Black Diamond and PIEPS — What will MEC do with these brands?
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Today, Mountain Equipment Co-op and Recreational Equipment Incorporated both released statements that they will suspend their relationship with Vista Outdoors.
At first glance, it appears that they have taken the same action. A closer look reveals many differences and potential pitfalls with the MEC approach.
The two statements are here. Give them a quick read first.
Key question: Why is each organization concerned about Vista Outdoor as a supplier?
REI:
The explanation is clear. They want evidence that their suppliers take appropriate actions to ensure that their products are being used responsibly. They no longer feel that Vista Outdoor is meeting that standard.
MEC:
There is very little about the MEC letter that is clear. The message appears to be along the lines of: A lot of our members told us that they don’t want us to buy any products from companies that are also involved with modern sporting rifles (aka assault-style weapons) and so we are no longer going to carry any products made by Vista Outdoor.
The immediate impact of the REI approach and the MEC approach is the same. Both organizations will stop carrying products from Vista Outdoor.
What happens in the following months and years is very different though. The MEC approach is more complex, will cause more challenges for MEC, and will arguably be less effective at creating positive change.
There are three big problems with the MEC approach:
1) The co-op must drop Black Diamond and PIEPS for the sake of consistency
MEC management has appeared to establish that they will no longer work with companies in the assault-style weapons industry (aka modern sporting rifles). That list is larger than just Vista Outdoor.
There is a trend in the outdoor industry to consolidate outdoor sports and shooting sports companies under a single umbrella. In August of 2017, the company that owns Black Diamond and PIEPS purchased Sierra. Sierra is a major manufacture of bullets, including bullets used in assault-style weapons (aka modern sporting rifles.) Sierra even works with Federal Premium (a Vista Outdoor company) to provide bullets for the Vista Outdoor (Savage Arms brand) assault-style weapons.
This investor presentation goes into more detail into the holding company called Clarus Corporation. It also states a clear intention to continue to acquire additional companies.
Based on the content of his open letter, how could the CEO of MEC justify dropping all of the Vista Outdoor brands but keeping Black Diamond and PIEPS? In my opinion, he must now move forward to drop Black Diamond and PIEPS as a brand.
On the other hand, can we effectively deliver on our core purpose without Black Diamond? The co-op carries over 300 items from Black Diamond across most of the core categories.
The purposes of the co-operative as captured in our rules of co-operation are:
a) designing, manufacturing, purchasing, selling and renting products for self-propelled wilderness oriented recreational activities, and
b) marketing goods and services produced or supplied by members, and
c) any business which may conveniently be carried on in connection with those businesses.
The co-op plays a very important role in enabling Canadians to engage in self-propelled wilderness oriented recreational activities. We must be cautious about picking battles, especially political battles in other countries, that undermine our ability to deliver on that core purpose.
2) We’ve lost our leverage
REI has made a clear ask of the supplier. I anticipate that REI will be successful in causing the supplier to take some steps that will reduce gun violence. At that time, REI will be able to bring back some or all of the products from the supplier for the benefit of REI members. On the other hand, MEC appears to have said that they do not want to work with the supplier so long as they are a gun company. It’s very unlikely that this company will split up and so MEC has essentially opted out of the opportunity to place leverage on the company and hasn’t provided a feasible path for members to regain access to these products.
3) The process sucked and is divisive
In a handful of days, management looked at social media comments and decided to make a dramatic change to our sourcing policy that will divide the membership.
From a governance stand-point, I am bothered that MEC did not take steps to put the matter to a vote in the spring election. We don’t know who the people on the internet were and there is indisputable evidence that many of them were from the US and likely not MEC members. What about the vast majority of the 5 million members that did not have a chance to voice their opinion given the speed at which this happened? This is important because MEC pointed to the member feedback as the reason why they made this decision.
As someone who has stood on the ballot in a Board election and heard from members from across the country, I know that there are other issues bubbling below the surface. There are members who want to boycott companies for a wide range of different reasons and many of these debates would only further serve to divide the membership. With over five million members, we need the management team to focus on building consensus around our core issues so that we can make the largest positive impact in enabling people to access the outdoors.
The path forward certainly looks more clear and more effective for REI. I hope that MEC management takes a step back before doing anything else.
