Regulator drops its signature 26-footer in favor of a ‘better’ 25 while envisioning a 40 in its future
Anytime Joan or Owen Maxwell sees a bag of Cheetos, they think about their legendary Regulator 26 center console. That’s right.
The husband and wife launched their business 25 years ago from a building that had previously housed a snack distribution company. “The first time we turned on the heat, the whole place smelled like Cheetos,” Joan Maxwell recalls.
The building had 12-foot ceilings. “Joan called it our low-overhead operation,” says Owen. “We could not even pull the plug out of the mold in there because we couldn’t raise the plug high enough to get it out. That’s how naive we were. We didn’t even know what we needed to build boats.”
They’re experts at it now. The Maxwells built their business — and their reputation — on building high-quality center consoles that deliver one of the softest rides around. Through the 2013 model year, the Edenton, N.C., company has built 3,646 boats from 21 to 34 feet. Its smallest boat comes in at 24 feet and the largest at 34 feet. Regulator has 24 production years under its belt for an average of 152 boats a year. The company pumped out 352 boats in 2005 — its peak — and its work force topped out in 2008 at 160. Today, Regulator employs 80 people and will build 127 boats for model year 2013. The company operates out of a main building that houses production facilities and offices; a second building is used for storage. Total square feet: 68,000.
“We’re not a big national company with a huge product line,” says Owen, 55, vice president of product development. “We’re a small, focused regional company with a small product line of all center consoles.”
Retiring an icon
The boat that started it all was the legendary Regulator 26 — a no-nonsense deep-vee wave-piercer that put Regulator on the chart. The company has built 1,525 26s since its introduction in 1990.
Marking their success, the Maxwells earlier this year launched the Regulator 25, which has replaced the 26. And given the 26’s popularity, the Maxwells made darn sure they armed themselves with a fistful of reasons for retiring Regulator’s first-born. “We had dealers saying, ‘The 26 is what Regulator is known for. Don’t discontinue it.’ ” says Joan, 53, the company president. “The 26 was tired. It had a step in the liner, which some customers complained about and our competitors used against us, and it was more angular, while our newer boats in the line had softer radiuses. It no longer looked like part of the family.”
Sales had been declining, too. “And we didn’t think creating a whole new model and calling it a 26 would really get potential buyers’ attention,” she says.
With Regulator’s addition of a 28 in 2011, the company needed to offer consumers reasons “to buy up and down,” says Joan. The 26 was too close in price and size, so customers would simply buy a 28.
It was more expensive to build the 26 than the other boats because of a complicated interior stringer and bulkhead grid, says Joan. Also, new product sells. They wanted to give the consumer more than just an updated 26 with a new deck. “If we were going to invest the $750,000 to $1 million in tooling, we wanted to make sure that the consumer clearly understood that this is a new model — not a revamp but new from the keel up,” she says.
Lou Codega has designed all of the Regulator models, including the new 25. “I’m very pleased with the ride and the handling of the new 25,” he says. “We did not sacrifice any sportfishing characteristics, either. As good as the 26 was, I think the new boat is better in terms of handling and seakeeping. I think in a side-by-side comparison people would choose the 25.”
Construction is simpler and takes less time. “An easier boat to build is an easier boat to build correctly,” says Codega.
The Maxwells have no problem getting it right the first time, says Peter Maryott, vice president at Oyster Harbors Marine in Osterville, Mass., Regulator’s largest dealer. “We’ve had very few warranty issues,” he says. “They have stood behind their boats even out of warranty, and they’re not afraid to support the product, to jump right on board and make the issue disappear.”
The Maxwells did just that with a 34-footer that had an occasional fuel starvation issue. “The pickup tube in the fuel tank evidently was cut wrong, and in certain instances this boat failed to pick up fuel and [the engine] would lose rpm,” says Maryott. “We had a very hard time finding this problem because it didn’t happen all the time.”
The boat’s warranty period had lapsed two years earlier, but Regulator paid the bill, says Maryott. “They want the product to be right,” he says of the Maxwells. “They want the customer to be happy; they don’t cut corners.”
And the Maxwells will fess up when they make a mistake — for example, a 30-foot express with a full cabin for model year 2008. Regulator pulled the plug in model year 2011. “We’re just not an express company,” says Owen. “At this point I am doubtful that we will ever build another express. We have focused our new-product development around the center console market.”
Modern business, historic name
The key to working together as husband and wife for a quarter century has been focus. “We each have defined roles,” says Joan. “We try not to do any piddling in the other person’s duties. And we try to keep business at work and avoid bringing it home.”
Separating work and home life takes effort since the Maxwells live and breathe Regulator. Joan, a history buff, came up with the name. The Regulators of North Carolina were colonists who wanted a more equal political process and better economic conditions that favored everyone, not just the colonial officials, says Maxwell. “We felt that people weren’t getting what they paid for in the center console market,” says Joan, remembering their first marketing strategy. “We were going to stand up and give them a better product for their money. We were rebelling to a certain extent. We were young and cocky and confident.”
That attitude helped them charge forward and take root in Edenton as a viable company that contributes to various organizations, churches and charities regularly. After 25 years, the Maxwells have no magic formulas for success. Their advice for upstart companies or those facing tough times: “Keep your vision and know you will face obstacles — and don’t give up,” says Owen. “Learn how to make lemonade out of lemons. Find a mentor.”
For the Maxwells, Grady-White president Kris Carroll filled that role. “She was helpful in giving us an understanding of how a good company should be run, with good people and a strong vision,” says Joan.
The Maxwells also leaned on a financial mentor who coached them on such topics as sell-through, effective bank presentations and inventory analysis. The recession taught them to operate leaner, to choose dealers carefully and to offer flexible rebate programs. “When everyone goes through a crisis together, they understand the value of the business and their contribution,” says Owen. “Our team is closer today than it has ever been. We don’t hear complaining; we hear thankfulness to have a job. We took for granted the sales, and now we, too, are grateful for every single one. We said we valued customers before, but we really do now.”
In the next few years, Regulator plans to step up new-product development. “We see a Regulator in the 40s in our future,” says Joan. “We are heavily budgeted for planning and product development. We realize we have a good product and a good reputation, but we have not done a good job making sure the public knows this.” That said, the company will boost its marketing and promotion efforts.
Regulators excel at being more than just fishing platforms — that’s the marketing message the company will continue to push. “We manufacture a fishing boat, but as the years have gone by, the consumers have directed us to shift to more family-style boats with more seating and creature comforts, like barbecue grills,” Joan says. “As the prices of boats go up, they become more of a tool or a platform for recreation. The whole family uses the boat, not just dad.”
The bottom line is the market demands more from a center console than a decade ago. “We’ve adapted to the market, no doubt,” says Owen. “Our boats can be used in a variety of ways.” Day cruising, water sports, diving, lounging, runs to the beach — these are all part of the boat’s duties these days.
Devout Christians, the Maxwells see it as their duty to run an ethical business and help the overall industry do well. To that extent, the industry needs to pay attention to the “ongoing issues with affordability,” says Joan. “It’s something we are all going to have to wrestle with in light of luring newcomers into boating. As an industry, you will see more of an effort to teach people about boating. The hands-on training by the NMMA at some of their boat shows is showing people that it is not that hard to get out on the water — and how much fun it can be. So the challenge is how do we make sure boating is not pushed out by [another activity] because it’s easier to do.”
The Maxwells are up for the challenge and, in true Regulator fashion, they stand ready to fight for customers.
This article originally appeared in the October 2013 issue.