✳️The Cost of Western States, and Changing Outdoor Participant

A Trailmix of news, opinion on the business of trail running

Hey pals 👋 - I finally have a break in the workload so we’re back (hopefully). Much to talk about, but we have a break down of Western States’ tax filings, the casualisation of the outdoor industry and the launch of Trailcon and trail running’s professional era. Hope you enjoy! - Matt

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The Cost of Western States

With it being Western States weekend, I thought I’d dive into their most recent Form 990 tax filings to put the growth of the event in perspective.

For many years the Western States’ revenue sat around $400K, mostly coming from race fees and charitable donations, some years in profit, others at a loss. In 2022, after they partnered with UTMB, their revenue increased to $804K off of a $200K increase in ‘contributions, gifts and grants’. Whilst not a for-profit enterprise, it’s a sizeable revenue for a race, granted not as large as Marathon du Mont Blanc, which is also happening this weekend and takes in 1.2M euros.

Despite this increase in revenue, their expenses for the year grew to $747K from $486K, putting their profit at $56K. ‘Race expenses’ often take up the bulk of outgoings, with the 2022 race costing $555K in total to put on. However two different line items tell a compelling story of the efforts Western States put into growing the race but also keeping it going.

One of the biggest expenses came from trail preservation at $133K which included a multi-year project with the US Forest service to re-route and improve 6 miles of the Western States Trail and the rebuild after Mosquito Fire burned 16 miles of the trail. At 14% of the total expenses, this demonstrates the potential impact a warming planet has on the sustainability of trail running race industry.

Whilst Form 990 filings are not as intricately detailed as an investor quarterly report, what we can gather is the growing cost of race day broadcasting which shot up from $62K in 2021 to $106K in 2022. Whilst this did have 291K views for the broadcast, it comes at a huge expense.

Some other notable findings:

• Craig Thornley’s $99K salary

• Race entry fees continue to generate around $150-200K per year

• The $23K investment in medical research in 2022

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Casualisation of the Outdoor Industry

What? The number of Americans that participate in outdoor activities has reached the highest its ever been at 175 million, but the frequency with which they go outdoors decreased by 11.5%, according the Outdoor industry Association’s 2023 report.

Why? Since the pandemic, the number of outdoor participants has grown by 15 million, driven by the mental health benefits of being outdoors and an diversifying audience, where women now make up the majority (51.5%) and over 65 year olds are the fastest growing age category.

Core decline - The frequency that Americans did some form of outdoor recreation per year declined to 62.5 outings from 70.5 in 2022. Additionally the frequency with which kids go outside is equally declining.

This pattern is also replicated in ultrarunning race data, where the number of races per participant has begun to decline since the start of the pandemic, according to the DUV.

The knock-on effects - the shifting demographics and usage patterns had implications for the outdoor specialty retailer industry which saw over half have decreases of 10% in revenue in 2023.

✳️ Matt’s Opinion: This report is great lesson in why you never mistake the headline figures for the full story. A growth of a customer base would typically be a great thing for an industry, but it only benefits those who are equipped to capitalise on it.

The long tail of people going outdoors is growing, but the short tail of ‘core’ outdoor users is declining. This stretching pattern of consumption, or casualisation beyond the stereotypical ‘core’ audience, means that brands have to reconsider how they position their products and vary their product mix.

For trail running, or running in it’s entirety, it means an industry that has long focused on ‘performance’ and functionality needs to consider how it can cater to audiences that are not running for competition, but as one analyst put it, running to ‘cope’.

Through this lens you can see why On and Hoka have thrived over the past year - refocusing parts of their portfolio on the casual, ‘lifestyle’ consumer, whilst maintaining a strong performance offering for the ‘core’ user.

These types of shifts are not uncommon, markets and audience base skews are often cyclical. What they reveal though is the weaknesses of speciality outdoor and running retailers who too often focus on the ‘core’ customer who is outdoors more than most. When that audience base declines, so too do their sales. They may look to their product mix or reformatting their store, but when you’re positioned for a corner of a market relying on customer loyalty and frequency of purchase, it puts you in a vulnerable position when audience appetites change.

All is not lost for specialty retailers or brands. This data should fuel brands to think of how they can cater to broader audiences to reduce their volatility in what is likely to be a rocky few years. For those building their 2025 brand plans, this is your sign to invest in broad-reach campaigns.

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Trail Running enters it’s Conference Era

🏢 What? Dylan Bowman, Doug Emslie, and Brendan Madigan have launched Trailcon, a new trail running conference.

The motivation - Trailcon was created to form an interdisciplinary forum for professionals and enthusiasts in the industry to discuss the future, away from the chaos of online discourse. Doug Emslie described the ambition to be the ‘Davos for trail running’.

In their own words:

“Accelerated growth and globalization has created a maturing market experiencing profound change. Rapid economic expansion has attracted mainstream media attention and investment from the world’s biggest brands. Simultaneously, it’s created important and often difficult questions for the global trail community to debate together. TrailCon is meant to create an open-minded, collaborative space for this debate to occur, forging a positive future for the industry and engaging stakeholders of all kinds.”

The layout - The event is positioned between Broken Arrow Skyrace and Western States’ race weekends to capture the interest and attendees that go to each event, simultaneously making Tahoe a new trail running regional hub.

This year the team are running a taster day of what Trailcon could be with a panel on the events, media and athletes side of the industry. The aim is to grow the conference to a multi-day affair once they understand interest and attendance.

✳️ Matt’s opinion - As I mentioned after UTMB week last year, trail running has needed a venue for the many back room/mountain side meetings that occurred across UTMB. I’m likely not the only one whose entire week last year was just filled with back-to-back meetings.

This is by no means the first attempt at a trail running conference. Mile & Stones started one in Annecy, The Running Show in the UK has a trail running stage and the US already has a Trail Running Conference. However none have captured the attention of the big players in the industry. For Trailcon to get the Poletti’s on their first outing shows the ambition and altitude they intend to be operating in.

The numerous conferences on the business of trail running and the slow rise of trail running commentary on LinkedIn signals the dawn of the sport’s professionalisation era, or its blazer’s and shorts epoch.

As a US conference, ultimately the attendance at the outset was limited to largely the US trail running population, however if this year’s taster is a success, undoubtably it can easily become a marker in the trail running calendar.

My one addition: add a marketing panel to event. Marketers across the industry i speak to crave a central place to learn from others in the trail running and outdoors industry. With few online resources to learn from, the current routine is reading general marketing industry case studies and thinking how it could indirectly apply to their day to day life. Not ideal.