Can Anyone Save the Surf Industry?

Worldwide interest in surfing, when measured by the volume of Google searches for the sport, has declined at an alarming rate over the past decade. During this period, some of the surf industry’s biggest players, Quiksilver (Ticker: ZQK) and Billabong (Ticker: BBG), have been sucked into unprofitability with no hope for a turnaround in sight… or is there?

A Tale of Two Surf Industries

Recently, while playing around with Google Trends, I came across Google’s sayonara to the surf industry. The mainstream surf industry, that is.

What do I mean by mainstream surf industry? Well, it can be directly contrasted with the core surf industry in that the former looks to target non-surfers for aggressive growth, while the latter survives off of surfers and the surf community.

The mainstream surf industry is a unique type of animal. It’s aggressive. It wants money, it wants growth. It has to answer to shareholders and bank analysts. It’s pretty much “EPS growth or bust” for this side of the surf industry. They need to get into every department store in town, leaving their surf cred to dissolve in the process (they balance this out by sponsoring good surfers; it’s all part of the game). To put it another way, it exists to reap the rewards from the possibility that one day surfing will “become the next football”. The dream of a near future where surf pools are as common as Starbucks cafes, Slater presents the Oscar for “Best Supporting Actor” every year, and “Monday Night Football” sees its ratings cut in half whenever John John is surfing a heat at Pipe (or at any other spot, for that matter).

We all know this hasn’t happened yet.

At one point in time, however, the idea was actually not that far-fetched. Slater was on Baywatch (and pretty much dating everyone and their hot cousin), Quiksilver and Billabong were punting with the big dogs up in Wall Street, and surfing seemed like it was on the road to gaining worldwide notoriety. How has it played out so far? The following graph, which compares historical worldwide Google searches for “Surfing” vs. those for “National Football League”, may be able to answer that question:

Source: Google Trends

Adjusting for seasonality -pretty roughly-, one could assume that in 2004/05 worldwide searches for these two terms were pretty much on par, a completely different story from the present day reality. The clear divergence shows, amongst other things, the growing worldwide popularity of American Football and that surfing, well, just isn’t considered as cool as it used to be.

But surfing is cool, I swear!

I thought so too, trust me. Having lived in the surf world’s bubble for the past x number of years, I still thought surfing was the hottest thing on the block…. or at least I did until yesterday. The surprise of its consistently deteriorating popularity is what [single-handedly] moved me to write this article. I eat, sleep, and pretty much breathe surfing. I get it force-fed down my throat day-in day-out through my social media feeds, not to mention everyday convos and pretty much just life. For example, I consistently get sold on what’s cool by Whatyouth’s IG account (no wave air shots, lo-fi tracks, being artsy, @ilovetables’ latest grab and/or lifestyle shot…) and I dig it, I just always thought -maybe somewhat gullibly- that so did the rest of the world.

But they do not. (Keep in mind that I’m not necessarily talking about surf fans’ interest in surfing, but in non-surf fans’ interest in our sport)

They actually haven’t for a while now. This graph pretty much shows the world’s interest in surfing from 2004 to 2015 (draw your own conclusions):

Source: Google Trends

In terms of measuring worldwide online interest in surfing, Google searches could serve as very valuable indicators. The chart above shows a -64% decrease in worldwide Google queries for the sport of surfing (from 2004 to late 2014). The trendline after point “A” shows Google’s forecast, which predicts interest will decrease by another -3% by early 2016.

What if this trend continues? What will it mean?

Hmm... I won’t try to predict the future or anything, but there is one thing I sure am hoping for…

UNCROWDED SURF!

I mean, if global interest in surfing keeps declining (again, based only on online queries), it might eventually happen. Surfing epic Swamis with only you and your BFF out could be just around the corner. Well, maybe not juuust around the corner, but you get the point.

Unfortunately, should this doomsday scenario actually occur there will be victims. Surf brands, especially surf clothing companies like Quiksilver (Ticker: ZQK) and Billabong (Ticker: BBG), could continue to feel the negative effects of this decline in worldwide interest. I say “continue” because they’ve already been feeling this impact for years.

Source: Google Correlate

The decline in worldwide interest in surfing has been taking its toll on surf brands for almost a decade. For example, let’s look at Quiksilver, the highest correlated Google query in connection with professional surfing. If you go to Google Correlate and look up “Association of Surfing Professionals” (the ASP), the #1 correlated search is “Quiksilver surf”, with a positive correlation of 0.7213. This could be interpreted as “when less people are Googling about surfing, less people are Googling about Quiksilver”.

So what happens when less people are interested in Quiksilver? Well, let’s let Quik’s historical stock price give us an idea…