Industry Consolidation And Homogenization

Jim Shepherd, publisher of the Outdoor Wires, is at the Archery Trade Association show this week in Louisville, Kentucky. He made this observation about consolidation within the archery and hunting industries. He points out that it is not only those industries who are consolidating but it is widespread across the fishing, hunting, shooting, and outdoor industries.

Some news releases we’ve distributed this week have again pointed out something that isn’t unique to archery -consolidation is happening across the industry.

From nutritional supplements to tree stands, scents and broadheads, archery is seeing to the absorption of smaller companies into larger ones.

For many small businesses, it’s a matter of survival. The business climate’s tough right now, and if you’re a company with little capitalization and no margin of error, adding your niched products into a larger operation makes sense. These businesses began because their owners were passionate about the sport, and saw a real need for a product that wasn’t there. With very few exceptions, a single-product or limited-product business isn’t viable.

That’s the part of consolidation that concerns me most.

Large companies with fixed operating costs look at new products differently that an entrepreneur who’s willing to bootstrap a good product to market.

If potential sales volumes or margin are in question, most big companies tend to take a pass on the concept. That number-centric approach doesn’t encourage innovation.

When innovation dies, homogenization is the best possible outcome.

And homogenization doesn’t drive participation. Nothing other than oxygen appeals to everyone.

So while we’re looking at the latest-and-greatest from the major players, we’ll be prowling the smaller exhibits looking for those undiscovered innovators. We want to encourage them.

I wholeheartedly agree with Jim - the little guys can come up with the innovative stuff that is really interesting. Moreover, new cool stuff is what pulls people in and that applies to both the old and young.

 This is why I try to spend at least a day and a half at SHOT Show looking around the lower level which is where the new and younger companies usually end up.