Campagnolo dreams bigger with aggressive new growth strategy

Ekar EPS, aluminum gravel wheels, and new 13-speed mechanical and electronic groupsets all seem like safe bets in the next year or two.

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For better or worse, there are just three major players when it comes to drop-bar groupsets. Shimano is the undisputed volume leader, and the company just celebrated its 100th anniversary after kicking things off with a simple single-speed freewheel in 1922. SRAM is the relative new kid on the block, having started with its iconic Grip Shift twist shifter in 1987 and eventually establishing itself as the solid number-two brand in terms of volume. And Campagnolo? The Italian icon isn’t quite as old as Shimano, having initiated production of its fabled quick-release skewer in 1933, but the perception of its heritage somehow manages to run much deeper.

Heritage isn’t everything in the modern cutthroat world, though, and for a variety of reasons, Campagnolo occupies more of a niche position within the cycling world — the stuff of well-heeled connoisseurs that want something to go along with their Colnagos, Pinarellos, Ducatis, and Alfa Romeos. More importantly from a business perspective, heritage alone doesn’t pay the bills, and rumors have circulated for ages that Campagnolo wasn’t nearly as healthy financially as Shimano or SRAM.

Things appear to be turning around in a big way in Vicenza, and Campagnolo recently launched a major brand initiative called “Dream Bigger” complete with a variety of somewhat opaque teasers and optimistic mission goals for the coming years. But what does this mean exactly, and what can we actually expect in terms of product? To find out, I had a chat with Campagnolo chief sales and marketing officer Nicola Baggio.

“Dream Bigger”? The campaign is intentionally vague, but also suggests, uh, bigger things to come. Photo: Campagnolo.

Learning from past missteps

Campagnolo refocused its sights on the mainstream road market with the debuts of its Potenza and Centaur groupsets in 2016 and 2017. Explicitly aimed at Shimano Ultegra and 105, respectively, both groupsets looked pretty good on paper, and performed decently well on the road. But neither was better than those ultra-refined competitors in terms of performance, and they were more expensive than their Shimano targets, especially at the OE (original equipment) level. One could also debate whether they were nicer-looking than their Japanese competition, and at that level of market, most customers didn’t seem to care much that Campagnolo was still manufacturing those groupsets in Europe, either (albeit in Romania, not Italy).

As a result, there was minuscule spec on complete bikes, and certainly little market penetration with those groupsets aftermarket. In essence, both were commercial disappointments. Centaur is still around today, but Potenza was quietly discontinued a couple of years ago.

“The evaluation at that time was to reach a correct tradeoff between potential volume and economy of scale in order to be competitive in OE with a correct price position,” Baggio explained. “In the end, the reality was that Potenza was reaching a price segment that was a little conflicting with Chorus and Centaur. That’s why the decision was made to keep the collection clean, and try to get a clear position by Centaur and Chorus of good-better-best. Potenza was not reaching the right volume that we were expecting and not the right economy of scale.”

Campagnolo had high hopes for Potenza that never came to be. Photo: Matt Wikstrom.

COVID and Ekar

Although the early months of the COVID pandemic were looking awfully dark for business, it’s been well documented at this point that the cycling industry on the whole enjoyed a massive boost in business as millions more people sought out ways to safely recreate outdoors.

Campagnolo has been no exception, but it’s also benefited from very fortunate timing. 

Ekar — its first gravel-specific groupset — debuted in September 2020, just a few months after most countries had locked down to some degree, and right when cycling sales were rebounding in a big, big way. Its lightweight 1×13 mechanical format offered something truly different to what you could get from Shimano or SRAM, it was high-end but still somewhat reasonably priced, and most importantly, you could actually get it.

Ekar has been an absolute sales juggernaut for Campagnolo as a result.

Ekar has singlehandedly revived the Campagnolo brand, especially when it comes to the OE sales that are critical for any component manufacturer. Photo: James Huang.

At the time Ekar was launched, Campagnolo had five well-established road groupsets in its catalog: Super Record EPS and Super Record mechanical, Record, Chorus, and Centaur. But in just two short years, Ekar’s sales volume is now on par with the entirety of Campagnolo’s dedicated road catalog.

“Ekar opened a new segment to Campagnolo that is not cannibalizing the current one,” Baggio said. “Road is road, gravel is gravel. It is not overlapping; it is two different segments. That’s a clear point that added new, complementary business to the company, and extended our OE platforms because we were able to engage several new customers, or increased our business with current customers, including some big names.

“We entered with Ekar, which was — and still is — a pure innovation. It’s 13-speed, and it’s the lightest gravel groupset in the world. That innovation DNA is inside Ekar. At the end, the acceptance of that product and the creation of this business is so visible today that I can tell you in components, in volume today, it’s 50-50: 50 road, 50 gravel. And it continues growing. It’s not stopping.”

Ekar’s 13-speed cassette (and nine-tooth small sprocket) were major factors contributing to the groupset’s success. Photo: James Huang.

Put in more concrete financial terms, Campagnolo’s growth over the past two years sounds even more explosive. Campagnolo has reported a 45% boost in turnover since 2020 (basically meaning the company is selling stuff a lot faster than before), and almost half of the total turnover is reported to come from OE sales. That’s a five-fold jump since 2019, and the strongest standalone indicator of Ekar’s impact on Campagnolo’s bottom line.

Campagnolo’s persistence in maintaining EU production in general has also paid dividends. Whereas companies with more global structures were hamstrung by the supply chain bottlenecks and skyrocketing costs of overseas shipping, Campagnolo was able to stick to overland routes — at least for EU assembly factories. Combined with increases in production capacity related to Ekar that were already being planned before the pandemic, Campagnolo has had a comparatively easier time getting its products into people’s hands overall. Campagnolo says it’s increased its overall staffing by 30% and its total production capacity by 75%.

“We take advantage of the momentum, which created opportunity for all of the [bicycle] industry,” said Baggio. “Of course, we increased our capacity consistently in order to try to keep a reasonable lead time to our customers. So we expand capacity in infrastructure (machines) and organization (new people), and also, we put in a strong effort to balance better our capacity with OE.

“I think during this time, we had the chance to grow the company totally by investing in several things, and also revitalizing our collaborations in OE with strategic choices about that. Lead times in the last couple of years were a success factor for us compared to the other companies; that’s true. This has created a new opportunity for the company.”

On the fading past, and the brighter future

Baggio insists that any prior murmurs of Campagnolo’s pending demise were nothing but unfounded gossip. 

“Rumors are rumors, but the reality is what you see today. Even before the pandemic, the company was investing in new product. Ekar was launched in 2020 and it was planned well before. Investment in infrastructure was done years ago. The company is driven by Valentino and the Campagnolo family. There is no external investors; it’s purely a family company. The family has always trusted and believe in the business.”

Tadej Pogačar’s two Tour de France wins using Campagnolo components probably didn’t exactly hurt the brand’s image, either. Photo: JdM/PN/Cor Vos.

Looking forward, Campagnolo clearly has big aspirations, and sees a very bright future ahead. Campagnolo doesn’t seem all that interested in repeating the mistakes of Potenza, however, and appears to be taking a more surgical approach to its planned expansion that ideally won’t negatively impact how the brand is perceived.

“We want to say that whenever you choose Campagnolo — whether you’re a product manager or a consumer — you need to feel that you’ve made a distinctive choice, that you’ve elevated your riding experience, that you’ve made a different choice,” Baggio explained. “We know our competitors are very strong and very big, but we want to create something very strong in our way. We want to create a special relationship with our customer because we need to be seen as a special choice.

“When we talk about product, there are a few things that are immediately in our DNA. First, we say we apply imagination to technology. When we say that, we want to underline that, being Italian, we want products that stand out from the masses. The second is the beauty of the product. Our product needs to be beautiful to look at and beautiful to use, something that creates a distinctive choice. The third thing is the quality. Every single meeting in the company when we talk about the product, we are really stressing to the product team to keep the standard as high as possible.”

OK, so what does ‘Dream Bigger’ actually mean in terms of product?

Right, so much of that last quote was sort of marketing gobbledygook (and when I referred to Baggio’s comment during my interview as a distinct “non-answer”, he gave me a smile and a chuckle). But then how does all of this translate into physical product moving forward? Baggio may have been coy with specifics, but Campagnolo’s recent history offers up some strong possibilities.

Sitting at the top of my list is an Ekar EPS electronic gravel-specific groupset. Gravel is red-hot right now, and given how Ekar has single-handedly revitalized Campagnolo, an electronic-shifting version seems like a no-brainer. Recent patent filings suggest that Campagnolo’s next-generation electronic groupsets will be at least semi-wireless, too. Likely to be unchanged is Ekar’s 1×13 drivetrain format, which has proven so far to offer enough options to satisfy most buyers, as well as being surprisingly durable despite the nine-tooth sprocket. 

“Today, there is still demand for mechanical groupsets, especially for gravel,” Baggio said. “But I think, even for gravel, there is more frequent request for an electronic groupset. There’s no crystal ball here, but if I have to say, I don’t think mechanical will completely disappear, but when we look at the trend of the bikes, the trend of the market, the trend of the OE, where they’re moving forward, we think electronic will be a large part of the market. That’s clear.”

How long until this Ekar mechanical lever is joined by an EPS electronic one? Probably not very long at all. Photo: James Huang.

Following on from the recent release of Campagnolo’s new Levante carbon gravel wheels to accompany Ekar, some more midrange aluminum gravel wheels are sure to come sooner than later.

Speaking of EPS, Campagnolo is currently getting hammered on the electronic front by Shimano Di2 and SRAM AXS. Both of those groups offer wireless formats, arguably better ergonomics, and far more customization options than what you can currently get from Super Record EPS. The existing groupset debuted in 2019, and with Campagnolo’s 90th anniversary coming next year, the timing feels right for an all-new version.

So what might be included in a revamped Super Record EPS? A 13-speed cassette feels like a natural progression (though probably without the tiny 9T and 10T sprockets of Ekar). Wireless seems like a sure bet, and I can’t help but wonder if we might finally see a single-chainring version for the first time.

A long, long overdue smattering of remote shift buttons would also be nice, too, and a healthy dose of carbon fiber and titanium are givens as well. Maybe we’ll even see 3D-printed titanium bits? Given Campagnolo’s relatively low volumes and Super Record EPS’s position as an ultra-halo product, that doesn’t seem out of the question. 

“I can not say when we will announce new introductions officially, but it’s not too far,” Baggio hinted. “Next year will be 90 years of the company, and we hope to make a present to our audience and to our company. It’s premature to say exactly when, but it’s not so far.”

Baggio’s unambiguous statements on the company needing to expand its appeal have me envisioning the return of Chorus EPS, too. There was once a time that Campagnolo had three electronic road groupsets in its catalog, after all. But if Super Record EPS goes even more exotic — which Baggio’s comments suggest to me might be on the horizon — that leaves room for Chorus to occupy the space between Ultegra Di2 and Dura-Ace Di2, and between Red AXS and Force AXS. As with that speculative new Super Record EPS groupset, I’d expect wireless operation and 13-speed here, too.

Campagnolo introduced Chorus EPS in 2014, but there was never a 12-speed one to follow. But maybe there will be a 13-speed one? Photo: Campagnolo.

And what about mechanical? Baggio was clear that the writing was on the wall for cables and housing — at least in the long term. However, Campagnolo is the last of the big three to still offer high-end mechanical road drivetrains, and given that segment’s tendency to be rather well-heeled, it would seem silly for Campagnolo to ditch the segment completely. The same goes for rim brakes.

I’d expect maybe one last generation of mechanical road groupsets from Campagnolo, headlined by Super Record as usual, and again adopting the 13-speed format ushered in by Ekar (albeit with two chainrings instead of one). It’ll be ultra-pricey and ultra-exclusive, but that’s OK. After all, while fewer than 10% of Porsche 911 buyers go with a manual transmission, more than 70% of customers ordering the halo 911 GT3 model go that route. As it turns out, it seems the purists are often the ones who also have money. 

I’d eventually expect there to be new Record, Chorus, and Centaur mechanical groupsets, too, with Record and Chorus also adopting the 13-speed format, and Centaur getting the old 12-speed layout. If Campagnolo is serious about volume and innovation blended with that stereotypical Italian aesthetic, this seems like somewhat easy pickings. SRAM has all but abandoned mechanical road groupsets entirely, and Shimano not only recently killed Dura-Ace mechanical, but strongly implied mechanical Ultegra is on its last legs, too.

Super Record mechanical may not sell in massive numbers, but high-end mechanical groupsets have an ardent fanbase that is not only loyal, but often well-funded. Photo: Dave Everett.

One thing Baggio shot down emphatically was the possibility of some sort of neo-retro mechanical groupset offering the latest shifting and braking performance, but with a more classically-styled polished aluminum finish. 

“As a company, we want to look forward. We have to consider trends in the bike market, which is not going in this direction. We don’t want to build heritage, niche products. That’s not the way; that’s not where we want to be. We want to be a premium brand driven by innovation. The heritage story is something that is clearly identified with Campagnolo, but our future is to look forward rather than behind.”

That’s a bummer, but also entirely understandable. 

The crystal ball is still kinda fuzzy

That Campagnolo is doing exceedingly well at the moment isn’t up for debate. However, where the company takes this period of success from here is harder to predict. After all, I’ve had this conversation before with Campagnolo at the Potenza launch in 2017, and we all know now how that went. 

Granted, this isn’t the same story, and we’re looking at a rather different scenario this time around. But exactly how different the outcome will be remains to be seen.

“Campagnolo is a strong brand,” Baggio said. “We have a clear idea of where we want to go and who we want to be, and we are working hard to develop and execute the right strategy to make this happen. We want to be a choice for OE. That means we need to be able to stay in the market with the high-end, but also middle-market product. We have to work hard to try to gain market share and remain special by creating desirable products, not mass.

“To do that, we need to make some strategic choices on the commercial and product sides. I am confident that the company is really investing its effort on internal innovation to make things happen in this way. I am very confident about that.”

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