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What is Really Driving Bike Sales in the U.S.?

The International Mountain Bicycling Association has a simple motto for rallying support from retailers and trade groups: "More trails equal more sales."

Along with the Rails-to-Trails Conservancy, National Bicycle Greenway, People for Bikes, and other advocacy groups, IMBA's efforts include opening up new areas to cyclists, lobbying governments to open existing park trails, and finding money for greenways and bike paths. It knows that having businesses behind it help its mission; letting them know the organization's efforts are in their best interests is crucial.

Commuting is up, but recreation rules
A growing number of people are turning to bikes for transportation, avoiding the gas station, and in some cases, bumper-to-bumper traffic, and staying in better shape because of it. But the market for bikes in the U.S. is still driven by recreation.


The Bicycle Market Research Institute in 2006 estimated that just 10% of cyclists use their bikes to commute. Some 73% said they rode for recreation.

"Better facilities" are an important reason for the industry's growth, the National Bicycle Dealers Association said in its report on the industry in 2012. The organization's efforts have paid off. Federal, state, and local governments have increased support for bike lanes and trails, even in times of tighter budgets, NBDA noted, "and momentum seems to be building to support non-automotive modes of transportation."

Rail-trails triple
IMBA and many other state and local-level biking advocacy groups continue to convince governments at every level to open park trails that had previously been the domain of hikers and horseback riders only. This has allowed mountain biking to flourish, and it helps to explain why it has been the fastest-growing segment of cycling.

At the same time, the mileage of Rails-to-Trails in the U.S. continues to grow at a rapid pace. In 1996, there were about 7,000 miles of rideable rail-trails open in the U.S. Today, there's more than 21,000, and another 8,000 either planned or under construction, the organization says.

If more trails really do equal more sales, than the biking industry should be firing on all cylinders.

But cyclists decline
If we use active participation as a measure, that hasn't exactly been the case. In fact, the number of Americans who had ridden a bike at least six times in the previous year shrank between 1995 and 2012, according to the NBDA, down from 56 million to just under 40 million. What's more, NBDA says 1995 – when there were about 7,000 rail-trail miles and limited access to public mountain bike trails – was the peak year for participation in cycling in the U.S.

But IMBA is on to something. Even with 30% fewer Americans saying they ride a bike a half-dozen times or more a year, sales of bicycles have, indeed, been higher over the past several years than they were in those peak 1990s years for participation.

In 2012, the last year for which the NBDA had full statistics available, 13 million bikes (counting only 20-inch wheels or larger) were sold, or about 1 million more than were sold in 1995.


The rise of the bike geek
More likely, what's been driving bike sales in recent years is the growth of the bicycle enthusiast, a buyer more likely to own multiple bikes – say road racing, cross-country mountain, and a fat-tire bike for snowy winter riding – and more likely to reinvest more frequently as features and technology advance, either by way of parts upgrades or new bikes. These are also cyclists more likely to seek out new trails and new adventures – one of the reasons they own multiple bikes in the first place.

They are also more likely to pay more for their bikes. In its American Bicyclist Study, the Gluskin Townley Group estimated that bike enthusiasts spent an average of $1,164 on new cycles in 2013. The next group down in terms of mileage ridden spent an average $448 in 2013. That's a big difference.

More trails may not directly correlate to more sales, but giving bike enthusiasts more places to ride is good for business.

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John-Erik Koslosky

John-Erik Koslosky is a writer, journalism instructor, investor, and all-around Fool. He follows the media and social media industries, and writes about some of their publicly traded companies.

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