Eager Consumers Rev up Growth in Powersports

This article originally appeared in the Summer 2021 issue of Middle Market Growth. Find it in the MMG archive. 

The COVID-19 pandemic helped reacquaint consumers with the great outdoors. It also minted a new group of customers in the powersports segment, leading to a surge in demand for sporting equipment and presenting opportunities for aftermarket manufacturers and retailers.

The powersports market—which includes off-road vehicles like ATVs, boats and jet skis, and snowmobiles— grew at a remarkable pace over the past year. According to a report from investment bank PJ Solomon, the total market grew by 18% throughout all of 2020, and accelerated to 25% in the final quarter.

“I’d characterize it as white hot,” says Justin Hillenbrand, a partner and co-CEO of private equity firm Monomoy Capital Partners, who also leads the firm’s powersports investments. “I don’t think there’s another way to describe it.”

During the pandemic, CDC guidelines allowed many outdoor activities to continue, and federal stimulus packages fueled consumer spending. A number of people left urban areas for roomier accommodations in suburban and smaller communities, where they were more inclined to purchase recreational products.

“It’s not surprising when you have the entire population stuck at home for months. They try and figure out what they can do within their own confines— whether that’s riding a bike, an ATV or a snowmobile. The desire to be outside is immense,” Hillenbrand says.