A look at what fully stocked shelves and rising production costs might mean for paddlesports.
Despite the turbulence of the past two years, paddlesports is poised to continue a positive trajectory. For the savvy shopper, there might be deals on the horizon.
The past three years have seen continued growth in paddlesports and solidified our position as an industry capable of overcoming challenge after challenge. The uncertainties of Covid were met with ongoing global turbulence. Zero Covid regulations continued in China even as the rest of the world returned to pre-pandemic norms. Russia invaded Ukraine, contributing to rising prices and energy and labor shortages, driving production costs up and straining finances. The United Kingdom cycled through prime ministers and left the European Union while American politics became increasingly divisive. When the industry saw its biggest increase in popularity in nearly two decades, retailers around the globe faced the surge in demand with empty shelves. We enter 2023 with fully stocked shelves, yet demand for paddlesport products is decreasing from pandemic highs, and production costs and inflation remain high. Nevertheless, a hesitant optimism for the future continues to buoy the industry.
Notably, for the paddlesport industry, constraints on supply appear to be easing, even if they are not yet back to the pre-pandemic normal, writes JP Morgan. “For example, Shanghai-to-Los Angeles ocean freight rates are down 80% from the beginning of the year and 83% from the peak in the second quarter of 2021, but still 25% above the 2010-19 average.” Shipping rates are predicted to normalize by 2024 and will continue to drop throughout the next decade. (https://www.porttechnology.org/)
Inflation skyrocketed in 2022, reaching its highest rate in decades and raising the cost of living essentials, alongside luxury and leisure items, in nearly every country worldwide. As the year came to a close, inflation rates began to stabilize. Predictions call for inflation rates to continue declining globally throughout 2023 but remain painfully high overall. Consumers feel the pressure as they face rising rent, food, and energy costs. With many rethinking their spending habits, where does this leave paddlesports?
In the short term, do not be surprised to see sales in the paddlesport industry that, while not record highs, will not be record lows, either. “Covid boomers,” newcomers who discovered paddlesports during lockdowns, have increased user numbers, and many are about ready for an equipment upgrade. Borders are open, but travel remains costly, and low-cost activities close to home maintain appeal.
Though energy and raw materials will remain expensive for some time, keeping production costs high, brands have used the last two years to revamp and regroup, working towards products that are more sustainable and more efficient and environmentally-friendly production practices. Many have hinted at projects in the works, and we can expect to see industry-wide releases of new or updated products in the next few years.
“In the short term, do not be surprised to see sales in the paddlesport industry that, while not record highs, will not be record lows, either.”
China lifting Zero Covid restrictions may bring the biggest significant changes for 2023, alleviating the strains and pressures on the supply chains and labor forces. As conditions in China normalize, it may re-open the market to brands reliant on out-of-house production and open new markets altogether in the long run.
In China, the middle class is on the rise, with 163 million currently representing nearly 14% of the country’s population. Stringent lockdowns have left people frustrated and seeking relief from rules, testing, and the city. With a public sector already pledging to increase the infrastructure and resources needed for outdoor activities and a growing youth and social media culture, we can anticipate a boom of interest in outdoor sports as Covid normalizes.
While the market won’t maintain its pandemic growth rate in Europe and North America, predictions call for it to remain above pre-pandemic norms. It might not be on the forefront of consumer minds, but the next year or two will continue to be an excellent time to be involved in paddlesports. With dropping demand, overstocked shelves, and more new products on the way, don’t be surprised to see a sale or two in the near future—and if we’re lucky, prices that will, at the very least, hold steady.
While we remain optimistic, if the past three years have taught us anything, it’s that nothing is guaranteed. The best way to support our industry remains what it has always been. For consumers, it is buying smart, but buying, nonetheless. For manufacturers, it means producing smart, bringing products to market that people need that show genuine improvements from year to year. There are still difficult times ahead, and people likely won’t buy what they don’t need. It is up to us to keep paddlesports appealing and feeling essential to people’s lives, to remind and sell not just products but the escape getting out on the water offers and the version of ourselves paddlesports allows us to be.