Zodiac Signs

When a Special Forces team dives out of an airplane into rough seas or slips ashore onto a hostile beach, those soldiers need equipment they can trust with their lives. And oftentimes, the boats they rely on to carry out their missions are Zodiacs.
Utilized by the United States Army, Navy, Coast Guard, Federal Bureau of Investigation and countless other military, law enforcement and lifesaving professionals worldwide, Zodiac is a brand synonymous with rugged performance in some of the worst conditions imaginable.
To many boat owners and dealers, however, Zodiacs are still the dainty little tenders that exist to serve yachts and other much more impressive vessels. They’re the little “rubber duckies” a shopper finds with the rest of the accessories at the local chandlery.
That gap between perception and reality has always been an obstacle for inflatables manufacturers looking to penetrate the U.S. market. But although most everyone seems aware of the misperception, it still exists.
However, a combination of factors now seem to be working in Zodiac’s favor as the company seeks to change that. And with Zodiac eager to expand its retail network in the United States to include more full-service boat dealers, if ever the time was right for Zodiac to convince American dealers of the virtues of inflatable boats and of their brand, it is now.
No time like the present
Probably the most important factor is that current conditions seem very favorable for inflatable boat sales. J.J. Marie, president and CEO of Zodiac of North America, says his company’s performance has been strong this year. The higher fuel prices common in Europe have reached the pump here, making large tow vehicles more costly and lighter boats more attractive. And, as water access continues to diminish in many places, inflatable boats offer features that give them an advantage there as well.
“We are [all] aware of the state of the marine industry, which is very bad, yet our RIB sales are up double digits in both units and dollars,” says Marie, who attributes the sales increases to those factors as well as the company’s efforts to expand its dealer network.
There is also the sale of the Zodiac Group’s marine segment to consider. The Carlyle Group, a global private equity firm with $56 billion under management, agreed to pay nearly $1.4 billion for Zodiac Marine earlier this year. The sale closed Sept. 27, and should provide a shot in the arm with more money for acquisitions, new development and R&D.
“One of the problems that we had with the Zodiac Group was that, while we started in the boat business, we had become an aeronautical company,” Marie says. “And when it came time to spend big bucks either in acquisitions or development or whatever, the aeronautical business took precedence. Carlyle has bought the marine business for like a billion and a half, so they see value in this. But that now means that we’re going to have a lot of money available for acquisitions and various developments. So that’s a big change. It could be a very good thing.”
Another key factor working for Zodiac, and for its dealers, is the business it does with the U.S. military and various other government agencies and organizations around the country. The company sells directly to the federal government, but dealers do the selling at the local levels.
“The federal government, the Navy, the Coast Guard, the Army, the Special Forces, have all gone to RIBs,” Marie says. “But now we’re seeing the shift occurring on the state and municipal levels. And all of that is done through dealers.”
Fire and police departments, SWAT teams, first responders, etc., all need to be equipped and, with Homeland Security money available in many cases, they have the funds to buy what they want. That often means Zodiac dealers in those communities get that business.
The company also helps dealers deepen their relationships with local agencies through the training it provides with the Zodiac Maritime Academy. Marie says the company — which has trained 60 to 70 first responder departments this year alone — will bring in trainers to the municipalities where its boats are purchased and instruct emergency personnel in their use, but will only do so if there is a Zodiac dealer in the area to host the program and provide the necessary support afterward.
The company has also ramped up its U.S. production capacity with the new 40,000 square foot manufacturing facility it opened in Summerville, S.C., the site of Scout Boats headquarters, last year. In addition, Zodiac began a manufacturing rationalization program at its French production facilities in 2004 [See “Running Lean” above], which is also paying dividends.
The Hummer strategy
And then there is the Zodiac CZ7 (Civilian Zodiac 7-meter), the flagship in a new line of Ultimate Adventure Boats — professional-grade RIBs Zodiac is developing for the recreational market. The CZ7 is a crossover version of the H-733 military RIB used by the U.S. Navy and Navy SEALs, as well as the U.S. and Canadian Coast Guards and professionals from other NATO countries.
The 23’ 9” boat — which retails for around $250,000 and comes equipped with an advanced Raymarine electronics suite, Zodiac’s military shock-mitigation system and a Forward Looking Infra-red night vision system, among other things — was first introduced in 2004 and built as part of a plan that follows the same strategy used by Hummer when it introduced its first model. The carmaker came out with the Humvee, which Marie describes as a “no-compromise military vehicle,” then followed it up with more comfortable, less expensive models.
“We decided to do just like Hummer did,” Marie says. “It’s clear we have the best 7-meter military boat in the world. It’s the choice of all the sharpest professional users. Let’s use that as our platform, but make no compromises. It costs whatever it costs.
“The idea is to then scale it down and come out with the CZ5, which will be built at [the South Carolina plant]. It’s going to look like a CZ7. We’re trying to create a new category. It’s not a Grady White, that’s the point.”
Marie says the CZ5 will be roughly 22 feet long and have a target retail price of between $60,000 to $80,000 with engine and trailer, although no dates have yet been set for production or introduction of the model.
Be different, make money
But even if the time is right, and Zodiac is well positioned to add more full-service boat retailers in the U.S. to its dealer network, why should those dealers want to join? What’s in it for them?
The answer, says Marie, is money.
Zodiac has a pro forma profit and loss statement it compiles for prospective dealers showing them where and how they can make money selling the boats, engines, trailers, rigging, F&I, accessories and all the other profit centers dealers make money in from boat sales.
“We are offering them a real profit opportunity with all the things that they do on conventional boats,” Marie says.
Maine’s Port Harbor Marine is one dealership that has taken advantage of that opportunity. The company has sold the Zodiac brand for 12 years and has made money by treating inflatables just as it would any other boat.
“Rather than just leave it in a box or put on a stand, we’ve been pretty aggressive marketing them, it’s no longer just a commodity store item,” says Rob Soucy, president of Port Harbor, which has a salesperson dedicated to Zodiac. “We’ve always looked at the inflatable business as a profit center, just like we would with anything we do. We’re really happy with the brand.”
And Zodiac is also offering dealers the chance to carve out a unique niche in their markets by selling a product that is uncommon.
“No offense, but in the sweet spot of the powerboat market, the 18 – 24 foot powerboat, there are umpteen manufacturers,” Marie says. “You take the logo off and it’s hard for the uninitiated to tell what they’re looking at. So every dealer competes with the dealer down the street with similar lines. We are offering them a truly differentiated product.”
But Zodiac must convince more dealers of that, and if it is to achieve the success in America that it has enjoyed for years in Europe – where the company is the continent’s second largest boat manufacturer – it will need dealers that can handle the larger boats it wants Americans to buy as their primary vessels. Chandleries won’t do for those.
“We’re not talking about moving boxes anymore, we’re talking about being in the boat business,” Marie says. “I haven’t gone on a map, but I would like every major market in the U.S. to have a RIB dealer. We are seeing the growth and the potential of RIBs, so we have to find dealers capable of handing that.”
Whether Zodiac is able to do that remains to be seen, but it’s clear that now is a nearly perfect time to try.