Stakes are high for industry’s future

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26_stakeshigh_03Summit brings 160 marine leaders to Chicago to discuss growth strategies for the next decade

For a day and a half in December, an exceptional group of marine industry leaders and visionaries met at a Chicago-area hotel to discuss the future of recreational boating and debate how best to create a foundation to ensure its success for the next decade and beyond.

The Recreational Boating Stakeholder Growth Summit — hosted by the National Marine Manufacturers Association — brought together about 160 executives and leaders from every segment of the industry, including bankers, big-box retailers, dealers, distributors, manufacturers, marinas, trade groups, the trade press, insurance carriers and consumer organizations.

“It was the first time ever that we’ve assembled such a diverse group of boating stakeholders, and from the point of view of getting all those people together and getting them to agree that we need to take collective action … and to identify a number of potential action items, I think was pretty good for a day and a half,” NMMA president Thom Dammrich says of the Dec. 13-14 gathering. “I think there was a tremendous amount of energy in the room.”

Just the fact that a group of busy people left their jobs and families to travel to Chicago in the middle of December — less than two weeks before Christmas — says something about the importance of the meeting, participants say. “If this donation of time and money and energy was spent by the industry, clearly it was a well-thought-of event,” says BoatUS president Margaret Podlich.

Jim Frye, vice president of business development at Westrec Marinas and president/chairman of the Association of Marina Industries, agrees that it was a historic meeting, just in terms of the group of people assembled. “For the first time in my recollection, virtually all the marine industry stakeholders were present and encouraged to contribute their ideas and concerns,” he says. “That was a great step in the right direction and reflected in the enthusiasm of the group and their level of engagement in the exercises of the meeting.”

All agreed that bringing together the business side of boating with the consumer side is necessary to address the complex issues facing the industry. “We have to start with the consumer and work backward,” says Matt Gruhn, president of the Marine Retailers Association of the Americas. “We have to deliver on what the consumer wants and need to engage them in boating. If we can’t do that, then nothing we do is going to have the effect that we’re looking for.”

The summit was facilitated by the FCRC Consensus Center, which is based at Florida State University. The center sent an in-depth survey to participants prior to the event, and the results were used to create four vision statements for the industry to work against during the summit.

The survey results included lists of factors both enhancing and impeding the success of recreational boating. The top factors enhancing boating include better products and technology leading to better, safer boating experiences; boating is family-friendly; improved access to water; increasing professionalism and attention to the customer; and consumer education, outreach and promotion.

26_stakeshigh_01Factors deemed to hinder the success of boating included affordability and cost; political, legislative and regulatory events; weak economic factors; competing recreational activities and free time; and loss of access.

Using the full results, which also included a vision of what a successful industry ideally looks like in 2021 and key challenges ahead for the industry, the facilitators came up with four vision statements for the industry 10 years from now:

• “Unified industry cross-sector collaboration brings results — boating now the preferred recreational choice.”

• “Boat participation soars: New generation, highly diverse, family-friendly lifestyle and consumer friendly.”

• “Expanded access to water and the lifestyle has been achieved.”

• “Smarter and fewer regulations and better boating education results in safe, affordable enjoyable boating.”

On a scale of 1 to 5, with 5 being “very confident,” survey respondents rated the stakeholders’ ability and willingness to meet the industry’s challenges as 3. The facilitators made it clear that the summit was not intended as a forum to immediately solve all issues related to the growth of recreational boating. “It is designed to develop a shared commitment to collaborate for results across the industry stakeholders’ sectors,” according to the event agenda. “The result will be setting a path for sustainable recreational boating growth and achievement of a shared vision of success.”

Key challenges

Presentations on trends in recreational boating and changing U.S. demographics and how that affects the industry opened the event and, in many cases, opened the eyes of participants.

26_stakeshigh_02Steve Murdock, professor of sociology at Rice University and former director of the U.S. Census Bureau, says that in 2010, non-Hispanic whites were 63.7 percent of the U.S.’s 308.7 million residents — down from 69.1 percent in 2000. Hispanics of all races grew from 12.5 percent of the population to 16.3 percent in 2010 and represent the largest “minority” group in the country, according to Census data.

According to the 2010 Census, Murdock notes, the “non-Anglo” population in the United States is rapidly growing, making up 49.2 percent of the population 5 and younger but only 20 percent of the population 65 and older. By 2050 it’s projected that “non-Anglos” will be the majority in the country. By that time the Anglo population would outnumber the non-Anglo population only among those 55 and older.

Looking at household income, 10 percent of Anglo households were in poverty in 2009, and the median income was $54,671. In Hispanic households, 23.5 percent were in poverty and the median income was $39,923.

Podlich says the demographic information “really hit me between the eyes.” Looking around the room, she realized that in the not-too-distant future the country is not going to look like most of the people who attended the summit, who were predominantly white and male.

“It really opens your eyes to what the challenges are going forward,” Gruhn says. “If you honestly look at the statistics, if you honestly take a look at the changing demographics … it’s very clear that something needs to change. It’s a matter of getting the word out, sharing that perspective with people and giving them an opportunity by inviting them into this movement or this opportunity for change and engaging them in that.”

Podlich notes that she heard some people say the industry could translate its ads and marketing materials into Spanish and that would solve some of the problem. “It speaks volumes as to the potential for us to try and troubleshoot this from the seat we sit in now rather than going to that demographic,” she says, adding that many Hispanics were born in the United States and speak perfect English. “We need to get out of our brains and into their brains and figure out what it would take to get them into this recreation.”

Dammrich agrees that the information was dumbfounding to many in the room. “I think a lot of participants were shocked at some of the missed opportunities, industry trends and overall need for our industry to adjust to the changing population in the U.S.,” he says.

In addition to the country’s changing demographics, the need to get younger people into boating and the challenge of containing costs are high on the list of issues that must be addressed. Gruhn notes that the connection between boating as a child and owning a boat as an adult has been shown again and again. “The correlation is really high,” he says. “So the more that we can get younger people into the lifestyle and into boating, the more opportunity we’re going to have going forward.”

Podlich adds that data showing the lower median household income of the growing portion of the population needs to be addressed. “That should be a big concern for this industry and that should be our warning bell to figure out what can the future look like,” she says. “It may mean that boating looks a little bit different. It may mean that there are not as many single boat owners.”

27_stakeshigh_04Along with that, Podlich stresses the importance of removing the hassle factor from boating. The more difficult it is, especially for someone just starting out in the recreation, the more likely they are to “jump out of boating,” she says.

Frye adds that much of the information was not new to the industry, yet it seemed to resonate in a new way with those in attendance. “Everyone was in the room, so there was no one else to blame for these unresolved issues and challenges,” he says. “Those in the room seemed to view things a little differently and collectively understood that every segment has a role to play in addressing these challenges, both old and new. If we recognize that the problem is an external one, not just a product of our intra-industry bickering or competition, then it’s easier to band together and work toward a solution.

“Agreeing to work together won’t solve the problem on its own, but it gets us all moving in the right direction,” he adds.

Going forward

Although it can be easy to push aside the topics discussed at the summit in the face of everyday responsibilities, attendees stress that the meeting was just the start of what’s to come. Most who spoke with Soundings Trade Only say that a year from now they expect that several action items will be in place and that work will be ongoing to ensure goals are met.

“We’re not going to change the world in a year but, that being said, there was really great synergy in the room,” Podlich says. “It was comforting to hear other people were thinking along some of the same lines I’ve been thinking. That was the magic.”

There was a clear call, she says, to ensure the conversation doesn’t stay in Chicago. Gruhn says he has spoken with MRAA leaders, and the dealer group “is definitely on board and believes in where this can go.” There were plans to get together in the new year to continue the conversation, he says.

“I’d like to see the issues raised in this initial meeting crystallized into some actionable tasks while we reorganize a governance structure for the entire industry that can address some of those actionable items,” Frye says. “We need to do both to get things moving. The meeting was just like a net, sweeping in everyone’s ideas and opinions. We need to boil those down to a manageable number and put together an agenda of issues we can attack.

“Just as important is a rebirth of the Grow Boating board that represents all stakeholders and broadens the agenda beyond just a marketing campaign,” he adds. “The issues are broader and need a representative group in place managing a strategy to address them.”

The NMMA says the facilitators from the Consensus Center were expected to compile a report of action items and focus areas accepted by summit participants that will act as a blueprint for the industry to work against. The work was expected to take place in the six weeks following the summit.

“Whether you’re a boat manufacturer or a dealer looking for customers, you’re a yacht club or a bass angler’s society looking for members, or you sell accessories or distribute accessories, or you’re a yacht broker — it doesn’t matter what part of the industry you’re in or what part of the industry touches you, these trends are adversely affecting your organization, and the solution to each of our problems is the same solution: We need to get more people participating in boating,” Dammrich says.

“There’s a realization that we have to do something,” he adds. “If we do nothing, then we’re headed off the edge of a cliff. We’ve got to do something, and I think there was broad support for that.”

This article originally appeared in the February 2012 issue.

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