Oregon's bicycle manufacturing sector is dominated by a lucky few.
Ken Wheeler, founder of Renovo Hardwood Bicycles, has seen customers as far afield as Belize and Nova Scotia buying the famous wooden bicycle frames made by his Portland-based company.
The bikes, costing a minimum of $3,995*, are the ultimate high-end, luxury product for serious cyclists with disposable incomes.
Renovo’s bikes are typical of the super niche, handcrafted bicycles made in the state.
Oregon is well known for its bike-friendly policies, with Portland among the cities with the highest rate of commuters going by bike. Hundreds of bike shops and bike-related businesses capitalize on the popularity of cycling, in what appears to be a thriving sector.
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But the market for Oregon-made bikes is a challenging one, with just a handful of manufacturers dominating the sector.
Competition from foreign-made bikes is fierce — 99% of bikes sold in the U.S. are made in Asia. A shift to online sales also means manufacturers have to be increasingly tech and marketing savvy to turn a profit.
The fact that cycling rates in the city have unexpectedly declined adds further to the hurdles manufacturers must overcome.
Co-Motion Cycles in Eugene is one of the few manufacturers in Oregon that can afford to employ a relatively sizable staff of 18. The company, co-founded by Dwan Shepard in 1988, makes tandems and touring cycles.
Shepard said competition from Asian bike makers has always been fierce, but he has seen a recent renaissance in demand for American-made, handcrafted products. The company has upped its marketing efforts to emphasize that its bikes are made in Oregon.
“There is definitely a cache in the Oregon identity. You could even call it a brand. When we emphasize that it is made in Oregon – it gets attention,” said Shepard.
Consumers don’t always pay attention to the origin of where bicycles are made. “That gives us responsibility and opportunity to say, ‘Look, we are making this right here in Eugene with a staff of 18, who are earning a living wage. They are part of the community.’”
Renovo, the wooden bike frame maker, recently partnered with a European firm to boost its brand.
The bike maker collaborated with Glenmorangie, creators of Highland Single Malt Scotch Whiskies, to create bicycle frames made from whiskey barrels. The whiskey distiller is owned by Moet Hennessey-Louis Vuitton, an owner of several luxury brands.
“We produce a high-end bike, which goes well with their style and demographics,” said Wheeler of the partnership with the European luxury brand firm.
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It is this focus on uber niche, luxury bicycle products that ensures the success of builders like Renovo.
But most bicycle manufacturers in Oregon are too small to build a sophisticated marketing machine that is now necessary to sell high-end, handcrafted bikes.
“They are often just one person responsible for the entire operation,” said Tyler Robertson, a marketing consultant for the bicycle industry. “They don’t have the marketing or bandwidth to reach the customer.”
But even larger manufacturers appear to have problems gaining traction in the frame building business. Chris King Precision Components, a maker of bicycle parts like hubs and headsets, is one of the largest bike-related businesses in the state.
In August, it announced it is discontinuing Cielo, a bicycle frame brand, to focus attention on its core products of bicycle components. Chris King could not be reached for comment.
Another aspect hurting manufacturers is the trend for more customers to buy bicycles online.
This has eroded the price of luxury bikes, which tend to be sold for cheaper online than in stores. Because many of the newest American-made bikes retail for at least $6,000, “customers are looking at every way to cut costs,” said Robertson.
The financial troubles for small manufacturers is evident in the decline in membership at the Oregon Bicycle Constructors Association, a trade group. Over the past 10 years, the number of members has fallen to around 25 from more than 40 at its peak.
Dave Levy, president of the trade group, said bike builders are hurting because they are not making as much money as they once did, thanks in part to the move away from sales made at brick-and-mortar stores to online, a trend evident in all areas of retail.
“It is an industry built on margins, which are now dictated by online sales,” said Levy.
He also pointed to increasing commercial rents in Portland, which are unaffordable for many small bike builders.
Levy counts only three manufacturers in Oregon that are making any kind of significant volume of bikes: Co-Motion of Eugene, Bike Friday, a maker of folding bikes in Eugene, and Breadwinner Cycles, a Portland manufacturer of custom bicycles.
Andy Newlands, owner and sole employee of Strawberry, a bicycle frame fabrication facility in Portland, distributes bike tools throughout the U.S. to make extra money. He would not be able to survive just making bikes, he said.
“A lot of people I know are working full time in engineering. They work on bikes on the side,” said Newlands.
Some bike manufacturers point to larger transportation trends as part of the problem. Jude Gerace, owner of Sugar Wheel Works, a wheel making shop in North Portland, said sales declined more in 2016 than any of the nine years she has been in business. The snow storms contributed to sluggish sales, she said, but so did declining interest in cycling.
Portland’s bike commuting rate dropped from around 7% of commuters in 2015 to 6.3% in 2016, according to census estimates. “We have an influx of new people to Oregon, and they aren’t necessarily riding bikes,” Kerstein said. “Biking is also less safe.” Low gas prices also discourage cycling, she said.
As an industry working on razor-thin margins, small bike manufacturers will have to evolve to meet the demands of the shifting consumer landscape to survive.
Oregon is known for its popularity for bikes, but it is not enough to sustain a cottage industry anymore.
“The smarter small manufacturers will look hard at where their demographic is buying bikes and meet them there,” said Robertson.
*Correction: A previous version of the article incorrectly referred to the minimum price for Renovo bicycles as $6,950. The correct minimum price is $3,995.