The marine industry is extremely fragmented. Despite consolidation in the aftermarket, and in the parts and accessories segment, hundreds of companies still operate in vastly different ways. Many are mom-and-pop companies, though there is a growing presence of public companies as some acquire distributors and parts manufacturers. Each has a different approach to business, but all are navigating new and drastically changing retail trends.We spoke with three parts and accessories manufacturers to discuss how each has adapted their businesses through the years.
Plugging the Holes
Edwin Kehrt didn’t set out to introduce today’s sealants to the marine industry. As a captain serving in the U.S. Army Corps of Engineers during World War II, he and his troops ran a floating power plant in Manila, Philippines. But stumbling upon a lagoon loaded with abandoned Japanese kamikaze boats changed the course of his life.
Kehrt asked the Army for supplies to repair the vessels and was introduced to polysulfide, a material the U.S. military was using to repair bullet holes in aircraft fuel tanks. The technology was approved for public use in the early 1960s — about the same time Kehrt bought his first boat and learned that the sealants being used were brittle and shrank after drying.
“My father is the one who introduced sealants into the marine industry as we know them today,” says Grace Schmidt, Kehrt’s daughter and president of BoatLife, the company her father started in the 1950s, which operates under the parent company Life Industries Corp. (AeroLife and RV by Life focus on the aviation and RV industries.)
“My father was a very, very creative guy,” Schmidt says. “Some of his ideas were real standouts. For example, we developed a silicone sealant that didn’t smell. Most have curing systems that smell like vinegar, and it’s corrosive, so he developed ‘de-skunked’ silicone.”
To tout the new product, he brought a live skunk to the IMTEC trade show in Chicago. In the front of a big sealant cartridge they used in their show booth was a window with the international symbol for “no.” Kehrt placed the skunk in the window. (The skunk had come from WGN-TV in Chicago; the station would trot him out when reviewers found a film particularly horrible.)
“He would come up with some crazy ideas, but they always worked,” Schmidt says. “They got attention. We were allowed to take the skunk out and walk around with him at the show. A lot of old-timers in the industry actually still remember that skunk.”
Schmidt became company president in 1989, right before her father retired in 1990, and moved the company from Hicksville, N.Y., to Charleston, S.C., in 1995. The industry has changed significantly in three decades she has led the company, which has adapted with the times. For instance, the manufacturing side of the industry has far more women than it did when she took the helm.
“It’s funny, it’s never really bothered me. I’ve kind of just done my job,” Schmidt says. “My father was one of these people that didn’t believe in showing favoritism. Just the opposite. If somebody had to do a job to B, I had to do it to A or A-plus. What would be funny is, we’d go to a trade show, and I’d be in the booth with a salesman. People would have questions, and they would immediately go to the guy. Even if we were standing together, they would address their questions to the male in the group rather than me, even though I was the specialist. I have seen that change over the years.”
With its sealant expertise, BoatLife began to cater to the cruise ship industry in the 1990s. It was a steady revenue stream while it lasted. “Over time, the teak decks on cruise ships disappeared, so we don’t do much with them anymore,” Schmidt says. “We did all the Fantasy-class Carnival cruise ships.”
When that business dried up, Life Industries branched out into aviation and RV. It also began doing small-batch contract manufacturing for start-up companies that had outgrown their garages but weren’t yet ready for a manufacturing facility. Those products vary from pierced-earring cleaner to reptile repellent, and require varying levels of involvement. For some companies, Life Industries merely packages products; for others, it mixes chemicals and blends formulas.
The company has been getting larger runs, but Schmidt prefers small orders. “Anyone can get 100,000 containers, but the startup guys are the ones who need help,” she says. “They need 5,000 of something, and they don’t have anyone to do it for them. Some of them have become pretty big companies; they’ve gotten to a sufficient size and gotten their own manufacturing facilities. It’s a point of pride for us. It’s nice to see these guys grow, but it’s sad to see them leave.”
Even as Life Industries adapts by dipping its toe into new industries, marine is what keeps the lights on, Schmidt says. And the “Made in America” company is committed to providing personalized service in an automated era. “We have customers we’ve been with for generations,” Schmidt says. “Some of our representatives have been with us a generation. So we’ve got a long reputation in the marine industry.”
About eight years ago, Navico executives noticed something amiss in the handling of various and changing distribution points. It happened around the time the industry was seeing consolidation among distributors, as well as parts and accessories manufacturers, as companies such as Brunswick Corp., Patrick Industries and Lippert Industries began buying smaller companies. During the recession, giants like Brunswick began shedding boat brands, and they looked toward parts and accessories to offset the cyclical downward trends in new-boat sales. (When people stop buying new boats, they often continue using their old ones, and unemployment tends to be good for boating and fishing time.)
That consolidation meant companies like Navico had to reimagine how they approached distribution points, says Gordon Sprouse, marketing director at Navico America. In the case of the merger between Bass Pro Shops and Cabela’s, retail teams were combined, Sprouse says. Ultimately, the mergers and acquisitions changed the way Navico divvied up its clients.
Navico didn’t just look at geography in how it services customers; instead, it categorized types of customers — custom boatbuilder, volume boatbuilder, small dealership — rather than geographic location. “I think having a cluster-based approach rather than a geography-based approach, particularly in some of those merger situations with wholesale distributors or manufacturers, can be beneficial because those salespeople are specifically trained in how to deal with those customers’ needs,” Sprouse says.
A volume boatbuilder has a much different timeline for product information than a local dealer, Sprouse says, adding that mergers have less of an impact on volume builders because they’re not geographically based.
After about a year of focusing sales teams on a cluster basis, Navico began to implement a hybrid model. “We now have a hybrid with some territory-based salespeople and some cluster-based salespeople,” he says. “We still needed territory-type managers for local retail, but for large retail, we needed more of a cluster-based focus.”
Navico products, from Lowrance to Simrad, are sold through distributors and direct from the manufacturer. The company has been selling accessories directly to consumers for at least 15 years but expanded that to include all of its products a couple of years ago, Schmidt says. Products across all of its brands have been indirectly available on Amazon for some time, and now Navico is beginning to sell some products directly to the e-commerce giant.
“Our view is, we’re giving customers options of what they want to do,” Sprouse says. “They can buy direct from Lowrance or Navico or Simrad, or they can click on a dealer locator and find a dealer in their area, or they can buy from Amazon. We’re giving customers that option. What we’ve seen is, which is somewhat what we expected, customers in the electronics world, a lot of them want to see and feel and touch. It’s a high-dollar item.”
Navico doesn’t have any immediate plans to consolidate further, but it does strive to collaborate with as many technologies as possible, Sprouse says. For example, Lowrance works with shallow-water anchor manufacturer Power-Pole to make the angler experience “more holistic.” Lowrance also partnered with Abu Garcia and Anglr to introduce a connected rod that will track fishing information such as waypoints, water temperature, tide, weather and time.
The company collaborates on mapping solutions, as well. “We try to provide an open network in which we can have more maps compatible with our displays,” Sprouse says. “We have a third-party tool kit that allows entrepreneurs developing maps for specific regions to make those maps compatible with our displays, to provide a unique underwater view to fishing structures in saltwater environments.”
Lowrance is compatible with Navionics, a brand owned by Navico competitor Garmin, Sprouse says. A new partnership with Ranger Boats, called Ranger RIDE (Ranger intelligent display engine), basically put a glass-dash, digital-switching system into Ranger’s boats last year.
“It’s a completely connected system to everything in a boat,” Sprouse says. “There is definitely a push toward that integrated solution, but we’re certainly not there to where the car industry is yet because with boat usages, there is such a variety of options. Everybody is using their boat for different applications, so creating an automated, integrated system that works across the board hasn’t yet happened.”
Founded by Immigrants
The father-son team that runs Florida-based AirWave Marine is proud that the company’s antennas are developed and manufactured in America, and that immigrants founded the company. “AirWave is a company founded by immigrants and owned by citizens,” says systems engineer Raul G. Pla, who co-founded AirWave with his father, Raul J. Pla. “We’re American but from Cuban descent. We like to tout that every once in a while.”
AirWave engineers and manufactures all of its marine antennas, connectors and mounts in Doral, Fla. It is part of Antenna World, which for nearly 35 years has been manufacturing marine, military and recreational communications equipment. Antenna World partnered with distributor Haimes Coleman to introduce an antenna engineered for cellular and Wi-Fi. Around five years ago, AirWave was formed under the Antenna World umbrella to focus on the marine market.
“Marine has always been in the background for us,” Pla says. “We’ve been boaters our whole lives, and we know antennas. We always made marine antennas in really small quantities and sold them to marine shops direct, but nothing really serious until we formed AirWave.”
The company has a different way of looking at the marine market, Pla says. “We design antennas from scratch. They are high tech, and we considered marine to be low tech. We continued to add to our line with the end user in mind while still making it affordable. We’re also making it easier for installers to replace antennas because they don’t have to rerun the cables to replace them.”
Pla has been frustrated with the slow pace of change in the marine industry, particularly compared to other industries Antenna World knows, and because technology moves so quickly. “It just seems like it’s one of those markets that is just ripe for a big change, especially the antenna market within the marine industry,” Pla says. “The big guys just haven’t done anything new for a really long time. I think that’s why we’ve gotten such a good response. Everyone’s been fine with the status quo for a long time. The cellular and Wi-Fi world are changing every year, and when things are changing that fast, deals get done a lot faster. You know where you stand a lot quicker.”
The slower pace of marine can make it challenging to attract investors, he adds. “We think that AirWave Marine is still in its infancy, and there’s still room for a lot of growth in this market,” he says. “When any market is dominated by one big guy, that means there’s an opportunity to go after some of that. It just takes the right person with the right capital and direction and ability to really wait it out — that’s the biggest thing — and most investors want to see a quick return on their investment. Because of the contracts and buying cycles, it’s going to take an investor three or four years to see that return on investment. That’s been the hardest part of the conversation when we talk to angel investors.”
The acquisitive nature of the marine aftermarket segment has largely worked for the company, since clients tend to place larger orders as they grow. Pla also says AirWave is more nimble than larger entities. “As a small company, I feel like I can move a lot quicker than my competitors. I’m able to change things on the fly a lot more,” Pla says. “The big guys are so entrenched. You can see it at trade shows. The demographics are so skewed toward an older generation.”
Marine antennas are not a large driver for distributors because they’re not a huge profit center, Pla says. “It’s commoditized, and that’s where we’re able to come in and push a higher price,” he says. “If everyone’s been making 20 percent on antennas for the last 30 years, we’re coming with new features, and now we’re getting 35 to 40 percent.”
AirWave maintains quality by focusing on front-end research and development, and back-end service. “Everything is American made — splitters, the cables we do, custom configurations. It’s really been the driving force behind our brand,” Pla says. “A lot of times, people will call with questions or for help, and they’ll get me or my father, the engineer. They’ll say, ‘Oh my gosh, you’re the guy who designed this.’ It’s a really big perk.”
This article originally appeared in the April 2020 issue.