The economy's on ice and snow sports have skidded off the rails, but Never Summer is riding high
Tim Canaday keeps an old wooden snowboard in his office at the Never Summer Industries factory as a reminder. The board, fit for a history museum, has rubber straps for bindings and metal fins bolted to the tail and midsection, to keep it steady in deep powder. He constructed the board in 1983 for his tenth-grade wood shop class at Rocky Mountain High School in Fort Collins, and he's been thinking about how to build better and better boards ever since.
After Tim made that prototype, he and his older brother, Tracey, operated Swift Snowboards out of their parents' garage for two years, shaping the boards and then testing them at places like Berthoud Pass and Ski Cooper, some of the first ski areas to allow the newfangled contraptions on their slopes. In the parking lots at the base of the mountains, they'd sell their boards — painted with big, swooping "S" logos — out of the trunk of their car. Then, as now, Jake Burton dominated the market with his Burlington, Vermont-based Burton Snowboards, but the Canaday brothers saw an opportunity to make their own tracks as a Colorado company.
"We were skiers when we were little kids, going up to Winter Park and Mary Jane with our family, and then one day a friend's older brother took us snowboarding on the back hills at Berthoud Pass," Tracey remembers. "We were hooked, and we started building our own boards pretty much the next day. I don't think either of us ever skied again after that first day, now that I think about it."
When the brothers made their way out to California for school and work, they took up surfing and let their fledgling snowboard business lapse. But then in 1990, while taking some runs at Snow Summit for old time's sake, they happened upon a small snowboard trade show at the base and realized that an entire industry was blowing up without them.
"There was so much attitude and so many kooks in the business at that time, and we were like, 'Damn, we've got to start another snowboard company and do this thing right,'" Tim recalls. He and Tracey returned to Colorado the following year and founded Never Summer Industries, named for the Rocky Mountain range they'd tromped around as kids, hunting and camping with their dad. "Never Summer was basically born out of the simple realization of that day: 'We can do it better than these chumps,'" Tim says. "We put our heads together and decided we were going to move back to Colorado, because where else would you want to be if you're starting a snowboard company?"
This week, SnowSports Industries America brings its SIA Snow Show to Colorado because, after 37 years in Las Vegas, its organizers apparently had the same realization as the Canaday brothers: If the snow sports industry is your game, where else would you want to be?
The SIA Snow Show, which runs January 28 through January 31 at the Colorado Convention Center, is the biggest and most important trade show for the $3 billion snow sports industry, with nearly 800 brands vying for the attention of retail buyers from around the world. The stakes are high: Tracey Canaday estimates he'll write orders for about 80 percent of the company's annual snowboard sales this weekend.
"I think a lot of people in the industry see leaving Las Vegas and coming to Denver as a sign that the party's over, and maybe that's a good thing," Tracey says. "Vegas is a great place to have a show, for obvious reasons, but I would love for it to work and be successful here in Colorado. It makes sense on a lot of different levels to have the SIA show here. It's a lot cheaper for our company, for one thing! But it's also the perfect place for the snow sports industry to get down to business."
Denver is the top urban market for snow sports equipment, according to SIA, and 107 of SIA's 620 members are based in Colorado. SIA estimates that one in five Colorado residents — approximately 730,000 people — participate in snow sports. And Colorado ski resorts reported 11.9 million visits last season, more than 20 percent of the U.S. total of 57.4 million ski/ride days. "Frankly, I'm not sure how they ever got away with having this thing in Vegas," Tracey says.
Still, snagging SIA was a coup: It's the biggest trade show booking yet for Visit Denver, the city's convention and visitors' bureau, projected to pour $352 million into the city over the life of the eleven-year contract. Show attendance is expected to be around 20,000 this year, and downtown hotels, bars, restaurants, strip clubs and other businesses are bracing for an epic weekend. Colorado's 26 ski resorts are also hoping to reap some of the benefits of having the entire snow sports industry in town, and many of the mountains are partnering with bars near the convention center for Visit Denver's "World's Largest Après Ski + Ride Party," offering discount lift ticket and season pass promotions.
Unfortunately, the convention comes to Colorado in the middle of a recession that has hit this industry particularly hard. Consumer purchases at snow sports retailers last year were at the lowest level in at least seven years, according to SIA's own numbers. Through November 2009, Internet sales of snowboards were up 40.88 percent, but overall snowboard sales were down by 10.42 percent, according to Kelly Davis, director of research for SIA.
Just about every company in the business is hurting. Just about every company but Never Summer, that is.
"Overall, the snowboard category is taking a serious hit this season and most brands' sales are down," Davis says. Tracking the industry's trends is her full-time job, and she's been fielding some tough phone calls from reporters with gloom-and-doom story assignments this week. But she brightens at the mention of Tim and Tracey Canaday.
"Never Summer's season-to-date sales through November were up 33 percent in units and 41 percent in dollars sold through November," Davis says. "We expect to see at least 20 percent growth for Never Summer boards through the 2009-2010 season. They are going to beat the rest of the category in percentage growth by a mile if their growth rate holds."
Never Summer is having its best year ever — the third in a string of best years ever, each outpacing the previous year by as much as 20 percent. It's now one of the ten best-selling snowboard manufacturers in the country, according to Davis, growing at a rate that's the mirror opposite of the industry's overall decline. Last year the Canadays moved 13,000 snowboards.
"In a tough economy, you really need to have something unique to sell," Tracey says. "Retailers are buying conservatively, and consumers aren't going to shell out for something new unless you're offering something that is going to transform the way they snowboard and make snowboarding a whole lot more fun. We hit it right on the head with our new rocker-camber designs, and the timing couldn't have been better."
Sparks are flying inside the Never Summer factory on Colorado Boulevard, just north of I-70, where the Canadays and their crew of forty workers are sharpening edges and putting finishing touches on show boards from the 2010-2011 line to take to SIA. The trade show is where buyers will get their first glimpse of next season's product, and for the third year in a row, Never Summer plans to have exactly what the buyers are looking for: a fresh take on the rocker-camber hybrids that have shaken up the industry.
The terms "rocker" and "camber" refer to the curve down the length of a snowboard's profile. In the simplest terms, a rocker is a smiling snowboard and a cambered board is a frowning one. And that about sums up how the market has responded to the new designs: Rocker is the rock star, and camber is old news.
The snowboard industry moves fast, and its core consumers stay up on the latest trends, so retailers who gambled wrong at previous SIA shows may have been left with a lot of unsold boards. Last year, even the new rockers weren't such a sure thing, with aggressive riders complaining that they felt "dead" despite all the hype. So this season's savvy shoppers aren't buying frowns or smiles, opting instead for hybrid designs like Never Summer's (patent pending) R.C. Technology, sort of a squiggly Charlie Brown grimace.
Never Summer's R.C. Technology boards have a rocker area between the bindings for the smooth, effortless ride snowboarders call "buttering," and camber areas out toward the tips to stabilize the boards at high speed, to help them spring in and out of turns and to give the boards extra pop for freestyle maneuvers and terrain park tricks. The design also helps beginning riders avoid catching an edge and doing a face plant beneath the chairlift. That means Never Summer can reach both ends of the market with the same boards, and they've been selling like hot cocoa at the base lodge on a cold winter morning.
Never Summer sells exclusively to snow sports specialty shops, with 18 international dealers and 362 accounts in the U.S. (81 in Colorado alone), and the retailers can't keep the boards in stock. Shops that sold out their Never Summer boards early in the season have been trying to order more to meet demand, but there aren't any more to be had: The Canadays sold out their entire production run for 2009-2010 and are now busy making next season's boards.
Tim and Tracey saw the rocker-camber hybrid trend coming: They got a heads-up from their team riders and local shop representatives, and also studied the feedback from their regular on-snow demos at local ski areas. They were able to respond quickly because they control every aspect of production at their Denver factory.
"It looks good on paper to get stuff done on the cheap in China, but it comes back to bite you in the ass when you realize you've given up control and you've given up the ability to change anything on the fly," Tim says. "I can take a new prototype from the drawing board to the snow in less than a week, get the new designs out to our team riders the next day for R&D, and then adjust accordingly. We're snowboarders, after all: When we see something coming up, we just lean into our edge and turn. In this case, it gave us a tremendous advantage. When we realized the new rocker-camber boards were going to blow everything else away, we halted production and switched our entire line over to the new design."
To keep its edge on the industry's crowded and slippery slopes, Never Summer has also been at the forefront with other innovations, including its Vario Powergrip Sidecut, which gives the boards a more effective edge through aggressive turns. Tim came up with the unorthodox idea — a straight edge between the bindings, a shallow sidecut radius near each binding, and a deeper sidecut radius out toward the board's tips — while tinkering in his factory's in-house carpentry shop. Although the cut looks a bit strange, it works as advertised — and it's the kind of detail most companies outsourcing their manufacturing wouldn't even bother with.
To float on top of the latest trends and technologies, the Canaday brothers must also strike the perfect balance between flexibility and rigidity, crafting boards to fit different rider profiles — size, age, riding style, riding conditions — and building them to weather the abuse of riders. "We're offering a three-year warranty in a business where our ideal customer is, by nature, a guy who beats the shit out of these things," Tim says. They splurge for high-tech and high-cost materials, such as custom-made Structural Top Surface (STS) Pretensioned Fiberglass sourced from Gordon Composites in Montrose, the same Colorado company that made the Gordon Royal archery bows they hunted with as kids.
"Tracey and I still do a lot of bow hunting together, and Gordon fiberglass is in the limb of every bow I've ever owned," Tim says. "They were one of our first suppliers, and once you have something that works, you don't get away from it. Fiberglass is a key component, one of the most important materials that goes into a snowboard, and we're using the most high-performance glass money can buy. It's why we're known for our durability and for our Cadillac ride, and it's what gives the board just the right amount of spring and pop for freestyle riding. The new boards stand up to anything else on the market."
The editors at Snowboard Magazine agreed, awarding Never Summer boards their top Excellence in Design honor this year. The magazine gave Platinum Pick status to Never Summer's Evo park/pipe freestyle board in its 2010 Buyers Guide, calling it a "precise powerhouse," an accolade that set the tone for the season.
Never Summer is our bestseller, and has been for the last three or four years," reports Bill Wright, owner of Wright Life in Fort Collins. His shop also carries snowboards made by Lib Tech, Arbor, Gnu, Bataleon, Stepchild and Burton, the brand that had been his strongest seller since he opened his shop in 1981. "In the end, it always comes down to 'Who makes the best product?' Nobody's going to buy from a local company just because it's a local company if they're not making the best thing, the most fun thing to ride. The bottom line is these guys make the best product out there. Each year we sell out, and that leaves people wanting more and knowing that they have to get on it as soon as the new product comes out. People aren't waiting until the end of the season to try to get a discount on overstock Never Summer boards like they do with other brands, so the boards hold their value."
Wright has been attending SIA since before snowboard vendors were added to the mix in the late '80s. He competed in some of the world's first snowboarding competitions, hosted by Ike Garst at the now-defunct Berthoud Pass ski area, and he prides himself on being one of the sport's earliest supporters as a specialty-shop retailer.
"We carried snowboards that very first winter we were open, back when you could ring Burton up and Jake Burton would answer the phone, get the order together and pack it and ship it out himself. Same thing with Tom Sims, from Sims Snowboards," Wright recalls. "Jake and Tom were inspiring guys, people you could justify taking a chance on. They built the entire sport and the entire industry. It's been phenomenal to see it all grow and to have some perspective on it — and to be able to take chances on some of the other new players."
Wright took a chance on two other entrepreneurs early on, selling some of the Canaday brothers' first Swift Snowboards on consignment. When Tim and Tracey set up shop as Never Summer, Wright's store was their first retail account. Now, he says, the brothers are taking the lead in the industry.
"When you go to a show like SIA as a shop owner, you walk the floor trying to get a sense of where the new energy is. You're always kind of looking for the new thing, the new technology or new company or new idea that's going to shake things up, and right now that company is Never Summer," Wright says. "As bad as the economy is, I think there's really a sense that there's opportunity in it, especially for the little guys. The big guys are more stressed than anybody right now, but for smaller shops and smaller companies, this is a chance to invent, to be creative and come in and build some new relationships. You have to go in with your expectations set appropriately, and you have to buy accordingly so you don't sink yourself, but I think a lot of buyers now are looking to companies like Never Summer for what's next."
What's next for Never Summer? With new industry attention on Never Summer and its surprising growth, the Canadays are facing some big question marks. How much brand recognition and brand loyalty have they engendered by establishing themselves as an innovative brand with a durable product? Is their growth rate sustainable now that other companies have adopted their innovations? Can they move beyond regional appeal to become a bigger player without sacrificing their strengths as a manufacturing company and small boutique brand?
Tim and Tracey are both family men now, and growing the business has new importance for them. Tracey has two sons — four-year-old Wyatt and two-year-old Troy — and his wife is expecting a little girl. Tim has a seven-year-old daughter, Olivia, and his ten-year-old son, Zachary, recently finished fourteen months of chemotherapy treatment to battle a brain tumor.
Any sibling rivalry between the brothers has long since been redirected toward their competitors. "We've got pretty different personalities, and we did have our teenage years where we were at each other's throats," Tim says. "But we've always had a passion for snowboarding, and it was always something we did together."
"Tim is the tinkerer," says Tracey. "Everything that is unique about a Never Summer snowboard is the direct result of my brother nerding out over every little detail, trying to improve on the snowboarding experience. He's obsessed."
Tim cuts in: "Tracey is the talker."
The brothers have used their differences to good advantage in the family business, with Tim overseeing engineering, design and production of the boards themselves and Tracey taking charge of sales, marketing and business strategy.
For a couple of punk snowboarders in an industry built on extremism, the Canadays have actually played it pretty conservatively, quietly diversifying their business over the last five years and trying to keep their growth rate steady. They've consciously undersupplied the market with their product to keep demand up and help guarantee high sell-through rates and value for the retailers they work with. And, to take pressure off their snowboard business, they've also taken on some new contract partners as an original equipment manufacturer for other brands that now outsource production to Never Summer Industries and act as purchasing companies.
Ben Anderson is founder and production manager of Icelantic, another Denver-based brand with big plans for SIA this year. The five-year-old ski company has nearly doubled in size every year since it entered the market with an innovative product — fat powder sticks, so fat people call them "boards," not "skis" — and Anderson quickly went from making a few boards for friends in his garage to selling 2,800 pairs from his 2009-2010 line. Those numbers aren't huge on their own, but the growth rate is unparalleled. This year his goal is to move 3,500 pairs.
"The biggest thing in this industry is earning the trust of the dealers and the end consumer," says Anderson, "especially on the ski side, where the industry has been driven by the major brands for so long. In order to break in, you really have to have something different to offer. For us to be able to say 'We've got a great design, we've got a durable product handmade here in Colorado, and because of that we're going to be able to offer you an extended warranty that beats anything else out there' — it's just huge. The consumers are starting to realize that they can get a lot more from some of these smaller brands, that they can back a company like Icelantic and be a part of something exciting that's happening."
Like the Canaday brothers, Anderson started out making his boards by hand, by himself. Being able to stamp his skis "Hand Made in Colorado, USA" is important to him both philosophically and from a marketing standpoint, so when demand for his product exploded beyond what he could handle on his own, he called Tim and Tracey to ask their advice. Never Summer has been manufacturing Icelantic skis at its Denver factory ever since.
"It's a perfect symbiotic relationship and a great balance, and there's nobody better to learn from around here when it comes to building and growing a solid and sustainable business," says Anderson. "They've been willing to accommodate our growth and grow with us, and from the manufacturing side, the durability they offer is just unprecedented. We've only had a handful of warranty returns ever. Like, really, I can count them on one hand. As a company, we're partly known for our graphics, the great Travis Parr art on our skis, but I tell people, 'It's just the cherry on top. These are bomb skis, and they're practically indestructible.' Believe me, I've tried. We put these things through hell around here."
SIA buyers looking into other brands with "Made in the U.S.A." and "Made in Colorado" labels will find that many trails now lead back to the Never Summer Industries factory.
"The real story when we're talking about Never Summer is that they're one of the few companies left in America still actually making things in America," says SIA's Davis, who estimates that less than 15 percent of the snowboards sold in the U.S. are made here. "It's sad, in its way, but it's just a reality: Low-cost manufacturing is something you almost have to have to compete. They've managed to find a good niche and can offer very high-quality manufacturing for companies looking to say they're made in America."
In addition to its relationship with Icelantic, Never Summer manufactures skis for Colorado companies Fat-ypus (Breckenridge), High Society Freeride (Snowmass), Rocky Mountain Underground (Dillon) and Enabling Technologies, a Denver company specializing in adaptive ski equipment for the disabled. Never Summer now also manufactures Hart Skis, a Minnesota company that was one of the first to pioneer metal-edge technology on skis, going head-to-head with Head Skis for industry dominance in the 1960s and '70s.
The Canadays also make Never Summer-branded snowboards with custom graphics for some of the specialty shops they work with, as well as promotional boards for clients ranging from Molson/Coors and Monster Energy to the U.S. Army. They launched a successful line of Never Summer longboard skateboards in 2007, allowing them to build on their existing distribution network, add accounts in new markets and open up a sideline summer sales season. The week before the SIA trade show, Never Summer sent representatives to the Surf Expo in Orlando, SIA's summer sports equivalent, to show off its 2010-2011 skateboards.
"We'll have to change the name to Never Sleep at this rate," Tracey jokes. "But those manufacturing partnerships and new Never Summer businesses have opened up new avenues for us, and they've allowed us to grow our snowboarding business in a way that makes sense without getting ahead of ourselves. You can almost count the number of U.S. factories doing good skis and snowboards on one hand, but a lot of companies are now wanting to come back and claim that U.S. manufacturing presence, and we've been able to capitalize on that and play to our strength as a manufacturer."
Mervin Manufacturing — makers of Gnu, Lib Tech and Roxy snowboards, and one of Never Summer's closest competitors — still operates its factory out of Carlsborg, Washington, and Signal Snowboards has a factory in Vista, California. Burton Snowboards still makes some of its boards in Vermont, but has mostly sent its operations overseas. With a handful of smaller exceptions, the rest of the snowboarding industry has exported itself to China.
Tim and Tracey see delicious irony in their own story: When they established what they hoped would be able to stay a made-in-Colorado snowboard company, their first major order came from a Japanese distributor. In Tim's telling, their first overseas deliveries sailed by their competitors' boxes coming in the opposite direction, on ships passing in the night.
"We ran our first full-page ad in Snowboarder magazine, and a few weeks later we get a fax from this guy, Fumito Nagahara, from Agate Corporation," Tim recalls. "Snowboarding was just blowing up in Japan, and all these guys over there wanted to be able to say they were the exclusive Japanese distributor for an American company. The 'Made in the U.S.A.' thing was very important to them, and so he wanted to come over and check out our facility. Well, our facility was a garage in Summit County at that point, no bigger than this office. We had one hydraulic press and a bunch of hand tools to show for ourselves. But we laid it all out, set up some prototype boards and put our game faces on. He comes over with a whole entourage, like four or five guys from his corporation, and two days later we'd penciled an agreement to do 650 units. He wired us something like 60 or 70 Gs to get started. It might has well have been $70 million, it was so big for us at that time. We'd done about twenty boards the year before, and that deal gave us the capital to buy the base grinders and basic equipment we needed to get to the next level. We did 3,000 units the year after that, and all of a sudden we've got a couple hundred thousand dollars. We found ourselves approaching Colorado shops saying, 'You've never heard of us, but we're big in Japan!'"
Never Summer considers the few companies that still manufacture snowboards in Colorado friends rather than competitors. Unity Snowboards, a small company in Dillon, sponsors Breckenridge team riders Zach Black and JJ Thomas, halfpipe competitors who have been holding their own on the U.S. Snowboarding Grand Prix as Olympic hopefuls and have helped the company raise its profile. Venture, another tiny company, specializes in big mountain boards and split boards ideal for the backcountry terrain at its local mountain in Silverton; it does small production runs popular in Colorado shops. But nobody flies the Colorado flag as proudly as Never Summer: The graphic for its 2010-2011 Heritage board is an American eagle carrying a Colorado flag; every board that leaves the factory boasts a three-year warranty sticker with a Colorado flag logo; and every mention of the Never Summer name in any of the company's marketing materials is paired with "Made in U.S.A., NS Factory Built, Denver, CO."
"This is a great market to be in, and we do probably 20 percent of our business right here in Colorado," Tracey says. "I love seeing new local companies coming up, and it's easy to grow when you're small; we've grown every year since we've been in business. But you see how many companies come and go. My brother and I, we're pretty frugal guys, and we want this to be a super-long-term deal, for Never Summer and for the entire industry, so I'm less concerned about competition from other snowboard companies than I am about the specialty shops themselves. What keeps me up at night is wondering how some of these shops are going to make it. It's just brutal out there for these retail shops. I'm hoping that they can survive, and I think companies like us can help protect them."
Two weeks before SIA, Never Summer sponsors the Rail Riot at Loveland Ski Area, an amateur event presented by the Boulder Snowboarding Group. Adam Schmidt founded BSG as a Meetup.com group in September 2008, and it already has more than 1,000 members; nearly 100 of them show up for the Rail Riot.
Loveland is using the phrase "Core Colorado" this season to attract riders like Schmidt, and BSG makes for a good core-market case study: Members use the RideBSG.com website to find riding buddies and carpool crews, and Schmidt has leveraged the group's numbers to wrangle discounts at local ski areas and big-name sponsors for parties and other events. When new snowboard videos premiere in Boulder or Denver, promoters call up Schmidt to help get the word out, and when a company like Never Summer wants feedback on its boards, it organizes a demo for BSG members. Nearly half of the Rail Riot competitors show up on Never Summer boards, proof that the Canadays are connecting with their core constituents.
"We're a regional group and we've got regional pride — what can I say?" Schmidt says. "Everybody loves that they're a local company, and a great percentage of our group has already been down to the Never Summer factory, met the local workers, seen the boards being made, tested the boards at a demo day, and then gone out and bought one once they've seen what the company is all about and seen that the boards are legit. It's an easy company for a local riders' group like BSG to get behind."
Never Summer team riders Cooper Sclar, Lakota Sage and Heather Baroody are on hand for the Rail Riot, representing for the company and enjoying a bluebird day on the mountain. Sclar, a fresh-faced freshman from Evergreen High School, wins the Grom division. Sage, who sports a burly mountain-man beard, takes dozens of casual laps through the terrain park over the course of the day, all the while fielding questions about the new board he's riding. Baroody wears snowboard binding screws for earrings and is content to ride the rails between powder expeditions to places like Silverton Mountain; no matter what kind of riding she's doing, she uses the same board: Never Summer's SL all-mountain freestyle model.
Based on her experience with Never Summer, Baroody has some sage advice for the businesses coming to SIA. "For a company to make it these days, I really think it's about getting out there and showing people what you have," Baroody says. "It's not enough anymore just to have pictures in the magazines and have the best riders on your team. You have to get out there, do demos, let people try the boards and show them firsthand, 'This is the stuff.' And you've got to bring it. For someone to want to buy a $500 snowboard these days, you have to have the goods. Give them a board they can ride in the powder and ride in the park, and they'll shell out. No matter what's happening with the economy, snowboarders are going to want to buy snowboards, you know? You just have to try a little harder now."
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