As obesity becomes a weighty issue and aging baby boomers develop more aches and pains, low-impact cardio exercise equipment has become big business. That’s particularly true of elliptical cross-trainers, which are designed to provide a total body workout by mimicking the body’s running and walking motions. Elliptical cross-trainer sales grew 25 percent between 2001 and 2005, making these machines the fastest-growing segment in the wholesale fitness-equipment market.
And Brooklyn Park–based Octane Fitness may be the fastest-growing company making them.
Dennis Lee, a former linebacker for Hamline University’s football team who is Octane Fitness cofounder and president, has had ligaments repaired in each knee—which makes him the type of person that elliptical cross-trainers were designed for. “I need a low-impact product I can use every day,” Lee says. “Ellipticals are easy to use. I can achieve a desired heart-rate level without feeling like I’m working out as hard as I would be with another machine.”
The company sells its five commercial models to health clubs, sports teams, personal training facilities, and corporate fitness facilities, and sells seven consumer models to specialty retailers. While Octane Fitness is the only company dedicated solely to making elliptical cross-trainers, it competes against larger equipment manufacturers that have broader product lines. Octane’s difference: ergonomics. “We spend a lot of time making sure the machines fit people’s bodies,” Lee says.
The Octane elliptical includes features such as converging handlebars, whose motion is designed to follow the actual movements of the shoulder. A “smart stride” function automatically adjusts stride length as users change the direction or speed of their workouts, allowing for more natural movements. Octane’s ellipticals also feature low step-ups, which make it easier to get on and off.
Lee and cofounder Tim Porth started Octane Fitness in September 2001 after working together at Life Fitness, an exercise equipment manufacturer in Ramsey. Lee was Life Fitness’s vice president of sales; Porth was its senior director of cardiovascular products. Once they decided they could build a better elliptical machine than their employer, they pooled their resources and began working in Lee’s basement to improve the elliptical concept. They focused on what they knew best—sales and design—while outsourcing manufacturing and shipping. In November 2002, they sold their first four machines to Eden Prairie–based 2nd Wind.
“We put them on the back of a truck, dropped one in Coon Rapids at 3 p.m., one in Maple Grove at 5:30 p.m., and the others in St. Louis Park at 8 p.m.,” Lee recalls. “When I got in my car at 8:45 to go home, I had a voice mail from the Maple Grove sales manager, saying he had just sold our first product.”
That was just the start. Since its inception, Octane has shown annual revenue growth of between 23 and 42 percent and will approach $40 million in annual revenues this year. In January 2005, the company had 11 employees; today it has 34. Two are located at the company’s international headquarters in Rotterdam, which opened in August 2005. Named the top-selling elliptical brand in the 2006 Specialty News fitness-retailer survey, Octane also received a “Best of Fitness” award from Health magazine last year.
The company’s success attracted the attention of Connecticut private equity firm North Castle Partners, which purchased Octane in January 2005. “Day-to-day operations haven’t changed,” says Porth, who along with Lee retains a minority interest and a seat on Octane’s board. Octane’s rapid sales growth hasn’t changed, either.
