other national organizations).

Because the two surveys vary so greatly in their results, the NSGA and ASD reports are most useful for trendline analysis. Since 1994, snowboard participation is up 71 percent according to the NSGA, and 129 percent according to ASD. When you track growth back to 1988, NSGA shows a 177-percent participation increase; ASD reports track it at 323 percent.

Snowboarders Account For 23 Percent Of Resort Visits To show any growth in resort visits this season was astounding considering the lackluster snowfall. Resorts around the country opened later and closed earlier than usual, and didn’t have much to brag about when they were open (except in the Northwest).

According to the preliminary results of the Kottke National End Of Season Survey conducted by the National Ski Areas Association, overall resort visits were down approximately three percent (from 54.1-million to 52.1-million visitors). However snowboarding posted almost a ten-percent gain, bringing total visits up to 22.9 percent of all guests. This followed a twenty-percent growth rate from the year before and a compound growth rate over the last four seasons at an impressive 17.8 percent.

On a region-to-region basis, the Northeast reported 21.5 percent of guests were snowboarders, up from 18.8 percent last year. In the Southeast, the number was 20.9, up from 19.2 percent; while the Midwest jumped to 25.4 from 23.4 percent. The Rocky Mountain region saw the growth go to 17.4 percent, up from 17.1 percent, and the Pacific West again led the country with snowboarders making up 35.2 percent of all visits, up from 30 percent the year before. There were also localized pockets of strength. For example, almost 70 percent of all resort visitors were snowboarders at Snow Summit in Southern California, but it’s definitely at the one end of the spectrum.

Demographic Shifts The demographic profiles of snowboarders are more diverse than ever, reflecting the increasing tendency of traditional Alpine skiers to cross over and participate full-time or part of the time in snowboarding.

According to the ’98/99 National Skier/Snowboarder Opinion Survey conducted by Leisure Trends of Boulder, Colorado, 24 percent of Alpine skiers also snowboard.

This survey also reports that of the 26,830 resort guest polled at resorts nationwide, 69.4 percent of them were strictly skiers, 6.4 percent were strictly snowboarders, and the remaining 24.1 percent of respondents said they skied and went snowboarding.

In the ’96/97 Opinion survey, 73 percent of the 17,085 guests polled were strictly skiers, 2.4 percent were strictly snowboarders, and the remaining 24.6 percent of respondents said they both skied and went snowboarding.

The typical snowboarder also continues to be a much more active participant than the average skier. According to the Opinion survey, snowboarders ride an average of fifteen days a year, compared to nine days for Alpine skiers. The ’96/97 survey showed nearly identical results.

The Browning Of America According to the United States Census Bureau, in 1995 there were 13.4 million males between the ages of eleven and seventeen in the United States. That number is expected to increase six percent by the year 2000 (14.1 million). By 2010, it’s expected that there will be 14.8 million kids who fit the general demographic pattern for snowboarders.

Great news, right? Well, there’s more to it once you look deeper. Up to now, the typical snowboarder has been white and non-hispanic.

Unfortunately, while this segment of the population will grow 2.7 percent between 1995 and 2000 (from 9.1 million to 9.3 million), it’s expected to decline four percent between 2005 and 2010 (from 9.3 million to 8.9 million)

In 1995, 68 percent of males aged eleven to seventeen were white. This number will dip to 66 percent in 2005 and 60 percent in 2010. The upshot (for those of you who are a bit slow) is that the minority population is the sole growth area that fits the traditional snowboarder demographic. Up to know, however, precious little has been done to entice this segment of the population to try snowboarding.

The (Preliminary) Results Are In. According to the preliminary results of the fourth-annual SNOWboarding Business Retailer Survey, 49 percent of retailers reported that overall inventory levels were about right or lower than expected at the end of the ’98/99 season, compared to Sixty-six percent in ’97/98 and 47 percent at the end of ’96/97.

The survey was sent out to more than 650 specialty snowboard retailers across the country. The response rate so far has been a gratifying twelve percent (look for a complete anlysis of our survey next issue).

Sell-through for retailers reporting season-end inventory levels as about right or lower than expected was 77 percent, compared to 79 percent in the ’97/98 season. For those retailer listing higher-than-expected inventory levels, the sell-through percentage was 65 percent. Overall, retailers reported an average sell-through of 72 percent during the ’98/99 season.

Retailers are ordering cautiously for next season. According to the SNOW Biz survey, 43 percent of retailers are increasing their snowboard orders for next season (compared to 52 percent in ’97/98 and 46 in ’96/97). Thirty-two percent are ordering fewer boards (compared to 28 percent in ’97/98 and 42 in ’96/97). Finally, 25 percent are ordering the same as last year (compared to 20 percent in ’97/98 and 13 percent in ’96/97).

So who are retailers ordering from? No surprise that Burton was tops, listed as the number-one brand of snowboard in 55 percent of the surveys. Other brands frequently mentioned in the top three include (in order): Ride, Mervin Manufacturing, Forum, Salomon, K2, Never Summer, Sims, Morrow, and Rossignol.

310,000 Snowboards Sold At Retail Despite the continued slow consolidation of snowboard shops across the country, more equipment was sold at retail in 1998/99 than the previous year. In each product category and in both specialty and chain stores, the news was positive.

According to SIA, 310,000 snowboards were sold at retail this past season compared to 256,000 last and 214,000 the year before. This 21-percent gain shows that most of the excess product that was slowing down retailer’s desire to order new boards is almost gone.

This clearing of the product pipeline is also seen by the average price of a board sold in a specialty stores, which climbed seven percent last season (the first price gain in several years). Boards are selling for an average of 282 dollars, compared to 260 dollars in 1998.

Boots were also up thirteen percent in units and eighteen percent in dollars, while bindings were only up three percent in units and six percent in dollars.

There were 353,500 boots sold this season compared 298,000 sold the year before, and 281,000 bindings sold in 1998-99 compared to 278,000 the previous year.

Snowboard apparel took a big hit this year. With warm weather persisting across the country though the holiday season, shops missed the biggest opportunity to move clothing. In fact, snowboard tops and bottoms sold best after it was marked-down this season.

When the average retail dropped from 117 dollars to 99 dollars, sales picked up. Overall, sales were only down six percent in dollars by the end of March, recovering from what looked tgment of the population will grow 2.7 percent between 1995 and 2000 (from 9.1 million to 9.3 million), it’s expected to decline four percent between 2005 and 2010 (from 9.3 million to 8.9 million)

In 1995, 68 percent of males aged eleven to seventeen were white. This number will dip to 66 percent in 2005 and 60 percent in 2010. The upshot (for those of you who are a bit slow) is that the minority population is the sole growth area that fits the traditional snowboarder demographic. Up to know, however, precious little has been done to entice this segment of the population to try snowboarding.

The (Preliminary) Results Are In. According to the preliminary results of the fourth-annual SNOWboarding Business Retailer Survey, 49 percent of retailers reported that overall inventory levels were about right or lower than expected at the end of the ’98/99 season, compared to Sixty-six percent in ’97/98 and 47 percent at the end of ’96/97.

The survey was sent out to more than 650 specialty snowboard retailers across the country. The response rate so far has been a gratifying twelve percent (look for a complete anlysis of our survey next issue).

Sell-through for retailers reporting season-end inventory levels as about right or lower than expected was 77 percent, compared to 79 percent in the ’97/98 season. For those retailer listing higher-than-expected inventory levels, the sell-through percentage was 65 percent. Overall, retailers reported an average sell-through of 72 percent during the ’98/99 season.

Retailers are ordering cautiously for next season. According to the SNOW Biz survey, 43 percent of retailers are increasing their snowboard orders for next season (compared to 52 percent in ’97/98 and 46 in ’96/97). Thirty-two percent are ordering fewer boards (compared to 28 percent in ’97/98 and 42 in ’96/97). Finally, 25 percent are ordering the same as last year (compared to 20 percent in ’97/98 and 13 percent in ’96/97).

So who are retailers ordering from? No surprise that Burton was tops, listed as the number-one brand of snowboard in 55 percent of the surveys. Other brands frequently mentioned in the top three include (in order): Ride, Mervin Manufacturing, Forum, Salomon, K2, Never Summer, Sims, Morrow, and Rossignol.

310,000 Snowboards Sold At Retail Despite the continued slow consolidation of snowboard shops across the country, more equipment was sold at retail in 1998/99 than the previous year. In each product category and in both specialty and chain stores, the news was positive.

According to SIA, 310,000 snowboards were sold at retail this past season compared to 256,000 last and 214,000 the year before. This 21-percent gain shows that most of the excess product that was slowing down retailer’s desire to order new boards is almost gone.

This clearing of the product pipeline is also seen by the average price of a board sold in a specialty stores, which climbed seven percent last season (the first price gain in several years). Boards are selling for an average of 282 dollars, compared to 260 dollars in 1998.

Boots were also up thirteen percent in units and eighteen percent in dollars, while bindings were only up three percent in units and six percent in dollars.

There were 353,500 boots sold this season compared 298,000 sold the year before, and 281,000 bindings sold in 1998-99 compared to 278,000 the previous year.

Snowboard apparel took a big hit this year. With warm weather persisting across the country though the holiday season, shops missed the biggest opportunity to move clothing. In fact, snowboard tops and bottoms sold best after it was marked-down this season.

When the average retail dropped from 117 dollars to 99 dollars, sales picked up. Overall, sales were only down six percent in dollars by the end of March, recovering from what looked to be a much worse figure earlier in the season.

In chain stores, snowboard equipment again moved up (23 percent in units and 27 percent in dollars. However, the price of a board continues to be much lower in the chains, with an average retail of 167 dollars compared to 282 dollars at specialty stores.

Snowboard apparel suffered a worse fate in chain stores and unit sales were off by 39 percent and dollars by eleven percent.

Snowboard equipment sales brought in 164-million dollars in 1998-99, exceeding last season’s sales of 136-million dollars by 21 percent.–By The Editors Of SNOWboarding Businessed to be a much worse figure earlier in the season.

In chain stores, snowboard equipment again moved up (23 percent in units and 27 percent in dollars. However, the price of a board continues to be much lower in the chains, with an average retail of 167 dollars compared to 282 dollars at specialty stores.

Snowboard apparel suffered a worse fate in chain stores and unit sales were off by 39 percent and dollars by eleven percent.

Snowboard equipment sales brought in 164-million dollars in 1998-99, exceeding last season’s sales of 136-million dollars by 21 percent.–By The Editors Of SNOWboarding Business