In my posts last week, I discussed a business model that may seem outdated to some. One man, making lugged steel frames by hand in Bogota, Colombia. Jose Duarte's business, however, remains a vibrant one, and is indicative of the passion that Colombians have for cycling. But Colombia is not the only place that is mad about cycling.
Belgium, that long standing bastion of cycling culture, has come to the forefront even more than usual as of late. Fueled by North American's interest in both the spring classics, and cyclcocross, a large number of Belgian-themed products (some with pseudo-Belgian names) have suddenly hit the market. What, I wondered, does someone like Joachim Aerts—owner and founder of Ridley Bikes—make of this current Belgian-centric trend? Is he flattered or amused? I wanted to ask him about this, as well as other topics that I have often wondered about. For example: Is a bike company able to quantify their return on investment when it comes to sponsoring a top-level professional team? Would a brand their size ever consider selling directly to consumers? Is the bike business in Iran growing? You know...those typical age-old questions.
When I sat down with Aerts over lunch, I quickly realized that he's a mix of boyish enthusiasm, and unbelievable focus. He's serious about business, but will then turn around and tell you the most unbelievable and comical stories about cycling that you've ever heard. And he's full of them. For our conversation, however, I largely focused on the kind of bike business questions I thought only someone in his position could answer.
Cyclocross has long been a huge part of cycling in Belgium. Now, the discipline is also becoming very popular in the United States, as the World Championships in Louisville draw near. With that rise in interest, does Ridley see cyclocross as a strategic tool to make inroads into the U.S. market?
Yeah, absolutely! That’s clear. When I was in Frostbike [an industry tradeshow hosted by Ridley’s US distributor QBP], those guys had a target set for a number of cyclocross bikes they wanted to sell. In three days, they didn’t just reach it or double it, they tripled it. So we are now selling about as many cyclocross bikes in the United States as we are road bikes, which is amazing.
Some companies in the United States are starting to sell directly to consumers through the web. You go through QBP. Do you foresee a time when you could potentially sell direct to consumers, or will you always rely on a dealer network?
The Ridley philosophy is to have a dealer network. I’m sure that things in our industry will change, with so many companies coming up online now. The price points can’t get to the point where Ridley is 30% more expensive than an online brand. But if you look at the margin for a distributor and a dealer, if you add it up, there’s always a gap. So I think our industry, in the next couple of years will be reorganized a little bit, so there will be a link between consumer, dealer and brand. So we as a brand will have to do more for our dealer and our distributor, so that the consumer will have more direct access to it.
But at the end of the day, bikes are becoming more and more technically complex. This is good for us, and bad for the internet brands. A bike from even three years ago, could be maintained by most people who were really into these products. At least 99% of the maintenance could be done by them. I don’t know how these consumers will work with [Campagnolo] EPS or [Shimano] Di2. An integrated brake, to adjust it and install it, is different than a regular brake. And this is the beginning of electronics, since there will be more in the future. So this is a good thing for us as a brand that chooses the dealer philosophy.
Does a company like Ridley see a direct relationship between sponsorship of teams at the highest level, and sales? Can you quantify the value of that investment?
Yes and no. There has to be some value, otherwise we wouldn’t do it. It certainly puts your brand on the map at a high level, and that happens globally. But I say “no” because it all depends on the partner that you work with. A consumer in the United States, for example, may know which teams ride which bikes. But not everyone does. So to benefit from that you have to rely on local partners to get the word out. And that’s where we at Ridley stands now. Too big to be small, too small to be big.
We do exceptional product development, we have great team sponsorships, and we are now working on a flexible supply chain. In Europe that works really well, since dealers only have to invest in showroom models and they use our inventory to fill orders. That has worked well.
But we simply don’t have the tools to be effective at communicating with consumers in all these countries like Specialized or Trek do. So to answer your question, within the industry, you need sponsorship at a high level to open things up. But then there’s that second step, and that has to be done by a local partner. That’s tougher, but we continue to work on that.
You sponsor the most successful pro team in Asia, Trabriz Petrochemical from Iran. Do you see the Middle East as a growing market, but also as a place where cycling talent could possibly come from?
The first idea behind sponsoring a team in Iran was not for business, because the Iranian market is extremely small, but it was more because of our passion for the sport. There was a passionate guy who came to me at the Eurobike show and he said “I live in Iran, I’m part of this team and I support it”. He’s our distributor in Iran, and I could see the passion in his eyes, in the way that he was trying to get me to give him support. It’s the same passion that I have for cycling, and that was the trigger for me to say, “Yes, I’ll support you.” Because I knew there could be someone there that had the dream of becoming a cyclist, but had no chance to do so. That was four years ago. The team has since become bigger, more professional, and their riders are now the strongest in the Asia Pro-Tour, and Mehdi Sohrabi was able to ride for Lotto-Belisol. We can now see that the team gives us great publicity in those markets in the east, which are small now, but I’m quiet sure will grow. So in the end, supporting the sport has led to something that will help us grow our business in that region.
There are bike companies in the United States that use Belgian-sounding names and iconography, in order to appeal to a certain Belgian-centric sensibility that is in vogue right now. What do you make of this?
It's been said, even by people like Lance Armstrong, that Belgium, and Flanders, are the center of the cycling world. He said that in a TV interview, so who am I to argue with him? (laughs) If you look at our history, he’s right, as are others who have said so.
Of course, if brands in the United States try to benefit from that…well…it’s up to the consumer to realize what’s really from Flanders and what isn’t. Who is really from Belgium and who isn't. Personally, I don’t have a big issue with this. We saw Scott do this when all of Europe was under such huge influence from the U.S. and American products. For five or six years, on their bikes it said “Scott USA”, but they’re a Swiss company. So it happened here, and now it happens there.
But we’re in the center of cyclcocross, and our bikes say “Tested on Pave”, because they really are tested on Belgian pave, right here, in the center of the cycling world…to use Armstrong’s words (laughs).
Did you miss out on the latest order of Cycling Inquisition jerseys? If so, go to Gage + DeSoto and pick one or three of them up.
Did you notice that the current issue of Road Magazine has an amazing article written by some Colombian guy? I'm that guy, and the article is great. Go check it out.
In the past, I've written about Belgium several times. You can read some of those posts here, and here.
Lastly, what would a post about Belgium be without the video below? Not a great post that's for sure. When you watch races, do you ever feel like Paul Sherwen repeats himself all the time? It's not you who's going crazy, Sherwen does repeat himself....and apparently does so eighty thousand times per minute. Listen and learn (video courtesy of my brother).