Last month I wrote about my planned trip to Bentonville, Arkansas, for the SHIFT’22 Conference October 18-20. The original plan was for me to attend with one of my Human Powered Solutions partners, Mike Fritz. However, Mike e-mailed the weekend before our departure that he, and his whole immediate family, had come down with COVID. So, I would be traveling on my own, but would be meeting up with Heather Mason, president of the National Bicycle Dealers Association (NBDA), and several of her board members after arrival.
I was impressed with the Northwest Arkansas regional airport, and utilized Uber for the first time to meet up with the NBDA tour of bike shops at the scheduled last stop, Mojo Cycling, owned by David Neal, and located on North Walton Blvd.
My Uber driver was born and raised in Bentonville, and he was knowledgeable about the history of the area and the Walton family. What I observed, and what I heard from my driver, filled in some of the gaps that were missing from my preliminary research.
By way of background, my family purchased a commercial campground in the Wisconsin Dells market area in 1980, and owned and operated it until about 2005. The Wisconsin Dells Visitors & Convention Bureau is an economic and political force in the region. As members we got to know and understand how Wisconsin Dells has four sequential exits off the Interstate, and pre-pandemic, hosted 2.5 million visitors annually.
My point is that I have some appreciation for economic and political clout, the infrastructure it attracts, and what it looks like. What I saw, and what was described to me, was certainly on a par with what I see every day.
According to my local Uber driver, Bentonville is an economic island in Northwestern Arkansas. He confirmed the driving force is Walmart and the Walton family.
I mentally filed this away as we arrived at Mojo Cycling and I joined the NBDA dealer tour of this wonderful full-service bike shop and rental business. Mojo is in the final stages of opening a second rental-only location. After touring it, the NBDA served refreshments and conducted a round-table discussion that afforded the local bike shop owners the opportunity to ask the NBDA president and board members questions about the association, Profitability Project (P2) groups, and the current state of the bicycle business.
From this discussion I gathered more insights into the local market, specifically the influence of the Walton family on bicycling in the region, and the economic impact of both the Walton family and the Walmart business.
The SHIFT’22 Conference opened on Tuesday. Registration was at the Momentary Contemporary Art Museum and 21C Museum Hotel. During the afternoon several of the PeopleForBikes (PFB) subcommittees met at the 21C Museum Hotel, including the electric bicycle subcommittee that I attended, along with Heather Mason. I will cover the topic of electric bicycles and lithium-ion battery safety in detail in another article, but will share that I remain disappointed at the American bicycle business attitude of treating the safety of consumers as someone else’s problem.
Wednesday got underway at the Record Event Space. The overall theme of the Conference was “creating the bike industry we want to see.” The focus was on three core topics and presentation tracks.
- Diversity, equity and inclusion, building a “welcoming culture within the bike industry and community,” and having the “tough conversations that get us there.”
- The post-pandemic reimagining of “manufacturing and assembly based in the U.S.” including fostering breakthrough innovation.
- Sustainable cycling and sustainable climate initiatives with a circular ecosystem, and what they really mean to the American bicycle business, including “what it takes to create a greener and healthier future.”
As I have noted, the second and, third-day presentations were about five blocks from the 21C Museum Hotel, at the renovated Record Event Space with two halls, both capable of seating the SHIFT’22 approximately 250 attendees.
AV, staging, and lighting were all first-class, as was the program. Speakers and panelists were also first-class. Walmart managers and executives, and the Walton family, were well represented throughout.
At this point I think it appropriate to mention the “aspirational” nature of this conference, and what it represented relative to a potential change in direction for the bicycle business.
One of our clients attended the conference, and about half-way through we talked. He said the topics and presentations were very “aspirational,” but not grounded in the reality of the current situation the American bicycle business faced. We met again toward the end of the conference. He said he had asked a member of the PFB staff about this and, was told it was on purpose.
The plan going forward is for the SHIFT Conference to be held in Bentonville in the Fall, focusing on the “aspirational” issues of creating the bike industry we want to see, with the Dana Point conference in the Spring focusing on the current issues facing the bicycle business.
This tied into another observation we discussed related to the change in leadership. No senior PFB board members or top-tier company CEOs were present in Bentonville. Again, when asked the PFB staff said this was by design.
My thought process went along these same lines, as we are witnessing a change in leadership in this country and the world, but wonder if we are also witnessing the emergence of the Walton family as growing influencers and perhaps leaders in the American bicycle business.
As a long-time advocate for the bike shop channel of trade, I do not necessarily see this as all bad for American bike shops going forward, but I do think the bike shop channel of trade will need to stand up for why it is an essential part of the bicycle business, and define what role it will play in the economics of profitability going forward.
We have heard of the investments made by brothers Thomas and Steuart Walton, two grandsons of Walmart founder Sam Walton, in the bicycle business and the bicycling infrastructure in Northwest Arkansas.
Steuart Walton was a speaker on the second day of the conference, and sat for a Q&A session. His brother Thomas was also present in the audience. Together they operate RZC Investments, with 90% ownership of Rapha and ownership of Allied Cycle Works.
Although not discussed at the conference, I think it appropriate to mention Walmart started Viathon Cycles, a DTC carbon fiber brand founded in April 2019, that imports its range of bicycles and does not source from Allied.
Steuart is, in my opinion, a very good public speaker. He made a compelling case for the importance of bicycling to the environment, the future culture of Walmart, and the community of Northwest Arkansas. His presentation included the Ledger, the world’s first cyclable building that is a Walton investment, and will be completed in about a month.
The Ledger will house a Specialized Experience Center and the PeopleForBikes office that is moving from another location in Bentonville, along with other business entities that we are assuming will be tied to Walmart, the Walton foundation and Bentonville.
This leads to Bentonville itself. Here is what the PFB SHIFT’22 agenda said about the host town:
“Towns are the heart of America, and there’s a new American town on the map. It’s a town with a big heart and even bigger ambition. A town where modern progress meets rich history, where the arts meet innovation, and where companies meet communities. A town to visit, to see, to breathe and to discover. Visit Bentonville – a new American town.”
Bentonville is the posterchild for the Walton Foundation’s vision for Northwest Arkansas, and it is the focal point of a regional community from Fayetteville to Bentonville connected by an Interstate, embracing 15,000 Walmart headquarters employees and the world through the regional airport.
All of the Walmart executives and members of the Walton family that spoke at the conference referenced the new Walmart headquarters campus that is under construction on the edge of Bentonville. The goal is a completely sustainable office campus that is open and accessible to the public, who can walk and bike on bike trails that run through the campus.
Part of the objective is for 10% of all Walmart employees to commute to work by bicycle every day. The Walmart campus, like a collage campus, is designed to blend with the community so you will not be able to tell where one stops and the other begins.
Walmart is the largest retailer, employer, and seller of bicycles in the United States. The Walton Family Foundation has been a financial supporter of PFB and bicycling’s role in economic development for well over a decade, but until the SHIFT’22 Conference has been in the background.
COVID-19 accelerated changing the world and the bicycle business. One of those changes is in leadership, another is in supply chains, and still another is in retailing. All are trying to keep up with the changing wants, needs, habits and demographics of consumers.
I do believe that PFB and the American bicycle business will migrate from Boulder to Bentonville over the coming decade because of the combination of support for bicycling, equity, inclusiveness, sustainability, innovation and reshoring. None of this will be easy, but the third generation of the Walton family has expressed the desire to invest in what must be done to grow the bicycle business in America.
Early in the conference I took exception to the way PFB framed In America, and the post-pandemic reimagining of “manufacturing and assembly based in the U.S.” including fostering breakthrough innovation. Post-conference, I still do.
The session featuring “Innovators Driving Change Through Manufacturing” included Drew Medlock, CEO of Allied Cycle Works, Josh Richards, COO of Game Composites, and Arnold Kamler, Chairman & CEO of Kent International.
I know Arnold Kamler, and have the greatest respect for him and his company, which includes Bicycle Corporation of America (BCA), the largest American bicycle assembly plant located in Manning, SC. Walmart is BCA’s largest customer.
Allied Cycle Works is a DTC, high-end carbon fiber brand that has an excellent reputation and product that is in demand because it is hand-built in Bentonville Arkansas. Allied is owned by RZC Investments, a Walton company.
Game Composites manufactures carbon fiber sport airplanes located at the Northwest Arkansas regional airport. These are top-of-the-line, and expensive even by the standards of the stunt flying aficionados who line up to purchase them. Game Composites is owned in whole or part by the Walton family.
I first want to wish Arnold Kamler congratulations on his 50th year in the bicycle business!
Next I will point out the obvious: BCA is assembling 250,000 to 300,000 bicycles for Walmart annually in a modern facility that is capable of complete manufacturing, which means fabricating frames and forks, in addition to wheels and finishing, as well as assembling and packaging them in multiple shifts with capacity that could total 1 million units per year.
There are multiple reasons for not ramping up production, including frame and fork fabrication. While each can be overcome, particularly with the help of a retailer of Walmart’s size, Arnold will be the first to tell you that none of the solutions are easy, none were discussed at the conference, and all are years away.
The gap between the portion of the American bicycle market that Allied Cycles serves, and the portion that BCA serves, is where the business lives. It is also where it will have to adapt to change if it is going to survive.
The total lack of discussion of the innovations and creative thinking (the “aspirations”) that will be needed to actually achieve a combination of decoupling from Asian sourcing, near-shoring and reshoring, sums up why I still take exception to the way PFB framed In America and the post-pandemic reimagining of “manufacturing and assembly based in the U.S.”
As to my prediction that PFB will migrate from Boulder to Bentonville, I think it is inevitable given the financial momentum. The bike shop channel of trade needs to rethink its relationship with all the other channels of trade for bicycles, and change with consumer wants and needs to adapt to Walton Foundation and Walmart leadership.
This includes the bike shop channel of trade standing up for why it is an essential part of the bicycle business, and what role it will play in the economics of profitability going forward.
Contact Jay Townley, jay@humanpoweredsolutions.com.
