Industry Special: How did the bike industry get into such deep trouble? EP1: The Feast
Spin Cycle
Escape Collective
4.9 • 1.1K Ratings
🗓️ 13 February 2024
⏱️ 54 minutes
🧾️ Download transcript
Summary
In this 4 part series, I wanted to explore the events that took place that led the bike industry to the troubling point it’s at now. I spoke to over a dozen industry professionals from all parts of the supply chain. From well run bike shops, forecasting analysts, distributors, the biggest bike brands in the world, and manufacturers.
It’s well known that the bicycle industry went through an unprecedented boom during the pandemic from 2020 - 2022.
Jump ahead to 2024 and much of the bike industry is in trouble. New demand has come to an abrupt halt. New entrants into the bicycle market have not stayed as the industry had hoped.
We’re seeing massive inventory overruns at bike shops. Big bike brands are taking on extra warehousing space. Businesses such as Niner, Orange, Wiggle/CRC, have gone into bankruptcy. Otherwise profitable big brands have taken on debt to keep afloat. There are brands out there who are doing well, but they’re the exception rather than the norm. In general , I don’t think many would disagree that the situation in major cycling markets, aside from China, is pretty dire.
The episode is this first of four. We’re going to bring you on a journey through the COVID feast, the storm clouds, the famine, and the lessons learned in hindsight.
In this episode, The Feast, we speak to a bike shop owner, a demand forecasting analyst for a distributor, company CEOs, and a manufacturer to hear about what they experienced during the initial stages of the pandemic in early 2020.
Transcript
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| 0:00.0 | Everyone, whether you were a bike shop owner or a sandwich shop, your first reaction was, |
| 0:07.0 | holy smokes, I'm going to have to close my business. |
| 0:09.0 | In the weeks leading up to COVID closures, we actually had a dumpster catch fire inside of our primary |
| 0:16.2 | warehouse. So we started COVID off with a literal dumpster fire. |
| 0:20.9 | It wasn't that long before all of a sudden we started |
| 0:22.8 | demand again and people started to realize that hey I can riding a bike is |
| 0:26.2 | something I can still can do. There was a time where I was speaking to our |
| 0:29.1 | shram rep and he told me we have two2 billion of open orders. |
| 0:33.2 | And unlike you can't possibly believe those are real orders. |
| 0:36.4 | Either every existing bicycle owner |
| 0:39.1 | has to buy another one in the next five years or the entire third world has to walk into the playing field and start buying high-end bicycles. |
| 0:50.0 | There's just no way, it just breaks it breaks simple math |
| 0:57.8 | Hello listeners. This is Wade Wallace from Escape Collective in this four-partpart series I wanted to explore the events that took place that led the bike industry to the troubling point it's at now. |
| 1:09.0 | I spoke to over a dozen industry professionals from all over the supply chain, from well-run bike shops to forecasting analysts, distributors, the biggest brands in the world and manufacturers. |
| 1:20.0 | It's well known that the bicycle industry went through an unprecedented boom during the pandemic from 2020 to 2022. |
| 1:27.0 | During this period, travel came to a standstill. |
| 1:31.0 | Gyms closed, social distancing became a thing, |
| 1:34.0 | and the bike was the perfect anecdote to that. |
| 1:37.0 | The economy was propped up by governments |
| 1:39.0 | and remained healthy, and people still had disposable income that they wanted to spend. |
| 1:44.7 | This caught the bike industry off guard and why wouldn't it? |
| 1:48.4 | The industry had never experienced something like this before and relies on slow predictable growth and often trying to sell more |
... |
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