Where is the Bike Industry at?
As I have done for the last three years, I drove up to the long-running Sea Otter Classic last week. The event, held at Laguna Seca Raceway in Monterey, has been held every year since 1991. It’s a combination bike racing festival, trade show and community gathering for all kinds of bikes. I like just walking around the event and taking it all in. I also enjoy riding in some of the races if possible. Between observing things and talking to bike industry leaders, you can get a picture of what is happening in the ecosystem. Here’s what I learned this year:
Trade Tariffs — These were like a black cloud hanging over the event. From a distance, you could look across the venue and it seemed normal: thousands of cyclists, booths, brands — but when you got leaders one on one, you understood how devastating the tariffs are. I met with dozens of bike industry CEOs and leadership teams last week, and opposition to and anger with Trump’s reckless trade policies was unanimous. It’s not only the tariffs themselves but also the drunken, on again/off again nature of them that is preventing many businesses in America (not just bikes) from doing any planning for the future. Bike brands are truly paralyzed because they have no idea what they will be paying for their goods moving forward. And the tariffs come after three years of the worst recession the bike industry has ever had. Many brands were already on the ropes. It’s going to be a very, very difficult few years for bike businesses.
Brand America — You can’t deny that American brands selling abroad, particularly in Europe, Asia and Canada — are facing stiff headwinds right now. The collective anger around the world towards the United States should not be underestimated. Any brand associated with our country — Nike, United Airlines, Ford, etc. — is going to have a hard time selling in those markets. And I believe bikes are no different. We’ll see this more clearly when publicly traded companies release their Q2 earnings in early July.
Technology — I’ve been writing about this for a couple years, but I did not see much new/interesting technology on display at Sea Otter. Most high performance bike frames are all made using the same pre-preg carbon fiber process, at the same Asian factories, with designs that are almost identical. The only thing differentiating them is the paint job. There were some interesting 3D Printed MTB frames and parts, but you’d have to know to look for them. They were not promoted at all. (Disclosure: I’m part of a 3D Printing technology business in the UK) It feels to me like there’s whitespace for brands to experiment with new & different ways to make frames that solve customer problems.
Duopoly — There are two brands — SRAM and Shimano — that dominate bike components around the world. I grew up riding the Italian brand Campagnolo, which, while it still technically exists, feels like a historical footnote at this point. I know people at both SRAM and Shimano, and they make fine products. I’ve used both extensively over the last 20 years. But would the entire ecosystem be healthier with some competition? The Classified shifting system is interesting, and there may be some other people doing interesting things. But never once in three days at Sea Otter did I hear anyone say, “Peter, you have to go see what these guys are doing.”
Diversity — I feel like a broken record here. The bike industry — both employees and customers — is too white and male. That category is only 30% of the American population, and the other 70% of our country is being mostly ignored by the bike world. This is not something that can be solved overnight by any single business. It will take collective energy over decades to overcome this. But it’s not impossible. I used to be in the running business, and I watched 5K races go from 25% female in 1990 to 57% female in 2015. Bikes could make similar progress if all of us commit to it.
Brand Energy — Where is the young, fresh energy around bike brands? I’m currently seeing the running world explode with innovative brands — Satisfy, Tracksmith, Bandit, Soar, etc. — and I ask myself why this isn’t happening in bikes. I do believe that Maap and Pas Normal Studios have some of this energy. But in the hardware category I don’t feel this, and there was very little creativity on display at Sea Otter that was inspiring. At least half of the brand booths at the event were just a tent with some bikes underneath. Can these brands not come up with something, anything, more interesting than that? Feels like many bike businesses don’t understand the importance of having a brand, a point of differentiation and a point of view.
Athletes — The first event of the Grand Prix gravel series took place on Thursday, and I was struck by how many pro athletes told me that the speeds were “insanely fast.” As is happening in European road racing, people seem to show up to the first races fitter and fitter each successive season. “Racing your way into shape” is no longer possible, and in any cycling discipline in 2025 — road, MTB, gravel — the fitness levels are exceptional, the fields are deep and the racing is very fast from the gun.
Overall it feels like the bike industry is in a flat spot right now. Part of that is due to circumstances beyond its control — unnecessary trade tariffs — but also the industry has stopped innovating, building diverse communities and building compelling brands. I look at the current landscape, and I smell opportunity. The time is ripe for some interesting businesses to enter the bicycle space and grab market share. Let’s see what happens over the rest of this year.
