Sporting Goods Manufacturing
Companies in this industry manufacture sporting and athletic goods, including sports and fitness equipment. Major companies include Acushnet Holdings, BRG Sports, Callaway Golf, ICON Health & Fitness, and Russell Athletic (all based in the US), as well as Amer Sports (Finland), Decathlon (France), Head (Netherlands), and Mizuno (Japan).
The global market for sporting and athletic goods has a value of $110.33 billion in 2021 at a 14.7% CAGR, the market is expected to reach about $143 billion in 2025 at a 7% CAGR. The growth is mainly due to the COVID-19 impact recovery and the operations rearrangement of the companies, according to Globe Newswire. The largest region in the global sporting and athletic goods is Asia Pacific with 48% market value in 2020. The second largest region is Western Europe with 22% market value.
The US sporting goods manufacturing industry includes about 1,600 establishments (single-location companies or units of multi-location companies) with combined annual revenue of about $10 billion. Manufacturing of athletic apparel and footwear, which is not included in the industry, is covered in separate industry profiles.
Sporting goods manufacturers align their distribution, sales, and marketing strategies with the demands and trends of the sporting retail section. Major big-box chains have gained leverage over suppliers as they acquire smaller retailers that have fallen into bankruptcy. Large sports equipment manufacturers are increasingly selling products directly to consumers through their own websites, which allow them to offer lower prices or reap higher profit margins by bypassing retailers. The industry competes with vertically integrated retailers that manufacture and sell their own products; companies may also lose business to outlets that sell used sports equipment.
Global trade policy has a significant impact on the industry, as production has increased dramatically in countries with lower wages and fewer regulations. Many US sporting goods companies outsource production and purchase materials from overseas suppliers to minimize costs. China, Taiwan, Mexico, and Vietnam are the usual sources of imported sports equipment while Canada, Japan, the UK, and Mexico are the typical export destinations.
The primary demand drivers for sporting goods are consumer income and demographic trends. The profitability of individual companies is determined by efficient manufacturing and effective marketing. Large companies enjoy economies of scale in purchasing and brand promotion and often offer a wide range of products. Small companies can compete effectively by offering specialized or unique products that interest enthusiasts. The US industry is concentrated: the 50 largest companies account for about 70% of industry revenue.
Retail Strategy — Competition in the sporting goods manufacturing industry largely hinges on a company's ability to adjust to ongoing turmoil and consolidation in the sporting goods retail sector. Companies that supply major chains have significant advantages over those that primarily sell through small and midsize brick-and-mortar retailers, many of which are struggling to stay afloat. Direct-to-consumer e-commerce is becoming a key sales channel and profit driver for manufacturers.
R&D — Due to short product life cycles and ever-changing consumer trends, sporting goods companies must invest heavily in R&D to remain competitive. Technology advancements have streamlined the R&D process, enabling faster production of prototypes and customized athletic gear. Many companies are using new types of nanomaterials to create sports equipment that is lighter-weight but more durable than products made from conventional plastics. The industry is also responding to rising consumer demand for equipment outfitted with sensors that track biometrics and other fitness data.
Tracking Global Trends — Sporting goods manufacturers identify new sales opportunities by tracking the popularity of different sports in markets around the world. For example, global sales of baseball equipment are rising as a result of the sport's growing international profile and efforts to increase participation among younger players. Emerging markets, especially within the Asia/Pacific region, will play a key role as producers look to grow beyond the largely saturated North American market.
Companies to Watch:
Decathlon designs, manufactures, and sells athletic equipment and apparel for some 70 sports, including cycling, hiking, hunting, basketball, swimming, running, soccer, and tennis. The French company owns about 20 private-label brands and operates more than 1,000 retail stores in more than 45 countries.
Russell is a vertically integrated manufacturer that makes sports balls and equipment in addition to apparel and uniforms. Its Spalding unit boasts the official basketball of the NBA, and the company also offers gear for football, basketball, and baseball under the Bike name.
Amer Sports makes balls for tennis, golf, and team sports under the Wilson brand, as well as several lines of products for snow sports and general fitness. The Finland-based company also manufactures Precor home and commercial fitness equipment.
Products, Operations & Technology
Major product categories for manufacturing include gym and exercise equipment account for about 30% of the industry revenue; golf equipment account for
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms