• The outdoor recreation market is a booming $450B+ economy.
• Post-pandemic spending on adventure and premium outdoor gear remains elevated.
• The Great Outdoors Fund offers diversified investment in leading apparel and gear brands.
• Capitalize on premium brands like YETI and Deckers with strong pricing power.

Beyond the Campsite: Why Adventure Brands Could Be a Clever Bet

The Great Outdoors Goes Premium

Let’s be honest. For years, the British approach to the great outdoors involved a leaky tent, a questionable thermos, and a profound sense of stoicism in the face of drizzle. Our American cousins, however, have turned it into something else entirely. They’ve transformed a weekend hobby into a colossal, multi-billion dollar industry. And frankly, as an investor, I find that far more interesting than soggy sandwiches.

What started during the lockdowns, this mad dash for the hills, wasn't just a fleeting phase. It seems millions of people discovered that fresh air is rather pleasant, and they’ve kept the habit. The outdoor recreation economy in the US is now a behemoth, and the smart money isn’t just following the hikers, it’s looking at what they’re wearing, carrying, and driving.

The real story here is the move to premium. We’re no longer talking about a cheap plastic cooler from the local supermarket. We’re talking about YETI, a company that has somehow convinced a generation of people that a cool box can be a status symbol worth hundreds of dollars. To me, that’s not just clever marketing, it’s a masterclass in creating a brand that people want to be a part of. They aren't just buying a product, they're buying an identity, and that kind of loyalty could translate into pricing power that other consumer brands can only dream of.

It's Not Just About Coolers and Coats

This trend extends well beyond insulated boxes. Take a look at footwear. A company like Deckers Outdoor, which owns the HOKA and Teva brands, is a fascinating example. HOKA has managed to make its chunky, performance-focused running shoes a cult item, not just for marathon runners but for city dwellers who want to look the part. It’s the perfect marriage of genuine utility and fashion signalling. You need good shoes for a hike, but you also want them to say something about your lifestyle choices when you’re just popping out for a coffee.

This is where these companies might have a structural advantage. Unlike a new smartphone, which you might upgrade out of desire, outdoor gear has a genuine replacement cycle. Boots wear out. Jackets lose their waterproofing. Tents eventually give up the ghost. This creates a steady, predictable demand. Furthermore, a brand that earns your trust with a solid pair of hiking boots can quite easily persuade you to buy their backpack, their water bottle, and eventually, their entire range of camping equipment. It’s a wonderfully efficient way to grow a customer’s value over time.

A Sensible Look at the Risks

Of course, it’s not all sunshine and scenic trails. We have to be pragmatic. These are discretionary purchases. When economic times get tough, a new thousand-dollar tent is probably one of the first things to be crossed off the shopping list. A recession could certainly put a dent in the sales of these premium brands.

Then there’s the weather, the one thing these companies cannot control. An unusually warm winter could be terrible for ski gear sales, just as a miserably wet summer might dampen enthusiasm for camping. And let’s not forget the global supply chain, which has been a headache for everyone. Sourcing specialised materials and getting them shipped across the world is a complex dance, and any disruption can hit availability and profit margins. These are real risks that any potential investor needs to weigh up. Still, for those looking to tap into this cultural shift, a diversified approach might be worth considering. A collection of companies, like the The Great Outdoors Boom basket, could offer exposure to this trend across different sectors, from apparel to equipment, potentially smoothing out some of the bumps along the road.

Deep Dive

Market & Opportunity

• The outdoor recreation economy is valued at over $450 billion annually in the United States.
• The sector's contribution to the US economy is larger than that of oil and gas extraction.
• Consumer spending on outdoor activities has remained elevated above historical levels since the pandemic.
• A trend towards premiumization is allowing brands to command higher prices and margins for quality and durability.

Key Companies

• YETI Holdings, Inc. (YETI): A lifestyle brand known for premium coolers that has expanded into drinkware, soft goods, and other outdoor accessories, maintaining high-profit margins.
• Deckers Outdoor Corp. (DECK): A footwear company that owns performance brands like HOKA running shoes and Teva outdoor sandals, combining performance with fashion appeal.
• Columbia Sportswear Company (COLM): A large-scale, diversified apparel company with brands like Columbia and Mountain Hardwear, focusing on accessible gear for a broad customer base through its global reach and manufacturing capabilities.

Primary Risk Factors

• Economic Downturns: Discretionary spending on outdoor gear is often one of the first areas consumers cut back on during recessions.
• Weather and Climate: Atypical weather patterns, such as warm winters or rainy summers, can negatively impact sales of seasonal products.
• Supply Chain Disruptions: Reliance on specialized materials and global manufacturing makes companies vulnerable to shipping delays and material shortages.
• Competition: The industry faces pressure from new direct-to-consumer (DTC) brands and private label alternatives entering the market.

Growth Catalysts

• Product Replacement Cycles: Outdoor gear naturally wears out, creating consistent demand for replacements and upgrades.
• Brand Loyalty and Expansion: Successful brands can extend into new product categories, leveraging customer trust.
• Demographic and Lifestyle Trends: Younger generations are prioritizing experiences, while the wellness movement and remote work flexibility support more outdoor activity.
• Innovation: Advances in materials, technology, and sustainable manufacturing create opportunities for new premium-priced products.
• Urbanization: Increased urban living drives demand for nature-based escapes and the gear required for them.

Investment Access

• The basket of stocks is accessible through fractional shares, with investments starting from $1.
• Available on the Nemo platform, which is regulated by the ADGM Financial Services Regulatory Authority (FSRA).
• The platform offers commission-free investing.