Weathering the Drought

There is a certain optimism that hangs in the air now that October is fast approaching. The temperature has cooled, leaves are turning red and snow is already accumulating in the mountains. Every year, signs of the changing seasons bring a sudden need for snow sport enthusiasts to urgently dial in their gear to be ready the instant the first skiable snow falls.

Skiers may be chomping at the bit more than usual this season because last year was such a disappointment. From December 2011 onward, the ground was uncooperatively warm and dry. Season-long snowpack levels were recorded as low as 30 percent below average in some places. The National Oceanic and Atmospheric Administration reported that temperatures from October 2011 through March 2012 were 3.8 degrees Fahrenheit above the norm, the second-warmest winter on record for the contiguous U.S.

It’s not unusual for some pockets of the country to have poor snow while others areas get dumped on. Last season was unique because snow was absent almost everywhere, and particularly so in the eastern half of the country. Manmade ski loops often provided the only skiing to be had. Major races got canceled. National championships in the U.S. and Canada relied on premade stockpiles to cover their courses. The inconvenience underscored the reality that this sport depends on a force of nature beyond any immediate control.

This fact is never far from the minds of people in the business of selling skis. Low snowfall is disappointing for consumers, but for the ski industry it dictates the bottom line at the end of the year, and 2012 was no exception.

“The reality is that we’re farmers to a certain extent,” said Boulder Nordic Sport owner Nathan Schultz. “If the snow doesn’t come, then we don’t get crops.”

This may come as a surprise to the faithful and dedicated members of the ski community, who will find a way to ski no matter what. But no matter how committed that group is to having the best and newest equipment to race on, the majority of the ski market is made up of a recreational demographic.

People in the U.S. who put on cross-country skis last season went out an average of only nine times over the course of the winter months, according to an annual study commissioned by SnowSports Industries America (SIA). That average is driven by a large number of people whose decision to buy skis is heavily influenced by the presence or absence of snow out their front door. In the absence of snow last winter, fewer skis were sold and used.

“The dedicated consumers will buy product,” said Peter Ashley, vice president of Fischer Sports USA. “It’s the recreational area where the industry is really suffering.”

Ashley estimates that as much as 75 percent of Fischer’s U.S. sales are recreational skis, and 60 percent of his business comes from the populous Midwest and Eastern regions. It is this fact that, when combined with poor snow, can wreak havoc on the ski industry.

“The recreational skiers won’t buy anything until they actually see snow,” Ashley said. “Racing gets a lot of PR, but when it comes down to actual dollars and units, the recreational, junior and backcountry business — that’s the majority of the business. And I’m the market leader for racing … So when the recreational skier doesn’t ski: ouch. It hurts.

“When you have no snow in the Midwest, and very little to marginal snow in the East, you’re toast. And that’s what happened this winter.”

SIA, the non-profit trade organization that keeps track of annual market and participation data, reported in June that retail sales across all winter sports were down 12 percent in units from 2011. The nordic corner of the market fared particularly poorly, ending the season down 29 percent in units sold and down 26 percent in dollars. The numbers don’t lie: when it doesn’t snow, people generally don’t buy skis.

“No matter what you do that element will always be a large factor in what your end results are,” Schultz said. “Which is hard, when something is out of your control and can have such a large effect on you.”

What does this mean for the ski industry? It depends on whom you ask. Retailers and manufacturers both took a hit. Their losses were compounded by the relatively exceptional snowfall that came two winters ago. Sales were so good that year that ski shops ordered an unusually high number of skis in anticipation of similar growth the following winter. Then, when it hardly snowed all season, that equipment stayed on retail floors.

“From my perspective it was hard because we ended up with way more inventory than we needed, so trying to pay all the bills at the end of the year was really tough,” Schultz said.

For vendors, any good snowfall and associated sales that might come next winter will be tempered by inventory carrying over from last year. With so much equipment already filling retail stock rooms, shops won’t need to reorder skis until a later point in the season than usual.

Beyond companies like Fischer and BNS, diminished sales last year translates into reduced spending on promotion and sponsorships this year.

“None of us have the resources we had a year ago,” Ashley said. “There for sure is going to be some trickle-down effect to paid advertising, web promotions, athlete sponsorships, race sponsorships. …  As an industry we’re not going to be able to do a lot of things that we should be doing, but you just can’t when you have the lack of sales that we do.”

There are two major metrics that SIA studies to measure the health of the ski industry every year: sales are one of them, and the other is participation. The sales decline paints a subdued picture of the state of the industry, but nationwide participation data from tells a more nuanced, even optimistic story.

People skied less than the year before, but the cross-country subset proved to be more resilient when compared to other snow sports. SIA reported that 4.3 million people cross-country skied last winter, 4.7 percent fewer than the previous year. By comparison, alpine ski participation went down 11.3 percent and snowboarding decreased 7.5 percent. Nordic enthusiasts may have only skied nine days on average, but this figure led the way for the industry; downhill skiers only skied 7.4 days while snowboarders went out an average of eight times last season.

“Cross-country skiers are a pretty dedicated group,” said SIA research director Kelly Davis. “You don’t get a lot of people showing up to cross-country ski in their jeans for the first time because they think it’s going to be cool. When I look at the numbers and I see cross-country survived this season in fairly good shape in terms of [participation] numbers, that tells me that cross-country is pretty core.”

It has such a devoted core that about a third of the people who skied last season did so out their own door or on ungroomed, free trail systems. While this is good for participation, it means ski areas have to work harder to attract business.

For the few ski areas that actually lucked into decent snow last winter, the biggest challenge was communicating to the broader public that it was there. The Jackson Ski Touring Center in Jackson, N.H., had a decent, if abbreviated, season. Once it got snow, Jackson had 150-plus kilometers of good skiing; the problem was that nobody knew about it.

“Certainly snow and weather is a heavy influencer of what’s going on, but frequently it’s the perception of snow versus the snow itself,” said Thom Perkins, Jackson’s executive director. “With four inches we can provide 40 k of good or great skiing. That’s not a lot to ask. The problem is Boston, which received nine inches of snow last winter. It’s a matter of mindset.”

Most of Jackson’s visitors come from the Massachusetts city, and if Bostonians don’t see snow on the ground, they’ll believe the same thing to be true on the slopes nearby. The industry calls this ‘backyard syndrome,’ and cross-country areas suffer when the perception of snow isn’t there.

For Jackson, 35,000 skier-days would be “a comfy number” for the season; it brought in just over 28,000. This being the case, Perkins said, “We’re not running scared.” Next winter will be his 36th year in the ski business, and he’s weathered bad seasons before. In his experience, if next year brings good snow, the industry will bounce back.

He’s not the only one that feels that way.

“It’s not like people don’t want to go skiing,” Ashley said. “Cross-country is the perfect sport for the economic times. It’s relatively inexpensive, it’s a family sport, it’s a social sport, you don’t have to go a long way to go skiing. All those things are perfect for what’s going on now. … This is not the end of the world. It’s going to snow, we’ve survived this before I don’t know how many times, and none of us are going away.”