“Improving industry outlook” and generational opportunities in Sporting Goods 2024 report

Of all the headwinds currently facing the cycling industry, perhaps the one that should really be striking fear in our hearts is rising levels of physical inactivity around the world.

The wealth of options available that discourage activity, like app-bolstering convenient food, unprecedented entertainment options without having to pass the front door and questionable transport priorities are possibly among the reasons why the World Health Organisation (WHO) has found 38% of adults and 81% of adolescents globally fail to meet the organisation’s recommended levels.

Those statistics are the background to the World Federation of The Sporting Goods Industry (WFSGI) and McKinsey’s new “Sporting Goods 2024 – Time to Move” Report. The wide ranging report has made some interesting observations:

• Shifting consumer preferences: more people are choosing sports that are quicker to pick up, require less commitment, and are more social – such as pickleball. Cycling was judged to be part of the category, recording upticks of 10-20%.
• Generational opportunities: participation trumps performance as more older people participate in sport, offering new opportunities of value for sporting companies.
• Mixed market dynamics: varying preferences across geographies suggest companies will need to further tailor their strategies to local conditions.
• And after supply-demand imbalances in the wake of the pandemic, companies are turning to integrated business planning and advanced analytics to help them navigate more volatile times.

“The report highlights an improving industry outlook,” said Emma Zwiebler, WFSGI Interim CEO. “Despite a challenging economic and business landscape, the sporting goods industry demonstrated its resilience in 2023, with shifting preferences and generational opportunities paving the way for sustained growth as we head into 2024. However, it also highlights the urgent need to address the staggering levels of global physical inactivity.”

In a the competitive market, only a minority of sporting goods companies have managed to consistently grow revenues and expand margins. This elite group are well placed to maintain their momentum over the coming year, but many others face an uncertain future, said the report.

“While the year ahead will be marked by uncertainty, it will also offer opportunities,” said Alexander Thiel, a partner at McKinsey & Company. “As the global population continues to expand, and more people adopt healthier and more active lifestyles, brands, retailers, and manufacturers have chances to grow. But this potential should be contrasted with continuing political and economic unpredictability, which is playing out in almost every region globally.”

CIN’s not yet pored through the full report, but the generational-related observations ring true. Much has been made of the opportunity that eBikes provide in opening the cycling market to older consumers which also appears to be a wise bet with disposable income appearing to be freed up for such consumers. Perhaps related to the WHO’s statistics, there have been observations that kids bikes sales and BMX sales are on the wane, leading to some anxiety about bringing new young riders to the market.

You can read the full “Sporting Goods 2024: Time to Move” report here.