As the industry continues its recovery in 2014, it’s clear that a spirit of innovation has taken hold for many companies.
The Movers & Shakers awards are all about recognizing those innovators, those companies and leaders that have embraced change and adapted to today’s radically different boating industry.
In 2014, the fourth year of the program, we received our largest and strongest group of nominees yet. That strength is reflected in the quality of the 13 people we have profiled on the following pages.
Even though many of these individuals have decades of experience in the industry, this is no career achievement award. It’s not about what happened 20 years ago or even a decade ago. It’s about how these leaders are impacting the industry today.
Whether it’s product innovation, campaigns to grow the boating audience or creative marketing solutions, the 2014 Movers & Shakers are undeniably shaping the boating industry for today and the future.
In this issue, we recognize our 2014 Mover & Shaker of the Year – Jim Lane & Buck Pegg of Chaparral and Robalo – along with 11 more innovators.
Mover & Shaker(s) of the year
Jim Lane, President, and Buck Pegg, Founder
Chaparral and Robalo Boats
There may not be a better example of the spirit of this year’s Movers & Shakers than Jim Lane and Buck Pegg.
With nearly 90 years of boating industry experience between them, no one would be surprised if they decided to take it easy and let others set the standard. Instead, both of the long-time partners are still heavily involved in the operations of Chaparral and Robalo, leading the company as it launches new products and invests in its workforce and dealer network.
What makes the nearly 40-year partnership work – Pegg started Chaparral in 1965 and Lane became his partner in 1978 – is that each has their responsibilities and trusts the other to get the job done right, they say.
“We have such diverse interests. Buck really enjoys the manufacturing side and I enjoy the business side,” Lane said. “The relationship that we set up in the very beginning hasn’t really changed a great deal. We meet on everything, we make decisions together.”
When the recession hit, those decisions were especially difficult as the company made the necessary cuts to survive. Being the major employer in Nashville, Georgia only made the process more painful.
With many families having both parents and multiple generations working at the factory, the management team tried to take all those nuances into consideration.
“We had to surgically go through and look at all the people and how it would affect their families,” Pegg said. “We had to lay off some people or we couldn’t have survived this thing … but we wanted to make sure we didn’t do it to a complete family.”
In the worst days of the downturn, the company kept more employees than it needed, but that helped to position Chaparral and Robalo to hit the ground running as the market recovered.
“We can’t say enough about how much the employees have helped us grow the business,” Lane said. “There’s a pride in the company and the town, and our employees work together to help us build the highest quality product.”
Recognizing the importance of a strong dealer network, the company also spent millions supporting its dealers during the recession to help them move product through the pipeline and stay financially stable. When dealers did go out of business, that allowed Chaparral to better control the product, distributing it to other dealers rather than having it end up at auction.
It was an investment of more than $18 million that helped keep the dealers healthy – and ready to buy more boats – coming out of the recession.
Heavy investment in research and development has also paid off with a wave of new products from Chaparral and Robalo over the last few years.
The products reflect Pegg’s long history of delivering the right boats to the market, Lane said.
“Buck has a unique knack for knowing what the customer wants,” he said.
In 2012, Chaparral jumped into the entry-level market with its H2O line. With the sterndrive market struggling, the company was looking for a way to gain market share and bring more buyers into boating. The tough part, Pegg said, was to maintain the “Chaparral DNA,” with a high-end boat at a low price point.
“Our dealers had been asking for a line of boats like that, because they were missing a lot of business out there in entry-level boats,” Pegg said.
Beyond being a less expensive boat, the H2O was marketed with a national price to make the boat-buying process more transparent to newcomers.
“The marketing strategy was developed to make that boat available for a nationally advertised price that the dealer and the customer could feel comfortable with,” Lane said. “We worked with our dealers to come up with that pricing strategy and we backed it up with a very good advertising program.”
To make the numbers work required both Chaparral and its dealers to reduce margins, but the product has accomplished the company’s goal of capturing more of the entry-level market. Sixty percent of H2O buyers are first-time boat owners, and Chaparral has gone from 0.55 percent market share in the 18- to 19-foot segment to 14 percent since 2011. For the 18- to 35-foot segment, Chaparral’s share has grown from 7.6 percent to 13.9 percent.
The company has sold more than 3,000 boats in the H2O line and increased its sales of sterndrive boats even as the overall market declined. The line now includes six boats in 18-, 19- and 21-foot configurations.
Chaparral has also jumped into the jet boat market with its new Vortex, introduced this year. For the 2015 model year, the company will offer six models at 20, 22 and 24 feet.
Jet boats were a segment the company wanted to enter for years, so it jumped on the opportunity when BRP folded its Sea-Doo line and decided to license the Rotax engine technology. With excess capacity and labor, adding new lines makes plenty of sense for the company.
“We felt like it was a different customer and a way we could expand what we were doing,” Pegg said.
Like with the H2O line, the company is emphasizing the Chaparral brand, saying the Vortex isn’t a jet boat, but a Chaparral with jet power.
“We looked at it as a power source, not a jet boat,” Pegg said. “It’s the same DNA as the rest of Chaparral. The only difference is that it’s powered with a jet engine.”
The latest innovation will be a line of outboard-powered deck boats for 2015, which Chaparral introduced to its dealers in September.
For the Robalo brand – which the company has owned since the early 2000s – it has been equally aggressive, launching several new models and a “Reel Deal” pricing strategy similar to that of the H2O. The fishing line has been a strong performer for the company, with sales up more than 60 percent in 2014 and 450 percent since 2011. For the 2015 model year, Robalo is rolling out a series of Cayman bay boats.
At the same time it has expanded into new markets, Pegg and Lane are quick to point out that Chaparral has continued to invest in its traditional market of bowriders and cruisers.
The 327 SSX, a large open bow day boat with a full-beam cabin, was introduced in 2011 and won an NMMA Innovation Award. The company followed that up with a 257, 277 and 307. The SSX line has sold more than 650 units since its introduction. The SSi and Sunesta lines were also redesigned and retooled in 2014.
“We believe we’re going to see a resurgence in the market as the new product our engine manufacturers are making comes out,” Lane said. “Volvo and Mercury over the next couple of years will have a lot of exciting new product that will offer a lot of features and benefits to the customer.”
Movers & Shakers Finalists
William H. McGill Jr., president, CEO and chairman of the board
The biggest mistake so many people in the industry make about boating, says Bill McGill, is thinking it’s about the boat, when it’s about the boaters and their lives.
“I’ve been in the business for 41 years and the thing I’ve realized over my career is that boating changes people’s lives,” McGill said. “That’s what gets me up at 4:30 in the morning, keeps me motivated, keeps my team motivated. We are making a difference in people’s lives.”
With that in mind, in 2012, McGill drove an initiative to focus on the “Why” of boating and the boating lifestyle rather than the price of a boat purchase. With this shift of focus came many fundamental changes.
Instead of focusing on competing with other dealers, MarineMax chose to instead look at the other activities and hobbies people do instead of boating. As part of that initiative, MarineMax focused its marketing efforts around four lifestyle areas: yachting, fishing, leisure and watersports, with the tagline “United by Water.”
That focus reflects the feedback McGill hears from the customers about the impact boating has on their lives, from parents appreciating more family time to friends enjoying time together.
“I hear that over and over again,” McGill said. “We’re doing something that unites people. That’s the driver of most everything we do.”
The lifestyle emphasis was the primary focus of the all-new MarineMax.com website and digital marketing strategy that launched in April 2013, with sections on each of the four. That carries over to social media, with Facebook pages for each of the lifestyles, along with one for each of the company’s locations.
Since launching the new MarineMax.com, the site has seen a 27 percent increase in unique visits, a 24 percent increase in page views and 44 percent more total leads received from the site.
McGill understands the challenges facing the marine industry as well as anybody. With 55 stores (down from 93 pre-recession) across the country, MarineMax felt the impact of the recession throughout its network.
The good news, McGill said, is that of the 50 stores that remain from those 93, they accounted for more than $1 billion of the $1.3 billion the company had in sales in 2006.
“If we never make another acquisition, we can be back at $1 billion,” McGill said. “That said, we’re in discussions as we speak with dealers and marinas. It will happen when it makes sense to grow the company.”
In the publicly traded company’s most recent earnings release, MarineMax reported a 22 percent increase in revenue to $214 million for the quarter ending June 30, 2014, one of the company’s best quarters since the recession ended.
“It is great to see the 22 percent growth that our team created in the most meaningful quarter of the year,” McGill said. “Our 22 percent same-store sales growth was on top of 16 percent growth last year and is evidence of continuing industry recovery.”
There will continue to be challenges, especially in the sterndrive segment, but McGill expects the recovery to continue. Price and a dearth of new product continue to hinder sales.
“There’s been a lack of innovation,” he said. “When business slowed down the manufacturers stopped investing in new product. The customers are still there – they’ve just been waiting for something new and exciting.”
McGill is also concerned about the affordability of boating, calling price the biggest challenge. He’s been urging his manufacturer partners not to “overcontent” the boats and keep in mind that there is a place for simplicity.
“We all need to remember that a lot of people grew up with 14- or 16-foot boats with a 40 horsepower on the back and had the times of their lives,” he said. “We’ve challenged our manufacturers, when you come out with a new model, it can’t be more and if you can, let’s get it down.”
Despite those challenges, McGill believes the call of the boating lifestyle will keep people interested in boating, especially as the economy improves.
“As consumer confidence gets up near that 100 mark, it’s going to take off like a rocket ship,” he said. “The manufacturers have to give us the right product at the right price and
we’ll all win.”
Frank Peterson, President
Recreational Boating & Fishing Foundation
Hispanics represent the fastest-growing segment of the U.S. population and now number 53 million in the United States.
They represent 17 percent of the U.S. population and more than a quarter of those five and younger. Those numbers are much larger in several major markets such as Chicago, Miami and New York.
They are a key demographic for any business, and companies such as Ford and Disney spend millions of dollars every year trying to reach them. But the boating industry has been slow to pursue the market.
According to 2012 data from the National Marine Manufacturers Association, Hispanics represent only 8.4 percent of boating participants and only 7.7 percent of boat owners.
The Recreational Boating & Fishing Foundation, under the direction of president Frank Peterson, is one of the groups trying to do something about that. RBFF is working with several industry stakeholders and Lopez Negrete, the largest Hispanic-owned communications firm, to reach out to the Hispanic community.
In late March, RBFF launched VamosAPescar.org, a website aimed specifically at the Hispanic market, available in Spanish and English. It includes information on how to fish, getting licensed, debunking myths and more.
Through the end of July, the site had recorded nearly 150,000 total visits, with traffic increasing each month. The most popular segments have been those that focus on how to fish — by a 10 to 1 margin compared to the information on where to fish. On TakeMeFishing.org, the numbers for those sections are roughly equal, Peterson said.
“It’s reinforcing that knowledge of fishing and boating is pretty elementary at this point,” he said. “Everybody who wants to engage this audience is going to need to understand they’re going to need to provide more information and education to this audience.”
Working with local governmental agencies, RBFF also ran 15 events in Florida and Texas this year. The idea behind those was to provide Hispanics experience with fishing activities, as the research shows awareness of fishing is low amongst that population.
On a national basis, RBFF and its partners will be using social media, search engine marketing, radio and more to put the boating and fishing lifestyle in front of potential participants.
Discover Boating and RBFF also recently partnered on a new video, the fourth in its “Story of Discovery” series. It introduces the Vazquez family, a Hispanic family that shares its story of how boating allowed them to spend more time together. The video is available in both English and Spanish.
That message of family — an important one with every group — resonates even more with the Hispanic audience, Peterson said.
“That idea of ‘togethering’ is so important,” he said. “We have to sell that emotional connection even more to the Hispanic audience than we ever have to the general population.”
Based on their research so far, RBFF and Lopez Negrete have identified three target groups, representing more than 14 million Hispanic adults, a number that more than doubles when children are included.
• Fishing Fanatics (5.1 million) — Avid anglers who fish every chance they get, but have not necessarily embraced boating.
• Social Anglers (3.3 million) — Recreation-minded singles and couples that fish on occasion, but mostly engage in other outdoor activities.
• Happy Hikers (5.9 million) — Family-oriented nature lovers that plan activities around family time together, but rarely fish.
RBFF is now engaged in more research, including conducting mystery shopping campaigns in boating and fishing retailers to see how Hispanics are treated in a retail setting. Another large research project will help the foundation better understand the path to purchase and the barriers for Hispanics, especially when it comes to boating. RBFF plans to announce those results at the Miami International Boat Show in February.
As a nonprofit, much of RBFF’s plans for the campaign depend on funding, but the plan is to expand in-person events to more states next year, including California, New York and Illinois. The foundation will continue to grow the website as well, adding more video and other content.
“We cannot do this alone,” Peterson said. “Every facet of both the fishing and boating industries needs to come along with this. It does no good if we are building all this awareness if we’re not all in this together.”
Alain Villemure, vice president and general manager Marine Propulsion Systems Divisions
As one of the oldest brands in the marine industry, Evinrude has weathered World Wars, the Great Depression, recessions, bankruptcies and more.
Those challenges (especially the 2001 OMC bankruptcy) left the brand bruised, but Evinrude is now positioned better than ever to take advantage of today’s market, said Alain Villemure, who has led BRP’s marine propulsion systems division for the last two years.
“Starting with the bankruptcy, we had quite a challenge with quality issues at the time and a brand that suffered in terms of perception because of that,” he said.
The company also lost much of its business with boat builders during the transition. A key goal for Villemure – and one that is still ongoing – was building on Evinrude’s successful repower segment with more package business.
Villemure, a longtime BRP employee now on his second stint with Evinrude, believes the company’s blend of product innovation and customer focus will lead to long-term success.
“Coming back as the GM, one thing that strikes me from a market perspective is the consumer delivery,” he said. “You have the boat builder, you have the control manufacturer, you have the engine manufacturer, but who owns the consumer experience?”
Customer at the center
Evinrude’s G2 engines are the embodiment of that customer-first attitude, from superior technology to top-notch warranties to customizable finishes, Villemure said.
It represents the next generation of Evinrude’s E-TEC, introduced in 2003, and produces up to 75 percent fewer total regulated emissions, with 15 percent better fuel efficiency and 20 percent more torque than leading four-stroke engines, based on internal BRP testing. The engines have a 5-year engine warranty, 5-year corrosion warranty, and 500 hours with no dealer-scheduled maintenance. The engines also have a new exoskeleton designed to give the product a unique look reminiscent of superhero armor.
BRP has called it a “new era” in outboards.
“We have unrivaled performance, torque, fuel economy, and you have to talk about the design elements, the distinct look of the product,” Villemure said. “It’s a sea of sameness out there, so we came up with something that is drastically different.”
The company has also partnered with several boat builders to create “hero” colors that match elements of their boats.
“Think about it … you buy a boat for $50,000 to $200,000 and the engine doesn’t match the boat,” Villemure said. “These are paradigms that are so entrenched in the marine industry. It suits production needs and simplifies the supply chain, so the consumer doesn’t get what they should.”
Among some of the other changes are an improved piston/cylinder design, a Dual Axis clean rigging system, an i-Trim automatic trimming system, and a hydrodynamic SLX gear case that reduces steering effort and integrated Dynamic Power Steering.
The G2 is available in 200 to 300 HP, using the company’s traditional two-stroke technology. BRP’s experience building everything from jet engines to snowmobiles allows them to pick the best engine solution for every application – and for outboards that’s two-stroke, Villemure said.
“When you look at outboard engines, the application is all about torque,” he said. “G2 delivers 20 percent more torque than the best four-stroke engine in the market. That’s 600 lbs. of torque and this is simply something that cannot be achieved with four-stroke technology at this point.”
The company also recently invested millions to consolidate its engine operations – including the Rotax jet engine – in one facility in Sturtevant, Wisconsin. By putting product development, manufacturing, marketing and customer service under one roof, those departments will be able to integrate better and become more efficient, Villemure said.
BRP has also been among the industry leaders in testing alternative fuels such as isobutanol. The company was recognized this year with a Wisconsin Business Friend of the Environment Award for its efforts.