The Board Shorts Executive

25 years later, the Vans Triple Crown is the culminating event in a billion-dollar surf industry. But how long can its organizers keep it a grassroots affair

January, 2008

His thick, wet hair combed back seconds ago, Randy Rarick, executive director of the Vans Triple Crown of Surfing, warmly greets his 10 a.m. appointment at the doorway to his home office. The O’Neill World Cup, the second of three contests that comprise the Triple Crown, was hit by a drop in wave heights and some inclement weather and Rarick had just called off the day’s competition. So, after a string of 14-hour days, he took a rare break in the contest season to stroll the couple hundred yards from his house to Sunset Beach and experience a little of what he got into all of this for in the first place.

He surfed.

“I had an office in Haleiwa a few years ago,” says Rarick. “I would get up in the morning, drive eight miles, have a cup of coffee, and then sit down and answer the phone. After a while of doing that I thought, ‘What am I doing? I can do this at home. The people that I work with are not going to be impressed by an office.’”
Rarick explains that in the surfing industry, your knowledge of the sport and your integrity to its spirit and lifestyle are paramount. It’s something akin to Street Cred. Call it Surf Cred. Rarick quickly adds that he has had plenty of highly productive board meetings in between sets of waves. But what is really striking about this late-morning scene -Rarick and his operations manager beside a stack of surfboards, hair wet, in shorts, in the middle of the workday, in the middle of the Triple Crown -is not their business style, but that their business style has persisted, even though the surf industry today is estimated by analysts to be a more than $10 billion, global industry.

Certainly to the casual passerby, the size and importance of the event Rarick and his team pull off with a $1.3 million budget might not be readily apparent. To international surfers, the Vans Triple Crown is to surfing what Daytona is to NASCAR and Wimbledon is to tennis. Not merely an event but the culmination of the previous year’s world tour, broadcast to millions worldwide, live on the Internet. “All the events on the world tour are important. But the one that makes or breaks your image is Hawaii,” says Rarick.

The event also brings with it a good deal of revenue. Last year, the event which extends from mid-November to late December, attracted approximately 32,000 spectators for the triumvirate of men’s and women’s surf contests and infused $14.6 million into the local economy. That deluge of people includes surfers, surfing magazine writers and photographers, and surfing fashion moguls of global corporations who network and party and make deals during the event.
Indeed, for a few weeks each year, the North Shore is the center of a massive global surf/fashion industry. And the center of all the activity is Rarick. Inside a small room beneath a stairway, under his house, below four stacks of surf boards, packed with model tanks and surfing memorabilia, 200 yards from Sunset Beach, is Ground Zero of the Triple Crown.

Humble Beginnings and the pressing business question on that seemingly laid-back, surf-break Friday morning is just how long can such a big industry event operate out of Rarick’s house? How long can an industry with publicly traded companies still have board meetings in the surf?

The roots of surfing may go deep into Hawaiian culture, but in the 1970s, it was given less than royal treatment in its birthplace. Back then, it was hard to convince the City and County of Honolulu Department of Parks and Recreation that surfing was a legitimate sport and its events were worthy of the standard permits given routinely to organizers of baseball or football tournaments.

“I don’t know how many times I would come into their offices and they would look away as if I wasn’t there,” recalls Rarick. “It was like ‘Oh, the surfer guy is here.’”
To the mainstream then, surfing in Hawaii, as it was elsewhere, was an activity done by people who smoked pot, lacked ambition and financial means, and generally provided little to the community. Surfing was the epitome of the idleness of youth. Future leaders played golf and tennis.

So in the early 1970s, Rarick, who was one of the few local pro surfers, teamed up with state Sen. Fred Hemmings, who was then a well-known surfer and surf promoter, to change that image. Rarick started helping Hemmings operate surf contests from a card table set up on the beach. His public address system was a plastic bullhorn. “I made maybe a $100 bucks [for an event],” says Rarick.

By 1982, Rarick, fed by his love for the sport, was regularly organizing the events for Hemmings at Pipeline and Sunset Beach and the events were growing. But in 1983 as they were in the midst of developing a professional surfing world tour, a rival world tour was being organized out of Australia. The Australians won out because they had a high level of corporate and government financial support. “Government support for athletic events lends credibility to an event and to a destination,” said Rarick. “We didn’t have it. Even though Hawaii was where surfing started, the Australians made it their national sport and made it work for them.”
Rarick says, “It took me nearly three years before I was able to get a surfing event with some stature again.”

In the meantime, Hemmings was looking for a new angle for Hawaii. He still had the exclusive rights to two of the most important surfing events and locations on the planet: the World Cup of Surfing at Sunset Beach and the Pipeline Masters at Ehukai Beach. He created a new event – the Hawaiian Pro at Haleiwa Beach – linked the three events and dubbed them the Triple Crown. Rarick continued organizing the events, but still on a shoestring budget of $30,000.
Then something extra-ordinary happened.

Surfing became much more than a sport. It became a massive merchandising industry. The slacker image of surfing was flipped. Surfing came to represent living a pure life and its image became a perfect tool to sell trendy clothing lines. Surfers were the youthful in-crowd. Then in the late 1990s, women’s surfing hit the big time, too. The retail market exploded.
First Generation Marie Case, the managing director of Board Trac, the leading active sportswear market research firm, says by 2001, the surf fashion industry generated revenues of $2.39 billion in US sales. Then the surf movie “Blue Crush” came out in 2002, along with such programs as MTV surf shows and the Disney movie “Lilo and Stitch.” The numbers of surfers increased from 1.6 million to 2.1 million, mostly fed by the increase in female surfers. With more women buying surf wear, revenues spiked. In 2003, surf fashion generated $4.1 billion. “That was the high point. After that, it fell and the latest sales figures in 2006 indicate sales of $3.4 billion,” says Case.

But with Gen Y increasing in buying power and a perfect ideological fit for the surf culture, numbers are expected to jump in the next few years. The Internet is powerful in leveraging niche markets. Plus, the women’s surfing market continues to mature and grow.

Lindy Williams is the assistant marketing director for Reef, a San Diego-based surf company, owned by the New York-based VF Corp., which sells popular youth brands like Lee Jeans and North Face. As evidence of future growth, Williams says the company has created its first women’s clothing line to be launched this year. “Our [newest] customer is the surfer girl from San Clemente, Calif., who surfs every day. But we know that other girls throughout the country and the world are going to be influenced. It’s the fantasy thing -living the laidback beach lifestyle in Hawaii. How can you not be influenced by it?”

And in that fantasy, the North Shore and the Vans Triple Crown are Shangri-La.

Patrick J. “P.J.” Connell, marketing director for Reef, estimates that his company spent five months and approximately $350,000 this year ($100,000 in Hawaii) on the Triple Crown, sponsoring the Reef Hawaiian Pro at Alii Beach in Haleiwa.

With Connell came not only other marketing managers, but team riders, team managers, specialists in store promotion as well as, for a few days, Reef CEO John Wilson. Wilson explains, “Our participation in the Triple Crown is because it takes place in the Mecca of surfing.”

As more evidence of the Vans Triple Crown’s reach, even unrelated companies are interested in North Shore surf: Apple has just signed a contract to use contest photos in its advertising, Rarick says. Robert McKnight, the chief executive officer of Quiksilver the largest surf wear manufacturer in the world, says he sees “no end in sight” to the market growth as a result of the inclusion of action sports like surfing in mainstream marketing. Worldwide today the surf fashion industry alone already creates upwards of $10 billion in sales.

Needless to say, Rarick doesn’t have so much trouble finding sponsors any more.

Jodi Young Wilmott, the public relations and media director for the Vans Triple Crown, is inside the media trailer, lifting her bare feet in the air, smiling. She’s explaining that no one on the Vans Triple Crown team wears shoes.
Australian-born Wilmott grew up on the North Shore with the family of surf legend Eddie Aikau. A former professional surfer, Wilmott works with people who were once her babysitters. She is a perfect example of how the industry operates among a tight-knit group of people, who were raised on and deeply respect the sport and the love for nature and life it represents.

But can that grassroots atmosphere continue to exist with as much money as is involved in the sport now? “If you look at the major companies [in surfing], they formed at the end of the ’60s and in the ’70s. They were started by people who were young surfers then, and those surfers are in their 50s now,” Wilmott says. “We are in the first generation of ownership.”

So certainly, Wilmott admits, that could change as those CEOs retire. Already today, there is no shortage of lawyers and other corporate trappings back at company headquarters for many surf industry companies. But for now events like the Triple Crown are safe, says Wilmott, because the people who ultimately control the industry today are still in touch with its roots and what it’s all about. That has kept the running of events honest and true to the sport and not over-commercialized or overdone. Products, too, have remained high quality.
Home OfficeAnd it has also kept the emphasis on people having Surf Cred, and put great value on people who operate home offices 200 yards from Sunset Beach.
None of that is to say Rarick’s job is easy. On a typical day during the contest, Rarick and his team work 14 hours. Some work more than that. Administrative director Faith Takamure Wenzl, who has an eye on every detail of the contest, says, “I sleep maybe two hours a night once the Triple Crown starts.” From checking surf conditions to corralling contestants to handling sponsors, photographers, videographers, writers, and spectators, and the logistics of ensuring the international Web broadcast, to maintaining safety in a dangerous sport, it’s a heavy load.

Then there are aspects such as community relations. “If one of the neighbors doesn’t like the sound of the competition horn going off at 7 a.m. on the day of competition, they call me,” Rarick says. Nowadays, though his team is part-time, he works year-round on planning the contest with his contest director, Bernie Baker.
Rarick may work from home and take a surf break or two, but he puts in long days, too.

Sitting back in his office, Rarick contemplates a Bishop Street office.
“It would be real easy to move to Honolulu, and create more business credibility when we meet with sponsors. And this could be a bigger business,” Rarick says. “But that wouldn’t be real.”

The surfing industry is as much about a lifestyle as it is about business. The marketability of it is tied to its authenticity. Rarick says there have been companies who have moved away from surfing roots, like Ocean Pacific, which went to mainstream department stores, but the company, he says, lost credibility. Or companies like Abercrombie & Fitch, which, he says, tried to buy into the market by creating a surf wear line that fails the sniff test. People don’t believe surfers wear those clothes or even endorse those clothes.

Rarick, though, is not opposed to all the growth of the surf industry and the international sponsorships for the local event. “I think it allows us to hire more local support for the event in particular. The local sponsors like Town and Country and HIC have limited budgets but outside companies with larger funding actually help Hawaii.” (Currently, the Hawaii Tourism Authority still provides little funding for surfing, he says.) Local businesses on the North Shore benefit, too, and surfers can make a living competing today. Most of the more than 200 professional surfers earn between $50,000 and $100,000 per year, an estimated 22 make six-figure salaries of between $100,000 and $300,000, and five make as much as a million dollars. Some of those are local people.

However, Rarick is adamant that things can be taken too far. That’s also why he doesn’t want to see more surf events on the North Shore.
“When I am not running the contest, I live here. We don’t want more surf contests. We have reached a saturation point,” he says. Indeed, there is a contingency of North Shore residents who don’t even want the Vans Triple Crown and all its traffic. Rarick says it’s a balancing act, because the event brings in a lot of money for local business, creates jobs and goes a long way toward promoting Hawaii internationally.

“But there is a point that you can go too far,” he says, both for the community and the sport. In that vein, it’s Rarick who is the advocate to respect the local community where the event is held and to also ensure that local surfers get a chance to compete. Says Wilmott, “Rarick is a ballast and an anchor. He keeps everyone involved balanced and he keeps the sport true.”

But whether there are more surfer CEOs to follow is certainly not a given. For the immediate future, you can expect the Vans Triple Crown to remain grassroots. Until Rarick retires, at least.

“My plan is that in 10 to 20 years from now, I want to be like some of the retired surfers I know,” Rarick says. “I will sit in a nice chair on the beach and, if anybody asks, I will dispense any wisdom and information that I have learned.”
As long as the next executive still does business that way.

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Mike Markrich