Across the U.S., July 4th weekend is one of the busiest boating weekends of the year, and this weekend will be no different, especially in Minnesota.

Hundreds, if not thousands, of owners of boats, pontoons, canoes and kayaks will float on the many lakes in Minnesota for recreational fun in the sun.

The money those water-fun enthusiasts spend on their watercraft annually ranks among the most in the nation, making marine vehicle manufacturing and sales a key component to the state's economy. For manufacturers and dealers, knowing Minnesotans have access to thousands of lakes and the Mississippi River, the St. Croix River and the Minnesota River make the state prime territory for sales.

"Minnesota has such a deep history around recreational activities on the water," said Grant Wildgrube, global product strategy manager at St. Peter-based Alumacraft, a maker of aluminum boats. "Fishing, hunting, water sports, as well as the calm that being on the lake can bring, has been a part of so many Minnesota residents' lives. There is an ingrained affinity for our water resources and the great diversity across the state that exists in many families."

In 2020, Minnesota ranked fifth in the country in total marine expenditures, said Jennifer Thompson, senior vice president of boat and sport shows at the National Marine Manufacturers Association. That year, consumers in Minnesota spent $1.1 billion on power boats and trailers to engines and marine accessories, an 14% uptick in spending when compared to 2019, said Thompson, also a Minnesota resident.

"It's really a significant, economic boon for the state," Thompson said. "It's really not the case for other states. It's big business here."

Outdoor lifestyle supported marine industries

Lake life in most corners of the state historically has contributed to the Minnesota economy, according to county historical societies and the Land-O-Lakes Classic Boat Club. In 1889, Royal Moore started Moore Boatworks, later Minnetonka Boatworks, in Wayzata. The company's mahogany-hulled boats could be seen for years on Lake Minnetonka.

And while Minnesota can't take credit for inventing fishing boats or engines, the state's companies for years have invented improvements or new types, including the pontoon. That was the brainchild of Ambrose Weeres of Richmond, who was named "Mr. Pontoon" by the state Legislature in 1991.

Ralph Samuelson, 100 years ago last month, invented water skiing on Lake Pepin. It led to several water ski manufacturing operations as the sport took off, including Nor-Craft Marine Division of Northwest Plastic in St. Paul and White Bear Water Ski Company.

Dave Saucier, a world-class water skier, manufactured the first fiberglass water ski. The company he started became one of the biggest players in the industry in the early 1970s before the oil crisis and thus sky-high resin costs led to bankruptcy.

And then there was Larson Boat Works and later Crestliner, which began in the 1920s in Little Falls and later became part of the late Irwin Jacobs' consolidation of the industry into Genmar Holdings. That consolidation, in turn, was sold off to others.

The recreational boating industry's economic impact in Minnesota — between manufacturing and services — is still significant. In 2018, it was $3.1 billion, supporting 10,936 jobs and 690 marine businesses, per the marine association. In Minneapolis specifically, the industry's economic impact was $1.8 billion, sustaining 308 businesses and supporting 5,911 jobs.

"That's one of the things that makes Minnesota unique," Thompson said. "We're home to several U.S. boat manufacturers with headquarters here, and that's supporting thousands of jobs in our state."

Boat businesses continue to thrive

Home-grown brands continue to grow, including Wenonah Canoe in Winona; Alumacraft, which is owned by Canadian company BRP; and pontoon maker Premier Marine in Wyoming, Minn., which last year was acquired by Elk River-based Envision Co.

Wenonah Canoe has roughly 70 people on payroll, Alumacraft employs about 230 workers at its St. Peter site and is actively recruiting to fill 45 more positions, and at the time of the deal, Premier Marine had more than 200 employees.

The U.S. boating industry experienced significant growth during the pandemic, with people seeing the benefits of socially distancing on the water, Thompson said. And with normal travel plans disrupted, people used stimulus checks or extra spending cash to splurge on watercraft, said Bill Kueper, vice president of Wenonah.

"The pandemic introduced a lot of people to paddling," he said.

Demand for their products forced state manufacturers to boost production, forcing some to the brink of their capacities.

For Wenonah Canoe, the largest domestic manufacturer of composite canoes and kayaks, demand was so high in 2020 and 2021 the company emptied its inventory and had to put research and development plans on hold while placing all of its resources on production, which included transferring desk workers into roles at the factories, said Kueper, who was among the office workers pitching in for production needs.

Alumacraft is expanding its manufacturing capabilities to meet consumer demand, Wildgrube said, and Premier Marine is investing in a 150,000-square-foot factory in Big Lake that will open by the end of the summer, said Matt Homan, the company's chief executive.

Larger vehicle makers based in Minnesota that have added marine segments over the years are also experiencing a rise in sales.

Minnesota companies new industry consolidators

Medina-based Polaris Inc. reported revenue of $211.5 million for its marine segment for the first quarter of 2022, a 6% increase compared to 2021. Polaris acquired Elkhart, Ind.-based Boat Holdings in 2018 for $805 million, acquiring with it watercraft brands Bennington, Godfrey and Hurricane.

Eden Prairie-based Winnebago, meanwhile, produced $126.5 million in revenue during its recent quarter, a 637% increase compared to the same quarter in 2021, boosted by the company's $255 million acquisition of Bristol, Ind.-based Barletta pontoon boat last July. The company sold 1,655 boats for the recent quarter. For the same three-month period in 2021, Winnebago's marine segment did $17.1 million on 83 boat sales.

Sales are starting to cool down amid inflation following extraordinary growth over the past two years, but are still above pre-pandemic levels, Thompson said. In addition to keeping up with demand, though, boat and watercraft builders are also challenged by setbacks in their supply chains.

Cold weather events in 2021 knocked out dozens of refineries in Texas, affecting liquid and solid resin material needs for Wenonah Canoe, which has over 100 unique supply chains, Kueper said.

"We had to pivot and qualify alternative suppliers and ration ourselves," he said.

Winnebago reported backlog for its marine segment was $245.4 million and remains at elevated levels "as low dealer inventories persist."

It's a common trend among manufacturers across the nation, Thompson said, but companies are starting to see improvements in their supply chains, which has helped fulfill orders that are still in high demand.

"While there are certainly some real economic challenges we are all facing across many industries, from rising interest rates to high inflation, we are really excited about the future for Premier Marine," Homan said.

New interest offers potential opportunity

Interest in boating, nationwide, is higher than before COVID, but far below a high in 2020 and 2021, the NMMA says. In 2021, the number of first-time boat buyers exceeded 415,000, a 15-year high not seen since before the Great Recession, Thompson said.

That trend is evident in Minnesota, which ranked second in the U.S. in boat registrations in 2020 with 819,377, up 7% over 2019, Thompson said.

"During the pandemic we have only seen this love for the outdoors grow," Homan said. "Consumers simply are not willing to sacrifice important time with family, and boating is one of the best ways to be together."

Many people in Minnesota own more than one boat or watercraft. According to a the state's Department of Natural Resources, in 2020, there were 591,546 adults in Minnesota with some type of registered water vehicle, either motorized or nonmotorized.

"Minnesotans enjoy getting out on the water," Thompson said. "It's something we do and it's become a full-scale industry here because of that."