Small And Mid-Size Outdoor Companies See Quick Growth, Face Major Decisions Amidst Pandemic

Outdoor companies have struggled to keep up with consumer demand amidst the pandemic. With record participation across everything from cycling to hiking and fishing to paddling, outdoor gear makers have seen product demands 200 percent greater than the norm, leading to a massive influx of interest, sales and, in some cases, hard decisions for the small and mid-size companies. 

“The name of the game for us has been diversifying our supply chain,” says Aaron Kerson, CEO and co-founder of bike-part maker PNW Components. “We are trying to find new suppliers off the beaten path, trying to find high-quality factories that aren’t the household name of manufacturers that everyone else in the bike industry is hammering on.” That means, for Kerson, he has an employee in Taiwan actively researching factories.

For Derek Rodel, CEO and founder of Reyr Gear, makers of a telescoping fly-fishing rod, the 200 percent increase in sales each month over the summer meant decisions about hiring new staff to fulfill orders and relocating a warehouse and fulfillment center. 

Chris McKleroy, CEO and founder of Nocs Provisions, makers of small, waterproof binoculars growing in popularity across the outdoor industry, quit his day job to focus on the business right before the pandemic really hit the United States. With factories in China shutting down for a time, he was selling out of product as fast as he could get it made, forcing him to look at a new way to approach the consumer. 

Every rush of consumer interest brought with it new challenges and fresh hurdles for the small and mid-size outdoor gear companies. Rodel even received a dream offer from a retail store, one that he turned down. “It was a scary ask because the future of retail is interesting and they wanted me to build upward of a million dollars of inventory,” he says. “And as attractive and amazing as the deal would have been, there was a fear (of getting stuck with too much inventory). It was a pretty touchy moment and we went with caution.” 

Kerson, who started PNW Components with his wife, Emily, in 2015, is known for dropper posts, levers and grips for gravel and mountain bikes but has a growing list of products. And while the company has always worked remote from day one, the onslaught of demand for product during the pandemic came from multiple angles. PNW Components ran out of inventory so had to retool the business to gain more leverage in new factories. They improved forecasting to place orders for the entirety of 2021, cutting down on that up to five-month lead time. “That will allow us to get our place in line and get our products on time,” Kerson says. “This forced us to evolve.” 

But it also pushed PNW Components into new areas. Larger companies have come to them with requests for product design help and distribution. Having set up their own fulfillment center for both direct-to-consumer and business-to-business models, Kerson has taken on new customers in this space. “I never would have seen myself in that business,” he says. 

Melanie Cox, Backcountry CEO, a company that offers gear and apparel from outside vendors and their in-house brand, says the surge in participation in the outdoors has given them an increase in sales in almost every category of outdoor equipment and apparel. To meet demands, product teams conceived new algorithms to ensure they had what customers were looking for earlier in the season and increased their level of engagement with customers. “We have onboarded additional technology partners to increase our speed-to-market with changes to our platform and improvements to the overall customer experience,” she says.

McKleroy, while waiting on product from China due to a show-down supply chain, was left without any inventory and decided to open up pre-orders for his binoculars. That way, he says, he could allow customers to buy specific binoculars in their desired color as they were being made. He went this route three times in 2020. “I’m fascinated by that, sort of having built the trust in advance so people will preorder,” he says. “Our sales are pretty unaffected by that; I think due to that layer of trust.” 

Nocs, which launched in 2019, saw orders continue to roll in from folks going outside, whether hikers or birders, with sales up 200 percent in November, for example, without even having product on hand. Being a small bootstrapped company, McKleroy had no standing in his factories, so he had to adapt and build a full program with his factory to plan product further in advance. He plans to run the pre-order process for the eight colors of his binoculars — while doing some “Excel jujitsu” on the demand — until he can build up product inventory. Any binocular not pre-ordered from a shipment immediately go for sale on his site. 

With so many new customers for PNW Components, the rush has hampered the company’s efforts to create an aggressive product roadmap. “It is tough to get new projects in the que,” Kerson says. “We are adapting based on how we are manufacturing.” For example, new bike stems or pedals the company hopes to unveil in 2021 will be made with a CNC machine, starting with a block of metal and precisely machining it down. The costs are higher for this process, but lead times are much shorter, allowing the company to at least get the product to customers. “It is an exciting time for us to all evolve,” Kerson says. “It is not the direction we were expecting, but this year pushed us to do things different.” 

Nocs, too, is struggling to get its new product to market, but McKleroy says the time gives him a chance to be more strategic in how he rolls his upcoming monocular out and work with other brands to collaborate on new projects. 

Rodel says he knows to continue growing he needs to add new products and capitalize on repeat customers. “I definitely have a few things in the works to release next year,” he says, “and keep everybody excited who has taken the bait.” 

Early during the pandemic, as Backcountry saw “green shoots across several categories” they reevaluated predictive analytics and brought on new brand partners, while expanding their own brand, to meet demands in areas they saw vendor partners weren’t going to immediately be able to handle. Moving forward, meeting demand to keep up with new customers and serve loyalists proves essential, Cox says. 

Across the industry there is a question about the future. Was the 2020 year a blip of success for the outdoor industry? Will it last into 2021? How about beyond? “How much of this is sustainable and how much is going to be a blip,” is the question Kerson asks. “We aren’t going to take massive risks. We will likely be out of stock (rather than have too much stock). I feel better about that.” 

Those questions led Rodel to caution, but with his 200 percent growth over the year before he’s hoping the excitement continues. “Everybody is talking about being outside,” he says. “There is a future outside.”