Innovation is showing up across the industry in different ways. New Products, export initiatives, workforce diversity, disruptive technologies, and David V. Goliath strategies are just some Ways these leaders — our top 10 most Innovative companies — are changing the rules of the game.
1. Brunswick-Mercury and Correct Craft
Soundings Trade Only’s second annual Top 10 Most Innovative Companies awards resulted in a tie between Brunswick-Mercury and Correct Craft. The judges came up with the same final scores for the industry’s largest boat-and-engine manufacturer and one of its smartest upstarts.
Judges viewed both companies as hard-core innovators, particularly in the last year, but for different reasons. By selling its Life Fitness division, Brunswick became a marine-only company that not only invested heavily in new-product development, but also committed itself fully to the boating industry. Its acquisition of Freedom Boat Club, creation of a Business Acceleration division and opening of the Brunswick Boat Group Technology Center reflect a company that’s serious about reinventing itself in a changing marine world.
The Business Acceleration unit is an incubator for different types of businesses aimed at millennials, some with serious growth prospects. The i-Jet Lab at the University of Illinois, Nautic-On’s third-party relationships beyond Brunswick’s boat brands, and joint ventures with TechNexus all signal potential for long-term growth. The restructuring of this traditional company signals a new way of moving forward using a more tech-focused, strategic approach.
On the engine side, Mercury completed its 10-year, $1.8 billion product and infrastructure investment program this year, launching the Mercury Racing 450 and 400 Verado outboards on the heels of its largest-ever introduction of a 4-stroke outboard platform. It also expanded its propeller and die-cast facilities in Fond du Lac, Wis. Modernization also has changed Mercury’s workforce. Its investment in robotics means 49 percent of the workers on the assembly lines in Fond du Lac now are women.
Brunswick CEO David Foulkes says product development and plant modernization will continue “on the same aggressive path” at both Mercury and the Brunswick Boat Group.
With 10 acquisitions in five years — three this year alone — Correct Craft is pursuing an aggressive growth strategy. The $660 million company expects to reach $1 billion in annual sales long before its 2025 target date. Beyond growth through acquisitions, Correct Craft is also investing serious resources into innovation.
CEO Bill Yeargin understands innovation has two forms: sustainable and disruptive. Sustainable innovation refers to incremental improvements in existing technologies, often resulting in higher costs for products. Disruptive innovation is pushed on an industry by an outsider. It disrupts the status quo with new technologies, becoming the new norm.
Yeargin has invested $10 million in its new Watershed Innovation business to do just that, with notable successes in its first year. It teamed with senior engineering students at the University of Central Florida and Correct Craft’s Sea-Ark boat business to create the world’s quietest aluminum bay boat, with a specially designed hull and Torqeedo electric power. The boat placed second behind NASA’s project in a statewide innovation competition.
Watershed’s second project, Osmosis, is now standard on all 2020 Nautique models. Brought to market in a few months, the MyNautique app and Osmosis telematics were designed with dealer and consumer applications, while giving Nautique the ability to gather data in the field to monitor potential fleet-wide technical issues. The long-term plan is to license Osmosis to third-party builders outside Correct Craft.
Watershed’s Ingenity also could be a game-changer for the industry. The electric towboat, developed by a Nautique dealer in Austria, has been improved by Watershed engineers, who increased battery performance and added a sophisticated cooling system. A prototype Nautique was tested last summer with positive results. The builder is now offering the electric boat to its dealers and will eventually license the technology to other boat brands.
Watershed’s acquisition of Merritt Precision also gives it the ability to work in additive manufacturing and robotics, technologies that could be part of its boatbuilding processes.
“With advances in technology, we believe a lot of companies in our industry will be out of business in 10 years,” Yeargin says. “We don’t want to be one of them. We also want to be the clear leader in monetizing these innovations.”
2. Volvo Penta
At the 2019 Miami boat show, Volvo Penta introduced an assisted-docking system that works with the company’s IPS joystick, Dynamic Positioning System and on-board FLIR cameras to provide a bird’s-eye view of the surroundings on the Glass Cockpit helm. Assisted docking not only demonstrates the engine giant’s ability to combine different systems, but shows how it sees the future of boating as one of systems integration.
Also at Miami, Volvo Penta partnered with subsidiary Seven Marine to create an integrated outboard experience for a Tiara 38 Open that mated joystick docking, Volvo Penta Duoprops, Seven Marine outboards and Volvo Penta’s Electronic Vessel Control data platform. The goal: Give owners who want inboard torque the same experience with outboards.
The awards panel liked these accomplishments but gave Volvo Penta a higher ranking for work across multiple segments, including sustainability and workforce development.
Volvo Penta’s sustainability projects are multifaceted. Its hybrid IPS system is scheduled for commercial release in 2021. The company is also working with its home port of Gothenburg, Sweden, on hybrid solutions for ferries. It recently introduced an electric Saildrive at the Cannes show. Its new D4 and D6 engines reduce fuel consumption by up to 7 percent. Perhaps just as important, more than 1,000 employees have received training in Clean Seas initiatives.
In workforce, Volvo Penta trained more than 1,500 technicians in 2018, up 35 percent over 2017. It doubled the number of female hires in the last year. This range of initiatives shows not only technical leadership, but good corporate citizenship.
Garmin launched its first-ever GPS unit at IMTEC in 1990. The GPS 100 could be operated as a handheld, but it also had a tray that fit nicely near the helm. It also could be used for piloting small airplanes. “We thought of the 100 as a crossover product, though our main priority that first year was to just get a product to market,” says Cliff Pemble, Garmin CEO, who in 1989 became the company’s sixth employee.
Garmin International has come a long way since those startup years. It now has 13,000 employees in 60 offices around the world, including about 3,500 at its headquarters in Olathe, Kan. Last year, Garmin reported sales of $3.34 billion, with its marine business accounting for $441.6 million, up 18 percent from the previous year. This year, marine sales are expected to rise by 10 percent.
Despite its meteoric growth, Garmin’s culture of innovation is still based on the values of founders Gary Burrell and Min Kao, Pemble’s mentors. Burrell had a down-to-earth but inquisitive nature that found him working side by side with his engineers, even when Garmin had grown into a global giant. “Our founders wanted their company to be different,” Pemble says. “They never led by intimidation, but by example. They practiced something we call ‘servant leadership,’ which is placing the needs of others — employees, shareholders and clients — above themselves.” They also believed that innovation could come from inspiration and curiosity, rather than decree.
Burrell and Kao encouraged employees to experiment with their own interests. Successful product lines, such as fitness watches and other wearables, developed from these interests. Recently, Garmin’s dog tracking equipment also has become a significant contributor. “These came about because of our workers’ interests in competitive running or hunting,” Pemble says. “We just let them follow their interests, and whole product categories emerged.”
4. Goupe Beneteau
As the world’s largest boatbuilding conglomerate, Groupe Beneteau comprises 12 brands and 200 models that range from the 19-foot Merry Fisher 605 to the 105-foot Monte Carlo superyacht. The French company, with strong U.S. and European brands, will launch 34 models in the next 12 months.
Its growth has been strengthened by the recent acquisitions of Delphia and Seascape. In addition to its boat brands, the group is also growing its boat clubs in Europe, and its BandofBoats.com is a new online resource for boaters.
Beyond its global reach and product-development schedule, what impressed the judges most about Groupe Beneteau were the behind-the-scenes technical advances that could revolutionize the marketing and construction of its boats. A Prestige GT40 at LiveWorx in Boston last summer used virtual-reality software by PTC that allowed viewers to “see” through the hull with an iPad, checking out the interior and engine room without stepping on board. Clients could change hull colors and seating configurations, and even place the boat on an Italian lake.
The software also could let builders bring fewer models to boat shows by using virtual reality versions. The software, which will be adopted worldwide by the group, also allows rapid customization of different models on the production line and, later, real-time monitoring of the boats after they’ve been delivered.
“Using closed-loop engineering, you can get more information while customers are using a product,” says Mark Taber, vice president of marketing for Boston-based PTC. “Deliveries are more predictable, and if there is a mistake, the dealer might actually discover it before the customer.”
That smart and varied use of technology is at the forefront of industry innovation.
5. Malibu Boats
Anyone who has driven an inboard wake-sports boat onto a trailer can understand the relevance of the docking/trailering camera by Malibu Boats. Developed in partnership with Michigan-based Medallion Instrumentation Systems, the camera is mounted on the bow, and the skipper can see the camera’s view on the dash screen, using it to keep the boat centered with the trailer’s winch post. Of course, this reduces driver stress, but it also improves safety and lowers the risk of damaging the boat.
The docking camera is one of multiple innovations that Malibu has created to enhance the boating experience. The company also has an aft-facing camera that lets the driver keep an eye on a wakeboarder in the water, a seat that can fold out as a table, and an array of wake-shaping devices, including the Surf Band, which a rider wears like a wristwatch and can use to manipulate the wake.
Beyond technical innovations, the judges gave Malibu a high score because of its aggressive product-development schedule of four new models each year. The panel also liked its new engine facility, which has been manufacturing Monsoon M5Di and M6Di engines since June. The company’s acquisitions of Pursuit and Cobalt were also viewed as part of an innovative business model, since it gives the parent three premium brands experiencing growth.
6. Scout Boats
Scout not only catapulted its 530 LXF to the front of the center-console pack as one of the segment’s largest models, it filled the 53-footer with high-end amenities and leading-edge technology. Even at an event as large as the Miami International Boat Show, the 530 LXF and its six Mercury Verado 400 outboards stood out from the other boats on the docks.
Scout founder Steve Potts has a 32-year history of thinking big. He decided a decade ago that he would lead the center-console world, with ever-larger and more luxurious models, rather than become a me-too brand. The largest of eight LXF models, the 530 LXF is the culmination of that journey, with standard items that range from fishing equipment to a 24-inch multifunction display on the helm console, to a cockpit wine chiller. The boat is built with epoxy infusion, carbon and E-glass for strength and reduced weight. Scout constructed a separate 100,000-sq. ft. facility to build the LXF series and serve as an R&D center. Its solar-panel farm reduces its carbon footprint, and the complex has the largest spray booth in South Carolina. Scout also launched a website that specs out models with full MSRP to give the customer a better sense of pricing. To address workforce issues, Scout hired a full-time recruiter, created a careers page on its website, and developed a recruitment video. New hires are offered opportunities to continue their education.
7. Adaptive Surface Technologies
Harvard University students founded Adaptive Surface Technologies to develop an alternative to chemical biocides for industrial coatings. Four years ago, the team in Cambridge, Mass., turned its focus to the marine industry with bottom coatings that prevent barnacles, slime, mussels and other forms of biofouling. The company tests hundreds of formulations each year at a facility in Florida with a staff that largely consists of chemists.
With a multimillion-dollar grant from the U.S. Department of Energy, the team developed an environmentally friendly surface-active polymer that replaces chemicals and copper, and provides a smooth, slippery surface so fouling can’t adhere.
SLIPS Foul Protect N1x was introduced in April. The company says the coating lasts several seasons — at least as long as coatings that use chemical-based biocides.
The slick surface that SLIPS Foul Protect N1x creates also can improve fuel efficiency by 8 percent, according to the company. Using less fuel means fewer emissions, which is another plus for the environment. The team estimates that 2 percent of the world’s carbon emissions come from pleasure boats and commercial vessels.
The company also produces SLIPS SeaClear, a transparent antifouling for submerged cameras, lighting, windows and other surfaces that require a clear coating.
When a U.S. marine company has clients in Kazakhstan, it’s clearly serious about exports. Sea-Fire has sold its fire- extinguishing and suppression products in more than 50 countries, including South Africa, Estonia, Saudi Arabia and China, as well as its primary markets in Europe and the Americas. In July, the company set up a new distribution network in Colombia for that country’s navy and Coast Guard.
Sea-Fire president Ernie Ellis entered the domestic marine segment in 1978 and began looking for export opportunities 20 years later. Finding immediate success in the international market, he was awarded the Presidential E-Award for Export Excellence in 2004 when the company’s international sales shot past 60 percent of annual sales. “It has stayed above 50 percent since then,” Ellis says.
The other big trend that has defined Sea-Fire: It ceased using hydrofluorocarbon extinguishing agents (HFC227) more than a decade before HFCs will phase out in Europe. The company transitioned to a more expensive agent that doesn’t contribute to the depletion of Earth’s ozone layer. The switchover cost Sea-Fire 10 percent more, but OEM customers were attracted to the new extinguishant’s environmentally friendly composition.
Sea-Fire’s global reach and eco-responsibility are also what attracted the judges to the company.
9. Mastercraft Boat Holdings
MasterCraft Boat Holdings, best known for inboard wake-sports boats, has jumped into multiple new markets with its acquisitions of NauticStar, which builds center consoles and bay boats, and Crest pontoons. MasterCraft also launched Aviara, a new company that builds a high-end dayboat exclusively for MarineMax.
For the judging panel, the attractiveness of the acquisitions was supplemented by MasterCraft’s ability to aid the new companies with new-product development and construction. MasterCraft has worked hard to shorten its own time-to-market for new models. Instead of days or weeks, MasterCraft CEO Terry McNew says that model development is down to just eight hours for a new hull.
Implementing those design techniques, NauticStar recently introduced its first 30-plus-foot center console: the 32 XS. The company can now support boats up to 39 feet. NauticStar plans to develop three new models per year, with minimal staff additions.
Crest has also integrated MasterCraft’s Lean Six Sigma process into its facility, and increased production capacity by more than 20 percent while reducing labor hours.
Aviara, announced last year as a new brand, had new product at this year’s Miami show, including sterndrive and outboard versions of the AV32. There are plans for two more models in the next six months.
MarineMax has remained a growth company since it went public in 1998. The world’s largest boat retailer has fueled its growth with organic sales, brand expansion (from Sea Ray to its current 22 boat brands), dealership acquisitions and entering new sectors. Caribbean charter operations and building power catamarans in South Africa and Asia aren’t areas most domestic dealers would enter, but MarineMax has been successful in both. Its purchase of Fraser Yachts in July is arguably its most unusual acquisition to date, though it shows MarineMax’s resolve to lead in unfamiliar segments.
Fraser, a Monaco-based superyacht and charter broker with 20 offices around the world, seemed an unlikely target for MarineMax, the quintessential U.S. dealer. “Our biggest concern wasn’t about the company being European, but about losing its top performers,” says Chuck Cashman, MarineMax chief revenue officer. “That happens, and then it’s a different type of acquisition.”
That hasn’t happened. Cashman says the two companies “developed immediate synergies” through MarineMax clients who outgrew their boats but have turned to Fraser to buy yachts larger than 100 feet. The Fraser team also understands that the new parent is a growth company and can bring investment and stability during difficult times.
“Culturally, the fit has been amazing,” Cashman says. “They’re excited about being part of something bigger, and we’re excited about their reach into new markets. And as we continue to learn what each of us brings to the table, we’re seeing even more synergies.”
MarineMax may not be finished with entering new territories. Cashman says there are only a few segments in the marine industry where the company has no presence. “We’re not looking for companies that are broken, but want ones like Fraser that are healthy,” he says. “We plan to fill up our white space with those.”
Seattle Boat Co.
Seattle Boat Co. holds an annual off-site planning meeting with all staff, believing that collaboration and brainstorming breed innovation. Two questions that management always asks: What is the future of boating in our area? And, What do customers need most from us in the next year?
The most recent meeting produced big innovations: Speedy Dock, a system that tracks launch statistics for each customer with the goal of improving efficiency; and V-Tech Fuel, a custom, ethanol-free blend. Exclusive to its facilities on Lake Union, Lake Washington and Lake Tapps, the fuel is the direct result of customer feedback.
Recent additions to improve internal efficiencies also include TextBox, a system that reduces the number of days a boat is in for service from four to one. Stellar software also eliminates missed fuel charges and marina overbookings. Its introduction of Sales Force lets personnel generate real-time reports, as well as track and set goals for finance, insurance and sales. BambooHR software also shortened the process for incoming personnel from five days to 15 minutes.
TACO Metals continues to innovate with new products across multiple categories, working from manufacturing and distribution facilities in Miami, Summerville, S.C., and Sparta, Tenn. Brothers Jon, Michael and Bill Kushner have navigated the second-generation family business through a constantly changing marine landscape for four decades, scaling it with the times. The 60-year-old firm has expanded across a collection of product categories, either manufacturing internally or outsourcing in the United States or Asia. All TACO products are designed in-house.
The Kushners view the current period as the industry’s most competitive ever, with an overabundance of suppliers and pressure created by acquisitions of other marine equipment companies. “It’s no longer a cottage industry,” CEO Jon Kushner says. “A lot of companies, unless they’re adding value in service, quality and innovation, are being forced out. This is a time when marine equipment manufacturers need to reinvest in their businesses — now more than ever.”
TACO has remained a leader by outinnovating and outservicing larger competitors. Its design team works on a calendar-year cycle, launching about 12 new products annually in specific niches. TACO also integrates its different product lines for more complete OEM solutions.
Being small means having to be nimble. “The feedback loop with our clients happens quickly and allows for rapid innovation and expansion of our product lines,” Kushner says. “It’s about being faster to market with new products.”
At IBEX, Taylor Made showed 30 products across 10 exhibits, including a mock center console, sportboat and pontoon to demonstrate how new products look on a boat. The exhibits showed both the breadth of the Lippert subsidiary and its commitment to product development.
On the pontoon, Taylor Made’s motorized Custom Power Lounger demonstrated automotive-style engineering, with forward and backward movement, as well as reclining into a lounge position. Its Fusion Series Bimini top was designed for easy attachment, with quick-release top mounts and a bottom-mounting button, instead of pull pins, lanyards or bolts.
The sportboat display included a fully enclosed windshield with Taylor Made’s STS forward sliding panel system. Its large power sliding window dropped out of sight into the lower deck, opening up the cockpit.
Other new products, such as custom-fabricated pontoon fence railings, TrueColor fenders and the AquaFi 4G Mobile Hotspot, show how the company retains its leadership position through constant innovation in established product categories.
This article originally appeared in the November 2019 issue.