While recognizing the need for better market research data, the European Outdoor Group (EOG) estimates that the specialist market for outdoor products grew last year by at least 2 to 3 percent on average in Europe to an approximate level of €6 billion, with many important groups such as Jack Wolfskin or The North Face posting double-digit increases, in spite of the economic crisis. The mass market and segments such as fishing tackle, hunting and snow sports are excluded from these estimates.

These estimates differ considerably from the figures recently provided by NPD Group, whose research is largely based on a consumer panel and includes snow sports and other previously mentioned categories. According to its data, which we published earlier, the broad European outdoor market declined by 1 percent to €14.1 billion.

The EOG, an organization to which all the major outdoor brands belong, is proposing a new methodology to generate better market data, and we are considering a comprehensive qualitative and quantitative study of the market, mainly intended to help companies to increase market penetration in each European country, including those where they already have a presence.

The EOG estimate was presented on the first day of the European OutDoor show in Friedrichshafen, which continues to grow: it is hosting 868 exhibitors, 7 percent more than one year ago and more than double the 416 companies that showed in 2000. Since then, the number of visitors has grown constantly, from 7,855 in 2000 to 19,300 last year.

While noting that outdoor activities are becoming more popular, fun and cool across all age groups for different reasons and with different motivations (more on this shortly), officials of the EOG indicated that price increases will be inevitable from the spring/summer 2011 collections. This is based on a survey of EOG members commissioned by the EOG to Profile Consultancy: 78.6 percent of the respondents said they could not absorb the additional cost of sourcing products from Asia, linked to currency changes, more expensive raw materials, higher labor and transportation costs. The factory cost increased were assessed at between 8 and 10 percent by 45.7 percent of the respondents and at between 10 and 15 percent by 25 percent of them.

These higher sourcing costs will not necessarily be passed on completely to retailers and to consumers, as 65.4 percent of the respondents said they would try to absorb only some of the added costs, partly by reducing their overheads or their margins or both. In our opinion, the brands that enjoy a stronger brand image, a higher position or a higher market share will be better able to pass on these costs, especially for new and innovative products.

Market research in other sectors has indicated that consumers may not be prepared to pay more for environmentally friendly textile products. Nevertheless, the EOG is making strong progress in the establishment of a universally acceptable Eco Index for materials, packaging, product manufacturing and assembly, transport and distribution, use, servicing and recyclability (end of life). One of the purposes of this index is to reassure the customer, who is confused by the numerous messages on sustainability emanating from individual firms and the existence of more than 340 different ecological labels.
The new Eco Index has been developed by the EOG in cooperation with the Outdoor Industries Association of the U.S. and with the support of the World Federation of the Sporting Goods Industry. Companies such as Adidas, The North Face or Wal-Mart are approving this initiative. All interested companies within and outside the EOG are invited in participating in the Beta testing phase of the index, scheduled to begin next month. The program will be launched at two breakfast meetings during the OutDoor show in Friedrichshafen tomorrow and Friday.