Osprey Backpacks (1974), company review

Osprey Backpacks - from the start

Listening to Mike Pfotenhauer, founder of Osprey, you’d be forgiven for thinking he was a very laid back man. But I think that would belie his business acumen. And his obvious deep passion for the subject matter.

‘It was a love of building product; making things for myself and my friends. Building gear and hearing stories about how that gear has traveled all over the world.’  

Normally I take these statements with a pinch of salt, assuming some brand ‘guru’ has been polishing the narrative. The difference here is that Mike and his wife Diane actually moved to Vietnam in 2003 to be near their new Design and Quality Control Center in Ho Chi Minh City. That’s putting your money where your mouth is!’'‘

Let’s go back a little. As a budding entrepreneur, Mike established Santa Cruz Recreational Packs in Santa Cruz, California in 1974. Initially backpackers and travelers flocked to him for his custom-fitted, made-to-order packs, all thanks to positive word of mouth. His growing reputation would eventually evolve the business into the Osprey brand we know today, but initially the brand was all about customization, or the ‘fit’ of the pack. This was the pain point that he was addressing. And boy did it work.

Together with his business partner and wife, Diane Wren, Mike relocated Osprey to Dolores, Colorado in 1990 (into a former GORE-TEX factory!) where he collaborated with a small team of seamstresses who took charge of production. This allowed Mike to focus more on pack design. These Navajo women, adept in traditional sand painting and blanket weaving, honed their skills in the intricate craft of making Osprey packs. They expanded upon Osprey’s vision, playing a crucial role in the company’s success, which in 1994 prompted Osprey to move its operations to Cortez, CO, where it continues to be headquartered today.

If you check their website, you’ll see 1990’s accolades such as:

• 1991; Fortune Magazine profiles Osprey Packs in an article on "America's Best",

• 1993; We introduce the Isis, our first innovative custom-fit women's backpack, as part of our legacy for custom anatomical fit’,

• 1995 Our first recycled HDPE framesheets are engineered for backpanel suspension—a key step toward our sustainability initiatives.

• 1997; We begin sewing Leave No Trace principles into our backpacks

• 1998; Mike literally dreams the Straightjacket suspension compression system into existence

  Our ErgoPull hipbelt closure is introduced and revolutionizes backpack hipbelts forever

• 1999; The Aether™ backpacking pack makes an appearance on the cover of Time magazine - Erik Weihenmayer, the first blind climber to summit Everest, chooses the Aether 60 for his ascent. Time magazine features him, along with his pack, on the June 18 cover. (note - other sources say it was the June 18 2001 edition, but we won’t split hairs!)

Shortly after, in 2001, Pfotenhauer mentioned that it was becoming evident that at least partial offshore sourcing would be required. Although price has never been their driver, it couldn’t be ignored. That’s when the company began sourcing in Korea and Vietnam. And that’s when Mike and Diane moved their family to Vietnam, to be near the R&D, QC and production. As I opened with, I love this. It shows that they were ‘real’. (I’m moving away from the word authentic as it’s thrown around way too much these days!). Contd’ below this quick 1 question poll:

Throughout the 2000’s there were many more accolades for Osprey such as the Aether 75 backpacking pack receiving the Gear of the Year Award from Outside Magazine. Actually, I noted how many awards they received from Outside Magazine - a lot! To be fair, the Raptor 10 mountain bike pack also received the Gear of the Year Award from Men's Journal in 2010. By 2013 the company was celebrating ‘40 years of independence and innovation.’

In 2015 Osprey built their new World Headquarters in Cortez and established a new Headquarters for Osprey Europe in Poole, UK. This was another key part of their ambition, keen to access the rest of the world. The innovation continued and that same year Osprey introduced their groundbreaking AntiGravity suspension system, establishing ‘new standards in comfort while carrying', breathability, and load distribution’. It’s a hit and Gear Patrol called it a ‘back saver’. The Atmos | Aura AG received the Editor's Choice Award from Backpacker Gear Guide and it was recognized as Gear of the Year by National Geographic.

The innovation continued right up to the Osprey UNLTD line, which had features such as a patented 3D printed back padding. By 2021 Osprey had over 300 employees and generated c. $160m in sales. That was the same year that the company was sold to Helen Of Troy Ltd, a the parent of such brands as OXO, Good Grips, Hydro Flask, Soft Works, and OXO tot. You’d have to imagine that the immediately post covid valuations were a factor, and the company was sold for $414m. 

The name is now synonymous with quality. And I particularly like the fact that they focused on the problem - ‘carry-ability’ - and not on adding colors and pockets. Also, they have spent considerable time upskilling That’s what has driven success although, like the rest of the industry, Helen of Troy is facing challenges:

“Home & Outdoor net sales revenue, which contains the Osprey Packs and Hydro Flask brands, decreased 8.6 percent to $198.5 million in the quarter, compared to $217.1 million in the prior-year quarter. The decrease was driven by lower replenishment orders from retail customers, softer consumer demand, shifts in consumer spending, a global outdoor slowdown in packs and accessories, increased competition in the insulated beverageware category, and the impact of the shipping disruption at the company’s Tennessee distribution facility due to automation startup issues affecting some of the segment’s small retail customer and direct-to-consumer orders.”

However, focusing on innovation and quality will mean they will likely prevail. Problem solving is, I think, becoming increasingly important, even for established brands. There is a feeling that brand equity is diminishing amongst younger buyers, so problem solving is key. Exactly as it should be.

Also for Osprey, a move into the less hardcore and softer market segments also seems to be the fore, judging by newer assets. A move which we’ve seen many, many times before…

Can we use Amazon to forecast?

Absolutely, yes, in my opinion. Since starting this newsletter I’ve had a few emails asking how to predict what merchandise would sell on their online stores, and in their brick and mortar stores.

First, a fact.

Most people on Amazon have intent to shop. “Some 57% of US consumers started their online shopping searches on Amazon as of Q2 2023, according to Jungle Scout.”

One of the key segments is Sports and Outdoors, according to Jungle Scout.

Now, we can pay to drive traffic to our stores, but conversion is the crux. So, if only there was a way to check what’s actually selling in that marketplace - i.e. converting. Well, believe it or not, there is. I’ve used Jungle Scout before, and more recently Helium 10. These tools (and others I’m sure - I think the original was Unicorn Smasher!) can give very valuable insights into product sales by ASIN (SKU), competitors, ranking by keyword etc., which is obviously hugely insightful. So in our case with tents, we use Helium 10 to gain insights into the size and price point we should be aiming for, with features and other data points. This is transferable to Google also, as intent is likely to be similar..

Now, there is a fairly hefty subscription attached, and they generally want a yearly commitment. Hence I haven’t included a link - as I don’t want you thinking I’m doing this as some sort of affiliate. I’m not and the feedback is just from me as a user. We’re looking at Amazon as a key part of the jigsaw now, so I’ll keep you up to date with our findings on this journey.

Below is an example of the kind of data we’ve gotten so far just by simply putting a tent ASIN into the Black Box search in Helium 10, along with some filters. I’ve left the actual data out for fairness, but the figures such as monthly revenue (by product) are available below all of the below headings:

This can be replicated right throughout the Amazon platform, depending on your niche, and you can rank products by monthly revenues etc. So, a very useful tool, as these are real sales - not impressions or that nonsense. Anyhow, as mentioned, it’s early days. I’ll keep you up to date on the results we get from our research here and what we’ll be doing with them.