The Cycling Market Pedals Ahead in 2021

By Dirk Sorenson

Cycling equipment revenue grew by 15% to $8.5 billion in the 12 months ending July 2021, compared to the previous year. I’m seeing many comparisons being made to 2020, when the pandemic kicked into gear, which are mistakenly interpreting this slowdown as a signal of lowered interest in cycling. The reality is cycling equipment’s revenue growth between 2019 and 2020 was massive, and sustaining those levels would have required an expansion of both demand and supply that would have been impossible. I take the continued growth in cycling as a strong indication of an industry poised for long-term health.

Looking at the broader trend, comparing current sales to 2019, provides a clear picture of a sporting goods category benefitting from consumers being compelled to change behaviors. During the pandemic, we saw a surge in consumers purchasing goods to be active, outdoors, and socially connected. Essentially, consumers are adopting behaviors that will stick for the long haul and these behavioral changes bode well for cycling.

The result has been a dramatic growth in all major cycling equipment categories. The bicycles category is currently a $5.3 billion business, up 65% in the 12 months ending July 2021 compared to two years ago; bike accessories accounted for $903 million in revenue and grew 36%; parts reached $1.1 billion, up 31%; and helmets, shoes, and gloves hit $445 million, an increase of 20% compared to 2019 levels.

One of the analyses I find most interesting is to evaluate growth within the various bicycle types. Those areas of the market that achieved the highest growth rates over the two-year period indicate something about where future growth will occur in cycling. In the most recent 12 months, compared to two years ago, sales of mountain bikes increased 70%, children’s bikes rose 57%, and e-bikes grew by a whopping 240%, which made it the third largest cycling category in terms of sales revenue. This number is remarkable because it makes e-bikes a larger category than road bikes, which has traditionally been one of the biggest categories across all of cycling.

Speaking of road bikes, this segment also experienced remarkable growth, with revenue up 41% through July. Cross and gravel-road bikes were the growth engine for this category, with revenue increasing 109%, compared to two years ago.

When we compare the growing and slowing bike categories, two big themes emerge. First, bicycles that enable riders to enjoy cycling in a “non-threatening” manner are reaping success. Second, bike technology that helps riders overcome their own limitations is on the rise.

What do I mean by “non-threatening”?  Let’s consider these points. Gravel and mountain bikes appeal to consumers that seek utility and the safety of riding off trafficked streets. In talking with several retail managers, many of them note that these bikes provide consumers with a higher level of purchasing comfort. Many consumers are off put by bikes designed for a single purpose, as they are looking for that everyday ride. Performance bikes just don’t meet the needs of consumers who are looking for that sense of utility, Gravel and mountain bikes apparently do meet that need. The parallel I draw is the enormous interest Americans have with sports-utility vehicles. The designs provide the buyer with a sense of the unlimited versus the limited.

This limitlessness extends to e-bikes. The new and returning rider may be concerned with a range of objections to ride again – the big hill, the long ride, and keeping pace with faster riders are all relieved by pedal assist. And, once riders try an e-bike, most seem compelled by the fun of it.

With such abundant growth in cycling, finding cautionary notes is challenging. That said, manufacturers and retailers should consider evaluating the areas where growth is only in the single digits compared to 2020. Comparing present market sizes to 2020 levels is a good indication of categories that had short term gains due to the pandemic, and may now be shifting back to pre-pandemic purchasing patterns. For example, sales of 12-inch children’s bicycles have decreased by -6% from 2020 levels. This retraction in sales growth is likely a result of more normal activities for kids—that were on pause last year—being available once again. We need to remember that parents were purchasing a range of goods to get their kids out the door and active while so many of their regular activities were put on hold. With more options available once again, the demand for smaller children’s bikes is down.

Other categories that have now slowed dramatically from the highs seen last year include transit and fitness bikes, with revenue up by only 1% in the last 12 months, compared to the year prior, and cruiser bikes, which are only 3% higher. The takeaway here is that bikes for the family may have been only a temporary surge caused by families looking for ways to escape lockdown.

Within the cycling industry, both at the retail and manufacturing levels, concerns of inventory availability dominate conversation but, to me, the shift in demand for family cycling may be the largest long-term conversation to be had. Finding ways to engage families and younger people in cycling activity can provide a long-term and sustainable growth opportunity. Without thinking further down the road, the industry could squander the once-in-a-generation growth that occurred last year.

In my experience speaking with retailers, many cite hiring mechanics and floor staff to be as much of a challenge as obtaining product for sale in 2021. How the industry addresses staff shortages may in fact be the bigger influence on long-term growth. Consumers are seeking expertise right now — along with answers to their questions — as much as they are seeking product.  And it is those answers that might invigorate and continue the growth we are seeing now for years to come.

Dirk Sorenson is the Executive Director, Industry Analyst, Sports for NPD –