Burton Snowboards Inc.

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Burton Snowboards Inc.

80 Industrial Parkway
Burlington, Vermont 05401
U.S.A.
(802) 862-4500
Fax: (802) 660-3250
Web site: http://www.burton.com

Private Company
Incorporated: 1977
Employees: 600
Sales: $120 million (1996 est.)
SICs: 3949 Sporting & Athletic Goods, Not Elsewhere Classified

One of the first snowboard companies in the world, Burton Snowboards Inc. designs, manufactures, and markets a full line of snowboarding equipment, clothing, and related accessories. Although snowboarding did not become a well-recognized sport until the early 1990s, Burton began manufacturing snowboards and bindings in 1977, when the company’s founder started making his own boards in a borrowed woodworking shop in Stratton, Vermont. From these modest origins, Burton developed into a flourishing enterprise with offices in Europe and Japan that served customers in 27 countries. Recognized as an industry pioneer, Burton controlled roughly 40 percent of the U.S. snowboarding market during the late 1990s, more than any other company in the world.

Genesis of Snowboarding

Few individuals had a greater effect on the creation and the development of the snowboarding industry than Jake Burton Carpenter, the founder of Burton Snowboards. Carpenter’s pioneering influence was irrefutable, but in the history of snow-boarding there was one key individual whose contributions preceded Carpenter’s. His name was Sherman Poppen. Although Carpenter was recognized as a pioneer—and deservedly so— Poppen’s innovative work inspired Carpenter. Just as the hundreds of companies involved in the snowboarding industry during the 1990s were indebted to Carpenter, so too was Carpenter indebted to Poppen. Poppen never received the fanfare accorded to Carpenter, but in the history of Burton Snowboards, which framed the history of snowboarding itself, the origin of all that followed started in Poppen’s garage in 1965.

A businessman residing in Muskegon, Michigan, Poppen was the inventor of the “Snurfer,” the earliest version of the modern-day snowboard. Poppen assembled his first Snurfer on Christmas Day in 1965 when he nailed together two 36-inch skis with scraps of wood and gave the hastily created toy to his daughters. At first, Poppen was merely trying to create a diversion for his daughters to get them out of the house and away from his pregnant wife, but the toy proved to be an enormous hit among the neighborhood children, prompting Poppen to refine the design of the first Snurfer. Three months later, after tinkering with the design of the Snurfer and adding a rope to its front for the rider to grasp, Poppen had secured a patent for his invention and was ready to determine whether or not he had a marketable product. Poppen approached a friend of his who worked at Brunswick Bowling & Billiards Corp. and subsequently licensed the Snurfer to Brunswick. What followed was a renowned marketing disaster, but Poppen’s misfortune proved to be the inspiration for Burton Snowboards.

Although the idea seemed logical, Brunswick never distributed Snurfers to sporting goods stores. Instead, the company distributed the snow toys to hardware stores, where they were sold for roughly $10. It was a major misstep, one that Harvard’s business school used in later years as a case study to illustrate how not to market a new product. Although 500,000 Snurfers eventually were sold before Brunswick abandoned production, the results were dismal. Poppen later realized his error, remarking, “They [Brunswick] knew the bowling industry, but they sure as hell didn’t know consumer products.” Much of the finger-pointing at Brunswick stemmed from the fact that Snurfers had considerable market appeal, but the company had failed to exploit consumer interest.

1970s: Burton Snowboards Takes Shape

One of those who recognized Brunswick’s errors was Jake Carpenter. When Carpenter was 14 years old he received one of the Brunswick-made Snurfers, and from that moment forward, he had found his life’s calling. Throughout high school and college, Carpenter labored to make improvements on the Snurfer, experimenting with one design after another during his hours away from classes. His devotion was tireless and his work was visionary. “I felt there was an opportunity for it [the Snurfer] to be better marketed,” Carpenter later told Sports Illustrated. “For serious technology to be applied to it, so Snurfing could become a legitimate sport instead of a cheap toy. I knew there was an opportunity there. I couldn’t believe Brunswick never took advantage of it.” Carpenter’s father, Tim, a writer and former Wall Street broker, was impressed with his son’s diligence: “He wasn’t the type of kid who set up lemonade stands, but once he had the idea for this board in his head, he put every bit of his energy into it.”

After earning a degree in economics from New York University, Carpenter took a position at a small Manhattan investment bank. His tenure there, however, was brief. A small inheritance from his grandmother enabled Carpenter to quit his job at the bank and move, in 1977, to Stratton Mountain, Vermont. There, with $20,000 as a nest egg, Carpenter founded Burton Snowboards at age 23, taking the company’s name from his middle name.

Jake Burton Carpenter worked nights as a bartender at Stratton’s ski resort and spent his days honing his skills as a snowboard maker in the woodworking shop of a friend, Emo Henrich, who was director of the Stratton Mountain ski school. Carpenter constructed more than 100 models in Henrich’s shop, trying different shapes, different types of wood, and experimenting with various laminating materials and binding designs before settling on what he deemed a marketable product. Although the improvements over the Snurfer design were vast, Carpenter’s timing was off. “I was so naive,” he later confided. “I thought I’d be selling boards and making money right away, but by the time I had a board ready, winter was over and nobody was interested.” It was a frustrating start, but only the beginning in what would turn out to be an arduous undertaking. Carpenter was not only trying to develop a product and bring it to market, he also was trying to create the market in the first place. His perseverance, first displayed as a teenager in Cedar-hurst, New York, would be tested for years to come.

After his disappointing first attempt at selling his boards, Carpenter went to Europe and spent the summer of 1978 testing his boards on the glaciers in Austria. When the winter season neared, Carpenter returned to the United States and steeled himself for another go at selling his boards. This time he was more prepared, and spent endless weeks traveling around the country attending trade shows. “I was afraid to go to the bathroom,” Carpenter recalled. “I thought if I did, I might miss my only customer.”

Compared to his first season of selling, Carpenter’s 1978-79 season was a success, thanks in large part to more thorough market research and the establishment of a mail-order department, whose telephone rang in Carpenter’s bedroom. Offices were set up in a former electrician’s store in Londonderry, Vermont, where Carpenter, with a few friends lending a hand, produced his four-foot-long, eight-inch-wide snowboards. By the end of the season, Carpenter had sold 300 boards, but he was far short of his break-even point and was racking up debt with each passing day.

Snurfers at this point were more popular than ever, having transcended their ill-conceived marketing and distribution support to become a cult hit lionized at the National Snurfing Championships in Michigan. At the annual event in 1979, the Snurfer faithful gathered to compete in races on their boards, but their day of celebration was disrupted by the arrival of a newcomer: Jake Carpenter carrying one of his own snowboards. After convincing race officials to let him race by creating an open division, Carpenter strapped into his bindings and proceeded to win the race. Carpenter’s victory sounded the death knell for Snurfers, ushering in a new era of snowboarding that focused on the continual improvement of technology. In this new era, Carpenter and Burton Snowboards would rise above all other rivals to reign supreme in a market that a decade later represented the fastest-growing sport in the United States.

Company Perspectives:

Since 1977, Burton Snowboards has been driven to create the best snowboarding equipment in the world. Corporate headquarters are in Burlington, Vermont, with additional offices in Urawa, Japan, and Innsbruck, Austria. These three offices, employing just under 600 employees, are the main arteries that service the global snowboarding market. Burton Snowboards continues to be the industry leader, focusing its efforts on product development, R&D, and most importantly —riding. Everyone is out on the hill as much as possible. And with a free season pass and private lessons for Newbies, excuses for not riding are hard to find. Along with this dedication to the mountain, employees work in a casual but dedicated environment —jeans and T’s with the option of bringing the family pooch. Burton believes in a strong work ethic and is committed to working as a team to achieve their goals. When they’re not out snowboarding, they’re back at the factory putting their experiences to work.

1980s: Slow, Measured Growth

After his success at the Snurfing National Championships, Carpenter’s problem was that the rampant growth of the snowboard market was still a decade away. Although there was palpable interest in the sport, there were not enough people willing to try snowboarding to support Carpenter and his business. By the end of the 1979-80 season, Carpenter had sold 700 boards, more than doubling his total during the previous season, but he still was well below his profitability point. Year by year, the financial loses mounted, leaving Carpenter $ 130,000 in debt by 1981. Carpenter managed to move forward, however, and with the financial support of his wife’s family he developed better bindings, a high-technology plastic base, and added steel edges to his boards, which improved maneuverability exponentially. Slowly but steadily the changes made by Burton and the handful of other snowboarding pioneers increased the demand for snowboards, enabling Carpenter to break even for the first time in 1984, when sales reached the $1 million mark. Carpenter by this point had shed his last name to avoid confusion in business dealings and adopted Jake Burton as his full name.

The addition of steel edges to snowboards did much to persuade skiers to try snowboarding for the first time, but only a limited number of ski resorts allowed snowboards on their slopes. The battle to convince resort operators to allow snowboards on their slopes raged for years, with economics proving to be the decisive factor in resolving the war. The number of ski visits per year in the United States flattened out in 1979 and remained so for the ensuing two decades, forcing roughly half of the country’s 1,000 ski resorts to close their operations by 1995. Accordingly, as business tapered off and snowboarding grew, resort operators were forced to embrace the new sport. In 1985, 93 percent of U.S. ski resorts banned snowboarding; by 1995, more than 90 percent of the resorts not only permitted snowboarding but also focused their marketing programs on attracting snowboarders. The chief benefactor of this development—of snowboarding’s legitimacy—was Jake Burton and his promising company, Burton Snowboards.

On the heels of recording his first break-even year in 1984, Burton traveled to Europe and established a manufacturing plant in Innsbruck, Austria, in 1985. Previously, Burton had fulfilled orders from Europe for his boards on an individual basis. By the end of the following year, Burton could point to his first profit, as Burton Snowboards, nearly a decade after its creation, began operating in the black. For Burton and his company, it was the beginning of lucrative times after years of trying to succeed with meager financial resources. In the years ahead, snowboard manufacturers would find a vast and exuberant audience for their products, although the emergence of this iconoclastic crowd of consumers came as a surprise to many of snowboarding’s early proponents. Originally, Burton and other manufacturers targeted their marketing efforts on experienced alpine skiers, hoping a considerable percentage of the veteran skiers would try snowboarding and stay with it. This market segment was referred to as the crossover market, but it never materialized in great numbers. Instead, snowboarding received a greater boost to its ranks from skateboarding and surfer enthusiasts, people who typically had never visited a ski resort. These converts to winter recreation were the source of snow-boarding’s explosive growth, fueling the growth of Burton Snowboards and all those companies that followed in its wake. The arrival of snowboarding’s lifeblood—primarily teenagers—began with a trickle in 1985. By the early 1990s, the trickle had turned into a voluminous river.

Burton Snowboards in the 1990s

By the 1990s, snowboarding had moved into the mainstream, attracting headlines in newspapers, a perennially increasing number of participants, and a wave of start-up companies intent on grabbing a share of the lucrative, fast-growing market. Burton, who once operated in near isolation and generally was acknowledged only with bemused skepticism, found himself inundated with rivals on all flanks by the mid-1990s. More than 300 companies in the United States were competing for snowboard business in 1995, but all of the contenders took a backseat to Burton Snowboards. Operating in a highly fragmented industry, Burton Snowboards controlled an estimated 36 percent of the market, or twice as much as its nearest rival.

By 1997, Burton Snowboards was introducing its 1998 line of merchandise, the 20th year a new line of company-designed and -manufactured clothing, equipment, and accessories had debuted on the retail market. By this point, the company was selling more than 100,000 snowboards a year in North America, with sales in both Europe and Japan equal to the level registered in the United States. As the company charted its course past its 20th anniversary, the road ahead looked as promising as ever. Industry consolidation was expected to take place during the late 1990s and the early 21st century, as the smaller companies either exited the business or sold their operations to larger competitors. When this inevitable industry shake-up occurred, Burton Snowboards was expected to benefit significantly, as the big companies became bigger and the smaller companies were weeded out of the market. Viewed from this perspective, Burton Snowboard’s position as the industry giant appeared guaranteed in the years ahead.