Industry Report: Gear Mfrs. Discuss Reshoring at Outdoor Retailer

As the outdoor industry convened in Colorado, CompanyWeek talked with manufacturers about what they need to make more products in the U.S.

Few industries feel the demand to bring back manufacturing to the U.S. as directly as the outdoor industry. Both companies and consumers want their products to reflect their passions -- but everybody still wants the best price.

That's just one of the reasons companies continue to produce products overseas where gigantic factories with tens of thousands of workers can take on large project orders without blinking. But talking with the leaders of new and old companies at the 2018 Outdoor Retailer + Snow Show -- the first time the annual industry confab was staged in Denver -- reveals a plethora of problems that make reshoring manufacturing difficult.

When Black Diamond announced that it planned to reshore manufacturing of carabiners and climbing tools to the U.S. in 2013, it was a surprise.Five yers later, a stroll through the company's OR booth reveals Black Diamond is making some products in the U.S., but it's still making a lot overseas. Company representatives say that some production went back overseas to maintain quality, remain competitive, and to allow for expanded product lines.

Other companies are taking a hybrid approach to international and domestic manufacturing. Boulder's RovR Products, a startup making rugged coolers that were recently recognized at the National Hardware Show for best new tailgating product, is making coolers in the U.S. for direct-to-consumer sales, but brought manufacturing to China to expand into retail distribution. "It's very unusual to be able to manufacture in the U.S. and sell wholesale," explains RovR President Tom DeFrancia. "You can do it online because you have more margin. If I was just direct selling in the U.S., it wouldn't be a problem."

Moving manufacturing overseas has allowed him to compete on wholesale costs with other cooler manufacturers, and RovR will soon be in REI, Sportsman's Warehouse, and Cabela's. Still, DeFrancia offers a Colorado-made cooler on his site. "I have a lot of investments in Colorado and am from Colorado, and I take a lot of pride in that," he explains. "I wanted to continue to offer Colorado products, so we decided to continue manufacturing here."

On manufacturing in the U.S., DeFrancia says, "You have to be efficient. You have to really know what you're doing. Costs hide in every corner." He notes that RovR's coolers use a lot of custom parts, which also are cost-prohibitive to make in the U.S.

"I'd love to have product made in America. I've vigorously pursued made in America a few times without success," says John Elsberry, owner of Crazy Creek Products. The Red Lodge, Montana-based company made its comfortable chairs in the U.S. from 1987 to about 1997, he says. "Over the course of that time, which was in our greatest growth period, we had people start copying our product in China. All of a sudden, we couldn't be competitive being made here."

To bring manufacturing back to the U.S., Elsberry would have to automate. "I can't compete in the sewing market in the United States," he says. "From a cost point of view, there's no competition. Coming up with automated technology for design would give me the opportunity."

While there's talk at the federal level about bringing manufacturing back, Elsberry doesn't think it's being done beneficially. "Most of the talk is punitive," he says. "It's how we can we punish those that manufacturer offshore via tariff or other types of restriction, like border access taxes. Those sorts of things are very difficult for small companies and have a much broader reach than people who talk that way expect."

There's also the problem of infrastructure and scale in the U.S., observes Rob Coughlin, senior vice president of sales and product development at Two Harbors, Minnesota-based Granite Gear. "There are some great sewing floors in America, but they're very small sewing floors," he says. "We work with factories in southern China and Vietnam that are amongst the best factories in the world. These are considered small factories and they have 400 to 500 sewers. I know a factory that has 30,000 sewers."

Granite Gear does make some products in the U.S., mainly highly technical, expensive packs and equipment designed for the military. For its award-winning consumer backpack, the Crown, Coughlin says it would cost about $450 to make in the U.S. versus $200 overseas. "The American consumer, as much as they want to pay for an American-made product, they don't want to pay more for it," he says. "There's the rub."

For Granite Gear to bring cost-effective manufacturing back to the U.S., Coughlin says, would require a lot, including federal infrastructure and machinery investments. "We are a small company, we don't have a lot of extra funds for something like that," he says.

Mountainsmith President Jason Getzel thinks sourcing is one of the biggest challenges his Golden, Colorado-based company would face with reshoring. "The longstanding nature of all the relationships we've had overseas for all the parts, textiles, things that go into production, it isn't a network that we have very well established domestically," he says.

If Mountainsmith were to move some production to the U.S., the sourcing would likely fall to the product and design team, Getzel adds. "There's a lot of bandwidth taken up to cobbled together all the components to do a production run, whereas it's part of the program over there."

But that could change: Mountainsmith's parent company, Blackstone Investment Group, recently purchased a sewing and manufacturing facility in Seattle. It is currently home to the production for Mountainsmith's sister companies, Haiku and the Youngstown Glove Company.

Getzel says the technicality and precision involved with sewing and manufacturing gloves could translate well to technical backpacks. "There's been a bit of an influx of conversation between our team and the folks up in Seattle to start to bring some of our styles for counter-sampling, for pricing and costing and patterning," he explains. "There could be something U.S.-made in the next six to 12 months available again." Getzel hints that such a product could coincide with Mountainsmith's 40th anniversary in 2019.

Denver's Topo Designs has also adopted a hybrid domestic/overseas manufacturing strategy, making some backpacks and clothes in Colorado while moving production of more technical pieces to Vietnam as the company expands its catalog.

"We have been able to build a system for ourselves here that allows us to make some amazing things and gives us the flexibility and hands-on experience that can make a really great product," says Topo co-founder Jedd Rose. "There are other pieces that we make which are just much harder for us to find that same skill set and resource in a consistent way here in the U.S., so we have found some very talented partners in other areas of the world to work with that are set up to be consistent and scalable in other ways."

To catalyze U.S. manufacturing, Rose echos many of his peers' sentiments. "It is definitely a big system type of change," he explains. "We focus on products that are cut and sewn, so having that as a widespread skill set for people here would be the key. There just aren't a ton of people in the U.S. that are in that field or are looking to get into the field. . . . A byproduct of that is that there are limited large production facilities in place that can build a product under one roof, so it becomes expensive, time-consuming, and unreliable to try and daisy-chain many of the tasks together for smaller companies."

But Rose remains pragmatic. "The good news is that there are specific types of products that can be done well here in the U.S., because the systems are longstanding or there has been enough demand to build it on a large scale, things like T-shirts, socks, some wool pieces, or, in our case, great backpacks," he says. "The limitation is finding those systems and working within the confines that lie within them."

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