Rusty Caters To The Boarding Generation
Will this strategy lead to success in snowboarding?
By Sean O’Brien

How would Burton build a surfboard? That’s the question they’re asking themselves at the new Rusty snowboard factory in San Diego.

It’s been more than ten years since a young, brash Australian surfer named Mark Occhilupo rode to the top of the surfing scene with a string of wins. Occhilupo, or "Occy" as he’s known, added a star-like appeal to the Rusty surfboard he rode—an appeal that eventually helped propel the surf-apparel and board company to 50-million dollars in annual sales.

At the heart of Rusty’s success is its reputation and focus on hardgoods. Rusty simply makes great surfboards. This fundamental strength has provided Rusty apparel with a degree of authenticity not found with many other brands. Even though Rusty apparel can be found in a surf shop or at a large department store like Nordstrom, it has so far retained its core appeal among young shoppers.

Now Rusty hopes to makes further inroads to the snowboarding market, a mission it started in 1993 with the introduction of Rusty snowboard apparel. However, it wasn’t until this year that the company fully committed to the sport by opening its own snowboard factory.

Located just next door to the surfboard shaping bays of Rusty Presindorfer, founder and president of Rusty, the snowboard factory is small, clean, and innovative.

Henry Hester runs the factory for Rusty. A familiar name in both the skateboarding and snowboarding industries, Hester was formerly the sales director at Mervin Manufacturing and worked for G&S Snowboards. These positions round out his career in the action-sports industry dating back to his days as a pro skater.

Hester is justifiably proud of the factory and its owner. "Why hide from who you are?" he says. "We’re a kick-ass surfboard company, and we’re now making innovative, kick-ass snowboards."

With so much OEM capacity available within the industry, why did Rusty spend 500,000 dollars setting up its own factory? "Customers who know the Rusty label know that we’re famous for our quality surfboards," says Hester. "They simply expect that we make our own boards. We didn’t feel we could sell a single board that we didn’t make ourselves. We wouldn’t be true to our roots if we did."

The factory will eventually have an annual capacity of 10,000 boards. However, Hester says that this year—the factory’s first year of production—only 3,500 boards will be produced, 1,000 of which will be shipped to Japan. Hester admits that with these production numbers, even if the boards sell out, their impact on the mountain will be minimal: "It’s pretty unlikely that you’ll see a Rusty board on the mountain this year, but I think the word will get out and demand will grow." The factory employs ten workers, and Hester says it will be profitable when it hits the 6,000-board-a-year mark. A portion of the factory’s capacity will be devoted to the manufacture of wakeboards—another activity that Rusty is extremely interested in.

The snowboards use prepreg construction and triaxial fiberglass. The higher-end models also sport proprietary Tri Hull construction, where the woodcore is cut lengthwise into three pieces, then glass is added between each strip to create a triple torsion-box system that increases the torsional stiffness of the board.

"Head Skis first came up with the Delta V concept—which is similar to what we’re doing. Rusty is the first company to use this idea with snowboards. Torsion is where it’s at—boards with better torsional stiffness hold carves better."

Although the factory is small, it’s well thought out. Rooms are climate-controlled according to the needs of the materials—prepreg fiberglass needs to be stored at specific temperatures; woodcores require a specific humidity. The topsheets are screened in neighboring building, assuring quality control and quick delivery. Because of the prepreg process, there’s none of the stench or resin drippings associated with wet-lam factories. The factory is remarkably clean.

The two double-presses are custom-made, all steel, and computer-controlled. Hester’s goal is to churn out one board every seventeen minutes—ten months a year—for 10,000 boards. It’s a lofty goal, but Hester is planning his factory for the future.

Hester says that having Rusty apparel already established in a retail shop will greatly benefit snowboard sales, especially with the current atmosphere of consolidation. "Retailers are looking for companies they can trust," says Hester. "They may drop twenty lines and pick up two new ones, if it’s companies with a proven track record."

Interview With Peter Townend

SNOWboarding Business spoke with Rusty Marketing Director Peter Townend at Rusty’s Irvine, California offices and got the lowdown on the company’s "Boarding Generation" marketing concept, its commitment to snowboarding, and what makes Rusty unique in the snowboard industry.

What makes Rusty newsworthy for the pages of SNOWboarding Business?

We’re probably the first true crossover company. We’re the only company that’s truly doing surfing, snowboarding, and wakeboarding and being true to it all. We’re not just running the ads in the mags to align ourselves with the lifestyles. We’ve made a huge investment in each activity.

Do you think that factory down there in San Diego was cheap? We’re investing in our future. That’s no lightweight commitment. Our goal is to be the company that provides equipment for boarding.

Our strategic goal is to be the number-one crossover brand. We can’t be Burton. It’d be like Burton saying, ‘We’re going to be Rusty Surfboards.’

However, because of its manufacturing expertise and marketing muscle, Burton could probably build a good surfboard and sell them. Of course, Burton wouldn’t outsell Rusty or Al Merrick, but they would make good boards. That’s were Rusty is coming from when it comes to snowboarding.

If you go back a couple of years, we probably thought we could be Burton. However, that’s unrealistic. Ultimately, we don’t need to be another Burton. What we need is to build great product. If we build snowboards that work, and good snowboard apparel, and if we get guys like Elliot Olson and Tommy Chezan to use these products, then we’re going to have success and grow.

Our relationship to wakeboarding will have a huge influence on our long-term success with snowboards. When it comes to the wakeboarding market, Rusty is what Quiksilver was [to surfing] in the 70s. It’s a cool brand, and wakeboarders wear our trunks because the trunks look cool and our brand’s cool—not because they’re sponsored by us. That will influence our overall boarding generation strategy.

Right now, being in snowboard hardgoods is a hell of a fight. Coming off a disastrous season, retailers have too much inventory and they’re praying to God that it snows this year. Once upon a time, a poor winter didn’t affect summer business. Now, if we have a shitty winter, summer will also be shitty because retailers won’t have enough money for open-to-buy, so it affects the next season.

How important is the surf shop for snowboarding?

The stand-alone surf shop was a thing of the 80s. Now, the surf and sport has become a "boardsport" retailer. At a retail level, you’ve got to be doing two or three of the board sports—skateboarding, snowboarding, wakeboarding, or surfing—to be successful. Which of these sports you carry depends on where you’re located.

The foundation of our brand is hardgoods. We’re a hardgood manufacturer of three of the four categories [surfboards, snowboards, and wakeboards].

How large a company is Rusty?

It’s a 50-million-dollar company. However, look at Quiksilver and Billabong. Quiksilver does 400-million dollars worldwide. They can do a lot more things, and afford [to sponsor] Kelly Slater. Billabong is also a lot bigger than we are. They’re probably three times as large as Rusty. Then again, they’re two or three times as old as Rusty—both brands are 25 years old.

Why did Rusty first enter the snowboard industry in 1993?

We probably got into it because the design team was into it, and they didn’t want to wear anybody else’s stuff. I’m the one who got us into wakeboarding, because I saw wakeboarding was to water skiing what snowboarding was to skiing. Everyone else in the building laughed. Everyone thought, "You’re crazy—guys being towed behind boats!?" Let me tell you, those river rats are the same types of guys who are on snowboards or surfing the beachbreaks back in California. They just live on rivers.

If you go back twelve months, snowboarding was the hot thing in the mainstream media. This year, it’s wakeboarding. Newsweek, Glamour, Mademoiselle, Vogue—they’ve all got wakeboarding in there.

Many surf companies got into snowboarding to balance out the seasonality of their business. Was that the case with Rusty?

We already had a huge winter business before we went into snowboard apparel. Our back-to-school fall apparel was stronger than our summer apparel. Our goal is to have good product in both hardgoods and apparel, and then market it as part of the overall brand strategy.

Right now, the only guy I would like to be in the snowboard business is [Jake] Burton. Nobody does it better. It’s the Nike of the business.

Even in these competitive times, you’ve gone and built a new snowboard factory. Why get in now?

We believe we can build a good product that people will buy. We didn’t just go out and stick our label on a board coming out of an OEM factory with ten other brands.

Why didn’t you go to an OEM?

Rusty wanted his hands on the controls. Rusty doesn’t shape every surfboard, but he designs every one, and he looks at every board. His name is on them, so he wants to know that the quality is the best.

What’s going to keep you alive and kicking when other snowboard companies are being flushed?

Once upon a time, skaters didn’t like surfers and the surfers didn’t like this or that. I don’t see that now. There’s much more crossover between the whole thing. Surfers, skaters, snowboarders, and wakeboarders all like each other and they all want to learn how to do each other’s thing. So, having Rusty established in all these areas will build the brand loyalty a company needs to survive.

What’s going to be more of a factor for Rusty, wakeboarding or snowboarding?

I think they have equal opportunity. However, from a brand-positioning viewpoint, we’re already stronger in wakeboarding. Snowboarding is way more competitive and there has been resistance about beach brands infiltrating the snowboarding marketplace—which is ridiculous. Why did snowboarding begin? Because guys wanted to surf on snow! You have this new generation of snowboarders and snowboard companies who either live in the mountains or were skiers. It’s like, all of a sudden they invented snowboarding. Surfers invented snowboarding—or guys who wanted to surf on the snow. I just laugh when these guys start judging the credibility of a company like Rusty. The whole thing grew from surfing!

How many snowboarders are also surfers?

You’re getting more guys who are crossover boarders. They want to do it all. Twenty or 30 years ago, when I was a kid, we just surfed. We didn’t want to know about anything else. It’s pretty cool being a grommet these days. There are a lot of options. That’s a real advantage for Rusty.

What percentage of Rusty’s sales are from the snowboard division?

It’s a small percentage. It’s probably not even six or seven percent. However, what’s hard to qualify is how our snowboard line has opened up new retail distribution for us. Some of our workshorts and lighter-weight apparel wouldn’t be selling in these retail stores if these stores weren’t first exposed to Rusty snowboard apparel. You can’t qualify the snowboard line’s impact on the brand just by the number of snowboard jackets and pants we sell.

Who’s a typical customer for Rusty snowboard?

Probably a guy or girl who fantasizes about boardsports and knows the Rusty brand from its surf roots. They may already have had a pleasant experience with a Rusty product. Brand loyalty is very important. That’s why if a consumer buys a Rusty product—a surfboard, pair of sunglasses, trunks, jacket, or snowboard—the product has to live up to their expectations.

So it’s important for people to know the Rusty brand before they enter a shop?

Right. It’s not a science. It’s a lot of gut feeling. Where do you advertise it? Which athletes do you hire? Now that we’re catering to wake, snow, and surf, the Rusty name isn’t limited by consumers’ proximity to the ocean. We just did some research in the middle of the country, and we were amazed at the brand awareness of beach brands. It was pretty staggering. I mean, with teenage kids, the names just rolled off their tongues.

How do you stay focused as you serve these different markets?

We have brand strength—we build good products. When you start doing lots of categories, people say you’re a sellout. However, if you can keep your distribution clean and not whore it out, your image and your product will acceptable at the ’core stores.