Vendors optimistic as Minneapolis Boat Show opens

As the Minneapolis Boat Show opens Thursday, the boating industry is hoping to put the slog of recession in its wake.

The years from 2008 to 2010 were painful for nearly everyone in the industry. Sales of some types of fiberglass boats were down nearly 75 percent, according to Info-Link market research. And certain product segments have yet to come back, said Rob Parmentier, president and CEO of Larson Boat Group in Little Falls, Minn.

"Fiberglass inboard/outboards, cruisers from 26 to 36 feet and yachts 50 feet and above have seen little or no improvement since 2007," he said.

Minnesota is the nation's boating leader, with the highest number of registered watercraft per capita. But boating registration and participation is flat, according to the Minnesota Department of Natural Resources.

In 2013, Minnesota had 809,138 boat registrations, down from 817,996 in 2012 but up from 808,783 in 2011.

"Boating registrations are like the economy," Parmentier said. "It's up for a few months and down for a few months."

Still, positive signs can be found in the business. Pontoons, fiberglass and aluminum fishing boats and ski/tow boats are doing well. Sales are up 10 percent year over year in those categories, according to Info-Link.

And Darren Envall, show manager of the Minneapolis Boat Show, expects about 42,000 attendees at this year's show, a 3 to 5 percent increase. That's on top of the past three years, which saw increases of 3 to 6 percent.

"We have 210 vendors this year compared to about 170 in 2009 and 2010," he said. The amount of space the show takes up has returned to four domes at the Minneapolis Convention Center, compared with the downsized three domes during the recession.

Still, the industry continues to hit rough patches, even with an economic recovery. Its aging base of customers, baby boomers, aren't being sufficiently replaced by millennials and Gen-Xers. "The boating industry is finding ways to reach out to the next generation," Envall said.

Lower price points

Attracting younger buyers is an industry challenge, said Lori Kneeland, spokeswoman for boat manufacturer Crestliner, based in Otsego, Minn. "We're competing by making a boat that's easy to tow, easy to get in and out of the water and fit in the garage," she said.

A specialist in aluminum boats, Crestliner offers entry level fishing packages with boat, motor and trailer that start under $10,000 to appeal to younger buyers.

"Aluminum fishing boat companies have done better than fiberglass," Kneeland said.

But in addition to capturing a younger demographic, the company needed to enhance its brand awareness. One important market it added was in the South, where bass boats are big business. The company moved about 25 percent of its manufacturing to Lebanon, Mo., but expanded marketing efforts in countries such as Australia, Russia and France, which are all strong markets for fishing boats.

The company also discovered that it needed to demonstrate versatility to buyers who didn't see any reason to trade up. That meant creating a boat that can be used for fishing just as easily as towing water skiers.

Enter Crestliner's new model called Vision. Normally, boat buyers customize at the dealership as the point of purchase, but the Vision ($13,095 and up) can be customized after purchase to transform it from a fishing boat to a ski boat. The buyer can add a windshield, a second console, more jump seats or rod storage. "Until now, you haven't seen much of that in the aluminum industry," Kneeland said.

Moving into online sales

On the retail side, John Wooden's boating business, River Valley Power & Sports, has found success by going beyond his three retail locations in Red Wing, Rochester and Minnetonka. "I don't wait for customers to come into my bricks and mortar," he said. "I've embraced Internet advertising. We sell a lot of boats to customers who never even enter our stores."

The result: Revenue has tripled in less than five years, he said.

But Wooden's choices for inventory also help. With an assortment ranging from power sport boats to pontoons, he sells entry-level watercraft for less than $20,000 as well as the more common sweet spot of $30,000 to $40,000. Five years ago, he jumped onto the pontoon bandwagon at a time when few dealers were. Pontoons now represent about one in five boat registrations compared with one in 12 in 2006, according to Info-Link. He also sells ATVs and snowmobiles to supplement the offseason.

"With low interest rates, more secure jobs and healthy 401(k)s, people are feeling like it's OK to have fun and recreate again," he said.

John Ewoldt • 612-673-7633