The news that outdoor products company Yeti acquired backpack brand Mystery Ranch yesterday sent a shockwave through the industry, as both brands have dedicated followings and strong enthusiasm from core outdoor participants.
The move could help strengthen Yeti’s luggage offerings as well as give Mystery Ranch access to a broader dealer network, according to industry analysts.
The Daily connected with outgoing Mystery Ranch President Alex Kutches, a financial analyst who covers Yeti, and a veteran outdoor industry consultant to get their insights about the deal.
“A Number of Similarities”
The acquisition led to Mystery Ranch’s President Alex Kutches departing the business. Yeti is technically in a quiet period ahead of its Feb. 15 earnings release so did not comment beyond its announcement, but Kutches sent an emailed statement to The Daily.
“During my tenure I was tasked with finding the right partner to bring Mystery Ranch to the next level, and we found that in Yeti,” Kutches said. “I have been inspired by Yeti’s ambitions for growth and immediately recognized a number of similarities between our two companies – from customers to product philosophy, broader company goals and core values.”
Kutches added that under Yeti’s ownership, Mystery Ranch can gain access to new audiences and partners to help the company get its products into new customers’ hands.
“After working closely to successfully transition the business, I am excited to focus on my next adventure,” he said.
Acquisition Consistent With Yeti’s Messaging
Anna Glaessgen, a financial analyst who covers Yeti for B. Riley Financial, said her firm sees the acquisition as consistent with Yeti’s messaging over the past few years.
Glaessgen cited 2022 comments from Yeti leadership that said investments from an acquisition in technologies and material could give Yeti a “head start.”
Glaessgen also pointed out that Yeti “launched its soft bag and luggage line ‘Crossroads’ several years ago and likely sees opportunity to leverage Mystery Ranch’s innovation in high-performance backpacks to augment their offering.”
“From Mystery Ranch’s point of view, Yeti brings a strong track record of innovation and brand integrity, capacity for growth investments, and a robust dealer network,” Glaessgen said.
An “Interesting Marriage”
Veteran outdoor industry analyst Matt Powell said he sees this move as an “interesting marriage,” and that these two brands are similar in many ways.
“They both make a premium product that has highly technical features and attributes,” he added.
Powell also sees the customers of the two brands as “not necessarily dissimilar.”
“It helps Yeti diversify themselves away from just being a coolers, drinkware, and luggage company,” he said. “I think Mystery Ranch is a great company. I think Yeti is a great company. So I think this is a good marriage.”
Powell also noted the similarities with Helen of Troy owning drinkware brand Hydro Flask and backpack brand Osprey.
As far as the future opportunities for Yeti and Mystery Ranch, Powell emphasized Yeti’s ability to capture the lifestyle market along with making technical products.
“This is a point that the outdoor industry really misses,” he said. “The money is in the lifestyle stuff. The money is not in the hardcore user stuff. If a brand wants to stay pure and only sell to pure rock climbers or pure fisherman, they can do that. But they will doom themselves to being a smaller business than they possibly could be.”
Bart Schaneman can be reached at bart@ordaily.outdoorretailer.com.
