OSD 272: The state of the body armor industry
Where it's at today and what success in the future would look like.
Two weeks ago we covered the silencer industry, which is in the middle of blasting off to the moon:
This week we’ll talk about body armor, which isn’t going to the moon. At least not yet.
Imagine the John Wick universe, but instead of a parallel world of assassins living amongst us, it’s a world of people writing market research PDFs. You’ve never heard of any them, and their PDFs cost $4900 to read.
It turns out that world does exist, and someone in it wrote a study with the memorable name, “Body Armor Market (By Protection Level: Level II, Level IIA, Level III, Level IIIA, Level IV; By End-User: Defence, Law Enforcement & Security Personnel, Civilians; By Type: Vest, Helmets, Others; By Style: Covert, Overt) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2023-2032.”
We did not pay $4900 to read it, but there’s a summary. Let’s use that to back into some numbers. And if one of you did get the full PDF, you can reach us by simply replying to this email.
The global body armor market in 2022 was $2.95 billion, and the study forecast $3.12 billion for 2023.
Over ten years they forecast a compound annual growth rate of 5.84%. That compares to the silencer market which is running at around 16% CAGR (i.e. doubling every 4.5 years), or the S&P 500 which has returned an average of 10.26% annually over its lifetime. The body armor market is trailing that so far, and is on pace to double in size every 12-13 years.
Who’s buying armor? The study finds that 59% of sales are to militaries. The free preview doesn’t go into more detail on other segments, but let’s estimate that law enforcement and security professionals are another 30% of sales. That would leave 11% of sales to the last segment, private parties. The study finds North America bought 27% of body armor. Assume 22% of that is the US, multiply everything together, and you get an estimate that US private parties bought 2.42% of global body armor. That’s $75.5 million worth in 2023. To compare to silencers: we estimated 299,673 silencers sold to US private parties in 2023, which at an average price of $750 would be $224.8 million in revenue. And remember that the CAGR is 3x as high. So if everyone’s growth rate stays the same, in 2034 US civilian body armor will be at $141 million in total sales while silencers will be at $1.2 billion. If you have more accurate numbers than these estimates, we’d love to hear from you.
None of this is meant to beat up on body armor. It’s just to point out that as a civilian product, it’s still in its infancy. That’s an opportunity!
That opportunity has been playing out slowly, but there’s progress. Ten years ago, it would be unusual for a civilian buying body armor to not end up with steel plates. They’re heavily marketed, and people didn’t know better. Today the word is out that if you’re not buying ceramic or UHMWPE, there’s a good chance you’re wasting your money. See for example this Pew Pew Tactical review. Ten years ago, nobody was going into that much depth on non-steel armor.
The biggest challenge for the civilian body armor industry is the value proposition. We love guns. Everyone in the OSD crew has at least one set of fancy plates. But when we’re talking to newbies, plates are so far down the priority list of what to buy that it doesn’t even come up. You need a gun. You need ammo. You need optics. You need training. Plates are nice to have, but there are very few people for whom there’s a clear story around, “This is absolutely the next $1000 I should spend.” Silencers are at the point where they do have that clear story. The benefits are obvious, and immediately tangible. Body armor isn’t there yet.
There are two ways to solve that:
Find the segment within the civilian market for whom there is an immediate story around body armor, and relentlessly make the products better for them.
Go broader, and figure out a use case that’s compelling enough for people to click “Buy now”.
Over the past few years, a number of companies have gotten into the space. T.Rex and Ferro have done good business in armor, and more importantly have gotten the word out. Nothing focuses an industry like the merciless demands of consumers. So we might be in the early part of a virtuous cycle: consumer demand attracts companies, companies refine the products and marketing, the refinements attract more consumers, rinse and repeat. If that is indeed what’s happening, we’ll see more companies entering the armor market, more marketing dollars, and lower product prices. If we don’t see that, it’ll be a sign that armor hasn’t yet found its target. Let’s see.
This week’s links
“Shane MacGowan’s wife on the hunt for his missing Easter Rising rifle”
From a longtime reader:
OK, hands up – who’s nicked Shane MacGowan’s gun? MacGowan’s widow Victoria Mary Clarke is not happy and she wants it back now, sparking a widespread search after tweeting: “Shane’s 1916 rifle has gone missing, most likely been stolen.”
The gun is not any old gun. It’s a rifle from the 1916 Easter Rising, and was probably used in the takeover of the General Post Office (GPO) by armed groups of the Irish Volunteers and the Citizen Army, commanded by Padraig Pearse and James Connolly. It was given to MacGowan as a 60th birthday present by the singer-songwriter Glen Hansard.
New law: 72-hour waiting period in Maine
From The Reload:
Maine Governor Janet Mills (D.) elected to allow LD 2238, which requires a 72-hour waiting period for all gun sales, to become law without her signature on Monday. However, Mills vetoed a separate measure aimed at banning bump stocks. That bill would have amended the state’s ban on machine guns to include any semi-automatic firearm that has been modified “to materially increase its rate of fire.”
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Important comment from a longtime reader via email. Tldr the John Wick market research subworld is real, and it's full of bullshit data:
> While I don’t think your premise on Body armor penetration curve is in anyway invalidated by it, the market research report you cited is unfortunately complete baloney. Funny enough in the world of diligence and market research there is this massive boiler room industry in Pune, India. They basically advertise having a market report for every single tiny niche industry. They scrape generic stuff off the Internet and put somewhat believable numbers in the headlines (e.g 5-6% growth, it’s always somewhere around there because it’s hard to push back on moderate growth. If they said something outlandish like negative growth or super high growth, you had question its validity immediately).
>
> If you wanted to buy it, they would be slow roll you for a week or two while they tried to create something but it would all be junk scraping from the internet.
>
> It’s really interesting industry that came up over the last decade and is basically there for mid-level marketing guys to defend their business cases. So few people realize it’s a scam (including the people who buy the reports) and $4900 is usually right under a lot of people’s delegation of authority on spending on market data without having to go to their boss. If you think critically about it, the amount of work required to get those splits and forecasts, it would require a ton of primary research. But if the industry is only a couple hundred million dollars, how many people could you really sell $5000 reports to and make your money back?
>
> I come across it a lot. Trying to spread the word.
Administrative Results just dropped a video on body armor that was pretty cool. I don’t need it, but I want it.