MIAMISBURG, Ohio (BRAIN) — Bruno Maier has held a wide range of positions in the industry, including stints at Huffy, Pacific, CSG, PeopleForBikes, Rocky Mounts. Now he's at United Wheels, the owner of Huffy, Niner, Batch, Vaast, Royce Union and other brands. He is the president of Allite, which offers a range of proprietary magnesium alloys and related services, for the bike industry and other applications.
The Batch brand launched at the Interbike show in Reno in 2018. It offers a range of low-priced recreational bikes and e-bikes, aimed at giving IBDs access to bikes that meet their standards and are price competitive with bikes sold at mass merchants and sporting goods store. With the recent run on affordable family bikes, Batch is ideally positioned in 2020.
This interview has been edited for length and clarity. The bulk of the interview was conducted May 6, but BRAIN communicated with Maier this week to update some sections as necessary.
I’ve been starting these check-ins by asking what you are seeing out there at the dealer level. I would imagine you are working with a lot of dealers who are selling a ton of entry-level bikes like Batch.
“I’ve talked to a handful of dealers who are seeing a lot of business in sub-$1,500 bikes and entry-level e-bikes. But overall sales and demand have been strong for United Wheels. At the high-end, Niner has continued to remain strong."
That’s interesting to hear about Niner, because I’d been hearing some of the boutique mountain bike brands are having a tough time.
“We've heard similar feedback from dealers regarding our competition in the boutique mountain space. Niner's dealer growth and recent product launches of the RIP, RLT, and MCR have helped the brand's business during the pandemic.”
So overall across Batch, Niner and Vaast is your business up from last year?
“Our business is up. We’ve seen a positive response to Batch, Niner is performing well, and initial demand for Vaast Bikes has been strong. The changes in the market related to COVID has only accelerated interest in Batch. Over the last few months we've built a lot of strong relationships with some very good dealers.
“Demand has been building in the sub $1500 category. We launched Batch to provide dealers a product that could fill the "white-space" between the mass market and historical IBD opening price points. The value and margins we offer dealers has been beneficial for our growth.
“Our challenge now is to enhance our dealer relationships to continue to offer consumers a quality and value proposition that is easy to understand.”
What’s your prediction for this mini bike boom, as some states start to re-open?
“I have a positive outlook regarding that discussion. Having lived in Boulder, Colorado, and Madison, Wisconsin, I understand strong cycling communities. Now being back in Ohio where cycling is less prevalent .... the amount of bike traffic I'm seeing in my neighborhood as well as on the rail trails -- it's like a cycling superhighway these days.
“All the team sports are shut down, and I think that’s been a breath of fresh air for families because they have time to think about how they spend their time. It’s giving kids a chance to re-engage with bikes instead of being driven from home to school or school to practice. It’s going to generate a new passion for bicycling for recreation.”
What are you doing to keep it this movement going?
“We’ve been taking a proactive approach with our dealers, making sure they have product available and are aware of when we have new product coming in. For us it’s been just trying to make sure that the dealers we’ve partnered with have the product they need to meet the demand in their market.
“I think everything that Vaast, Batch, and Niner are doing is in line with the recreational riding boom. Our brands, products, and value proposition meet the needs of families, weekend warriors, and enthusiasts."
How’s your inventory?
“Our inventory position has been good throughout most of the spring. We were pretty well set up for a strong spring, so that helped us meet the needs for a lot of dealers (when demand increased).
“We are experiencing a few out-of-stocks, but we have more inventory coming in this month.
“We are probably entering a phase now where there are a handful of models we may get short on, but we still have inventory on the key items. It’s not perfect but overall we’ve weathered the increased demand pretty well.”
Are you seeing any delays in shipping?
"Our production facilities and the majority of our suppliers were able to ramp up quickly, and that has helped us avoid any major shipping delays. Our operations team has done a phenomenal job getting product into and out of our warehouses. They're not only handling Vaast, Batch, and Niner, but they're also moving freight for Huffy, Royce Union and Buzz Ebikes."
I’ve been seeing photos of empty bike racks at Walmart and Target. Has Huffy been able to keep up with demand?
"The Huffy team has done an excellent job of meeting market demand. It's like anything else, when we see these types of demand spikes, it's a struggle, but the team has done a great job of turning inventory. When you see those empty bike racks it might be as simple as a run on bikes at that location. It can take time to refill those racks. However the product is flowing through the Huffy side to address the increased demand."
Many of the tariff exclusions granted in the last year have been for kids bikes. Has that helped Batch?
“In retrospect, it’s definitely been a blessing that those exclusions came through. When we launched Batch we decided to absorb the majority of those tariffs — we took a hit on our margin structure in order to fulfill our promise to dealers. We committed to providing dealers with a high quality, easy to understand value to attract new consumers. When the exclusions came through it ensured we could continue to deliver the value demanded by recreational riders."
Now it’s just a matter of extending those exclusions so they don’t expire in August …
“While we can't guarantee an extension of those exclusions, we have confidence in the leadership team at PeopleForBikes. Their efforts at the federal level help ensure a vibrant cycling industry. Our leadership team has been active in communicating with the Administration to reinforce the importance of cycling to small business and active communities. Eliminating the exclusions this August will clearly have an impact on small businesses and higher prices will only make it more difficult for families to be active during this time of social distancing."
How has the lack of races and events like Sea Otter affected your brands’ marketing plans?
“It’s probably had less of an impact on Batch, but Vaast and Niner were both looking forward to Sea Otter and Eurobike to make some pretty big introductions of new product, so that's definitely had an impact.
“The marketing team here has been proactive in developing back-up plans. They have developed a number of alternative solutions to get our messages out to dealers and consumers regarding new products and initiatives. We started to think about these issues the second we saw what happened in China with COVID, so our team is well prepared."
Did you delay any launches?
“We have adjusted our launch plans, but I wouldn't say that we are delaying launches. The changes due COVID have forced us to adapt to the new market. We will still attend Sea Otter and Eurobike, and we plan to make the most of those opportunities, but we've been forced to be more creative with our approach. I'm completely confident in the plans our team has put in place."
You have a new position within Allite?
“I've been blessed that I was able to return to United Wheels and Huffy to help launch some new growth initiatives. I've been the president of Allite since 2018, and was also given the opportunity to help grow our IBD segment. In order to align resources and take advantage of the growth opportunities, we have restructured the organization. Morten Kristiansen has been promoted to the position of general manager IBD where he will oversee Batch, Vaast, and Niner. I will focus on expanding the distribution of Allite Super Magnesium.”
What are the aims for Allite?
"Allite is a material science business. The team at Allite has developed a number of proprietary magnesium alloys that possess higher strength, improved ductility, and corrosion-resistance properties for extrusion, forging, and casting applications. We have our own manufacturing and R&D facility outside Nanjing, China. The materials have applications across a number of industries including the cycling market. Our material can reduce frame weight by up to 30% and increase shock (vibration) absorption at 20 times vs. aluminum. The material benefits will improve the performance of frames, suspension linkages, stems, disc brake calipers, wheelsets, e-bike motor casings, etc.
"In addition to weight and vibration benefits the material also improves electronic magnetic resistance and heat dissipation, which also makes the material a solution for product challenges in the aerospace, automotive, and electronics industries.
“One of the most important things with our alloy is that it’s sustainable. Magnesium is one of the eighth-most abundant elements on earth. Magnesium is 100% recyclable and if it ends up in a landfill, it will decompose back to magnesium. We can make a strong sustainability statement with our material."
I’ve heard people be skeptical of magnesium. But I think many folks forget how many suspension fork lower legs have been made of magnesium for years and years.
“Yes, magnesium fork lowers and linkages have been readily available for many years. We've also seen mag alloy used in frames, wheels and other components in the past. The difference is that our team of engineers and academics has developed magnesium alloy formulations that improve strength, ductility, and corrosion resistance. The combination of improved properties will enable advances in frame development and forged components that will improve product performance.”
For these Check-ins I’ve been asking everyone if they have a message for the industry at this time. With your experience across the industry and even on the advocacy side I’m especially curious to hear yours.
“This pandemic has impacted a lot of people in this country. People have lost loved ones, jobs, and we're all being forced to change our social interaction. As an industry we need to appreciate that Americans are turning to bikes for exercise, recreation, and family time. There are thousands or maybe millions of people who are turning to cycling to find an escape. We as an industry need to continue to make cycling easily accessible to everyone that wants to get on a bike — for any reason.
"My recommendation for the industry is to support PeopleForBikes. Through their efforts and leadership we can make choosing to ride a bike easy and safe. If we can get a small percent of the people who have recently engaged with cycling to stay with it for the long-haul, we all win."
Do you think the industry and dealers will shift to put more emphasis on family and commuter riding, as opposed to the high-end?
“As the economy recovers we definitely expect to see dealers balance their product offerings between opening price points and the high-end. We launched Batch to fill the "white-space" between the mass market and typical opening price points in the IBD. The increased demand for family and recreational riding has validated that strategy.
"The answer is yes, I think dealers will put more emphasis on recreational cyclists as it is way to bring new consumers to their stores. As those riders become more experienced, the dealer can move them through the value chain. We believe more dealers will turn to Batch Bicycles in order to start that consumer relationship."
