FITNESS ENTHUSIASTS IN Asia and the Middle East will be subject to a trial by fire, ice and electricity later this year as Tough Mudder expands its global footprint.
In April the active lifestyle company, which organises obstacle course-themed massparticipation events, unveiled new partnerships with the IMG agency and Indonesian market entry specialist Seroja to aid its venture outside its traditional heartlands of the US and UK.
Founded in 2010 with the launch of the Tough Mudder series of 10 to 12-mile military-style courses, company founder and chief executive Will Dean has spearheaded a careful and cautious approach to expansion that has paid dividends.
“While we think we’ve done some things right, we’re not in a position to open offices in China, Japan or Indonesia,” he tells SportBusiness Professional.
“We purposely held off on this in the early years. We’ve had something like 8,000 inbound licensing enquires about the Tough Mudder brand and worked slowly on that in order to find the right partners.
“It felt like the right time. Growth for us is not going to be based on more events in the US or UK.”
The multi-year partnership with IMG marks the first time Tough Mudder has licensed its challenges – whose signature obstacles include the likes of Electroshock Therapy, Arctic Enema and Everest – to multiple new markets globally.
On an annual basis, IMG owns, operates or commercially represents more than 800 events globally, more than 50 of which are massparticipation- focused, including triathlons and themed runs, such as the Color Run brand.
IMG’s global head of events, Sam Zussman, says that the Tough Mudder partnership addresses a “gaping hole” in the agency’s mass participation roster and positions it favourably in the industry without “reinventing the wheel”.
He tells SportBusiness Professional: “There have been different statistics on where obstacle events are on the growth and maturity curve, but it was clear there has been an explosion there and we weren’t in.
“Our worldwide reach allows for activation of a global platform, creating consistency and quality.
“We brought this to bear with other brands we liked, such as the Color Run, and decided the best idea was to find a strong existing brand and format, rather than trying to create our own, and then turbocharging it with our ability to take it to territories where it lacks infrastructure on the ground.
“We really subscribed to the notion of it being a challenge, rather than a race; that it is team and community-driven rather than time-based.”
Dean believes the Tough Mudder event concept has a “universal appeal” that can translate to an Asian and Middle Eastern marketplace that is opening up to such events.
“When you look at the metrics – the emerging middle class, rising interest in health and wellness, and gym membership rising rapidly, particularly in Asia and China – that’s exciting for us,” he says.
“We think there’s a big, big opportunity. You see it in marathon participation and the 5K space, and we reckon the same can follow for Tough Mudder.”
This year Tough Mudder and its licensees have plans for more than 120 events across 10 countries.
The IMG and Seroja partnerships follow Tough Mudder’s first licensed event – in March in Monterrey, Mexico – which attracted more than 5,000 attendees and 10 sponsors.
IMG’s Tough Mudder events are planned for China and the UAE in the fourth quarter of 2016, to be followed in 2017 and beyond with events in markets including Japan, Singapore and South Korea.
Seroja will focus on Southeast Asia, with its first event taking place in Bali, Indonesia, on October 1-2.
Regarding strategy, Dean says that the combination of a large market with a developing middle class offers an irresistible opportunity.
“We started with IMG where they felt they had the most resources on the ground and strong relationships with local governments and sponsors,” he adds. “The medium-term goal is to expand beyond China and the UAE. Seroja are looking at opportunities in the Indian market.”
IMG is currently working on its new events in China and the UAE.
Zussman adds: “We’re specifically focusing on areas that we believe tick two boxes – one, economies and societies we believe this will be attractive to and can scale in; secondly, in places we have a strong presence. We could have broadened the discussion to additional territories, but we wanted to be thoughtful in our undertaking.”
Tough Mudder is embarking on its expansion plan at a time when the mass-participation event market is booming.
Some of its biggest competitors are also making tracks in Asia. Spartan Race, a more competitively-orientated obstacle series, has staged events in Singapore and South Korea.
Meanwhile, triathlon series Ironman, backed by the financial might of a new owner, Chinese conglomerate Dalian Wanda, has scheduled two new events this year in the world’s most populous country. However, Dean believes Tough Mudder presents a different offering.
“We don’t consider Ironman to be a competitor,” he says. “There are lots of analogies between their business and ours, but it’s a very different type of event.
“With Spartan, they moved quickly, whereas we took the decision to be smart. Spartan has entered some markets, but perhaps hasn’t had the traction we’ve enjoyed as we’ve expanded internationally.”
Regarding the possibility of Tough Mudder embracing private investment like Ironman, he insists that there is no need to raise capital.
“We’re fortunate that we’re a profitable company, which is also a distinction between us and Spartan Race,” he says.
“We have a lot of things we want to get done in the next year or two and while you never say never, it’s not something we’re actively looking to do in the short term.”
Both Tough Mudder and IMG believe one of the key challenges in executing the growth plan is staging events of a consistent level that deliver the Tough Mudder experience to new consumers.
Stressing that Tough Mudder events come with a “huge operational component”, Dean says: “We essentially put on a very complicated travelling circus.
“We need to produce events in a consistent fashion as we live in the age of social media. If we put on an event in Australia that isn’t up to standard, people in the UK and Germany are going to hear about it in real time.”
Blake Ulrich, IMG’s vice-president of event operations, adds that Tough Mudder’s success has revolved around “embracing an ideal and creating a culture” for their events.
“The participants – what they go through and leave with – breed this energy that is very unique everywhere it goes,” he tells SportBusiness Professional. “They have a few core pillars which they thrive by and each of those can mean something different in other cultures. One of our main challenges in getting off the ground is making sure we understand how obstacles that can symbolise accomplishment may mean something different in North America, Europe and Asia Pacific.”
Dean also warns of the dangers posed to a “rapidly-evolving” mass-participation marketplace from various newcomers to the sector.
“A lot of smaller players have entered the market in 2011 through to 2013 that have perhaps realised that producing high-quality events isn’t as easy as they thought,” he says.
“You’re seeing a consolidation in the market, which in the long term we think is good for us, but in the short term means there are some players we have concerns about and who put on events we don’t consider to be safe.
“There are a few bad apples that could potentially harm the entire industry and I’d encourage participants to take part in the bigger, more established events that don’t try to cut costs.”
Through their licence agreements both IMG and Seroja will seek to add to Tough Mudder’s portfolio of international sponsors as they sign partners for their events in Asia and the Middle East.
As part of April’s announcement, Tough Mudder unveiled new partnerships with brands, such as Microsoft Band, Snapchat and Livestream.
In November, Tough Mudder signed its firstever global presenting sponsor, with outdoor clothing and apparel manufacturer Merrell committing to an initial two-year deal which is set to expire at the end of 2017.
In the US, Proctor & Gamble’s Old Spice has formed a logical alliance with Tough Mudder as the official men’s body wash and anti-perspirant partner of the series.
The partnership includes sponsorship of a co-branded obstacle Mud Mile 2.0 and presentation of post-event rinse stations and changing areas, plus distribution of Old Spice’s Hardest Working Collection and Old Spice hair product to participants at all US 2016 events.
Dean states that Tough Mudder will tap into IMG’s vast experience in the sponsorship sector, along with media rights, with the company actively exploring the latter.
“Tough Mudder is not a ‘sport’ in the classic sense, so we can do a bunch of great stuff with sponsors that a typical triathlon or sports team can’t,” he says.
“We can build an obstacle that allows people to experience or interact with a product, so we see huge potential in the sponsorship space.
“We are definitely becoming something which people really consider to be part of their identity.
“The fact that 5,000 people have the Tough Mudder logo tattooed on them says something about the tribal engagement we have.”
Looking to the future, Dean outlines that Tough Mudder’s outreach to runners, outdoor enthusiasts and weekend warriors extends beyond initial ambitions in Asia and the Middle East.
He adds: “It’s important to recognise from the international side that yes, we’re starting with the UAE and Asia, but we’re also looking to expand into Latin America and Africa, as well as have more events in continental Europe.
“Certainly we’re looking to Latin America and continental Europe in the medium term. “In Western Europe the bigger markets of France, Italy and Spain are particularly attractive to us, along with the Netherlands and Scandinavia.
“Further east, Russia and Poland are big markets for us. “In Latin America we’re looking at Brazil, Argentina and Chile. We would love to be in South Africa too.”
— Tough Mudder (@ToughMudder) 15 March 2016