Continued innovation and the ability to evolve with a changing world are the keys to long-term prosperity in the recreational boating industry, said Brunswick Chairman and CEO Mark Schwabero in his keynote address to kick off the 30th annual METS in Amsterdam.
Speaking at the annual Tuesday morning pre-show Breakfast Briefing, Schwabero noted that changes in the way that consumers use products will require boat builders and dealers to adjust to the traditional business model.
He set the tone with a description of how Brunswick Corp. has evolved over its 172-year history to become a $4.5 billion multinational corporation, followed by a global economic update that suggests the boat industry should continue to enjoy sustained growth over the next few years.
“Innovation is providing growth to our industry, it’s something we need to keep driving,” said Schwabero. “In North America, dollar growth is outpacing unit growth, growing at an annual rate of 10 percent. That’s not pricing, that’s things that are more around content. As horsepower goes up we see more features and more technology. From a replacement standpoint, units are at about 65 percent of peak, but dollars are at 82 percent.”
Much of that growth is linked directly to ever-increasing demand for outboard power, and in particular outboards of 200 horsepower and up.
“Outboard engines are clearly leading the way, not only in North America but around the world,” said Schwabero. “Outboard engine dollar recovery is at 109 percent, it’s beyond the peak levels, and dollars are growing at almost 14 percent per year. If you look at pre-downturn and today, all horsepower categories are at or above pre-downturn level. The 200 horsepower category is now by far the largest category, and almost 20 percent of the dollar market today is 300 horsepower engines, which didn’t even exist in 2006.”
Growth is expected to continue in the coming years as boomers continue to buy boats and millennials age and reach the point in life where they have begun to enjoy more disposable income.
“When you look at millennials, what we see is that the rate at which they participate in boating is consistent with their age group in the past,” Schwabero said. “The belief that millennials aren’t boaters doesn’t agree with our data.”
But he cautioned that desire to go boating doesn’t automatically translate into new boat sales. Millennials have shown an affinity for shared use and pay-per-use business models in other sectors, and this can be expected to grow in the boating industry as well.
The last slide in Schwabero’s address – a close-up of baseball great Yogi Berra beneath his famous quote “The future ain’t what it used to be.” – left the METS audience laughing, but neatly underscored the point of Schwabero’s address.
While the future outlook for the boating industry remains positive, identifying and embracing change will be a key to prosperity, even if that means moving away from the traditional way of doing things.
METS runs through Thursday at the RAI conference center in Amsterdam, the Netherlands.