Minnesota’s watercraft industry is big business and continues to grow

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In the US, the 4th of July 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 boat, pontoon, canoe and kayak owners will be swimming on Minnesota’s many lakes to enjoy themselves in the sun.

The money these water fun enthusiasts spend on their watercraft each year ranks among the highest in the nation, making watercraft manufacture and sale a key component of the state’s economy. For manufacturers and dealers who know Minnesotans have access to thousands of lakes and the Mississippi River, St. Croix River and Minnesota River make the state a premier retail destination.

“Minnesota has such a long history of on-water recreation,” said Grant Wildgrube, global product strategy manager for St. Peter-based Alumacraft, an aluminum boat manufacturer. “Fishing, hunting, water sports, and the tranquility that being on the lake can bring have been a part of the lives of so many Minnesota residents. There is an ingrained affinity for our water resources and the great diversity found across the state in many families.”

In 2020, Minnesota ranked fifth in the country in total marine spending, said Jennifer Thompson, senior vice president of boat and sport shows at the National Marine Manufacturers Association. This year, Minnesota consumers spent $1.1 billion on power boats and trailers for engines and marine supplies, a 14% increase in spending compared to 2019, said Thompson, who also lives in Minnesota.

“It’s really a significant economic boon for the state,” Thompson said. “That’s really not the case in other states. Here is big business.”

Outdoor lifestyle supported the marine industry

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

And while Minnesota doesn’t pride itself on inventing fishing boats or engines, state companies have been inventing improvements or new types, including the pontoon, for years. That was the idea of ​​Richmond resident Ambrose Weeres, who was named “Mr. Pontoon” was appointed.

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

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

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

The economic impact of Minnesota’s recreational boating industry – between manufacturing and services – remains significant. In 2018, it was $3.1 billion and supported 10,936 jobs and 690 shipping companies, according to the Navy Association. In Minneapolis in particular, the industry’s economic impact totaled $1.8 billion, supporting 308 companies and 5,911 jobs.

“It’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 supports thousands of jobs across our state.”

Boat shops continue to thrive

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

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

The U.S. boating industry has seen significant growth during the pandemic, with people realizing the benefits of social distancing on the water, Thompson said. And with normal travel plans disrupted, people took advantage of stimulus checks or extra spending to splurge on watercraft, said Wenonah vice president Bill Kueper.

“The pandemic has gotten a lot of people into paddling,” he said.

Demand for their products forced state-owned manufacturers to ramp up production, pushing some to the brink of capacity.

At Wenonah Canoe, the largest domestic manufacturer of composite canoes and kayaks, demand has been so high in 2020 and 2021 that the company has had to empty inventories and put R&D plans on hold while it allocates all of its resources to the Production has been concentrated, including shifting desk workers to roles at factories, said Kueper, who was among the clerks lobbying 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 CEO.

Larger Minnesota-based vehicle manufacturers, which have added marine segments over the years, are also seeing an increase 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, up 6% compared to 2021. Polaris acquired Elkhart, Indiana-based Boat Holdings in 2018 for US$805 million, acquiring Bennington, Godfrey and Hurricane watercraft brands.

Eden Prairie-based Winnebago posted revenue of $126.5 million last quarter, up 637% from the same quarter in 2021, driven by the $255 million acquisition of the Bristol, Indiana , resident Barletta pontoon boat last July. The company sold 1,655 boats last quarter. For the same three-month period in 2021, Winnebago’s marine segment generated $17.1 million from 83 boat sales.

Sales are starting to cool amid inflation after extraordinary growth over the past two years, but are still above pre-pandemic levels, Thompson said. However, boat and watercraft builders not only have to keep up with demand, but are also challenged by setbacks in their supply chains.

Cold weather events in 2021 have shut down dozens of Texas refineries, impacting the need for liquid and solid resin materials for Wenonah Canoe, which has 100 unique supply chains, Kueper said.

“We had to switch and qualify alternative suppliers and ration ourselves,” he said.

Winnebago reported a backlog for its marine segment of $245.4 million and remains at elevated levels “as dealer inventories remain low.”

It’s a general trend among manufacturers across the country, Thompson said, but companies are beginning to see improvements in their supply chains, which has helped fill orders that are still in high demand.

“While there are certainly some real economic challenges that we all face across many industries, from rising interest rates to high inflation, we are really excited about the future of Premier Marine,” said Homan.

New interests offer potential opportunities

Nationwide, interest in boating is higher than pre-COVID but well below a peak in 2020 and 2021, the NMMA says. In 2021, the number of first-time boat buyers surpassed 415,000, a 15-year high not seen since the Great Recession, Thompson said.

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

“During the pandemic, we’ve only seen that love of nature grow,” Homan said. “Consumers just aren’t willing to sacrifice important family time, and boating is one of the best ways to be together.”

Many people in Minnesota own more than one boat or watercraft. According to the state’s Department of Natural Resources, there were 591,546 adults with a registered watercraft, either motorized or non-motorized, in Minnesota in 2020.

“Minnesotans enjoy getting out on the water,” Thompson said. “It’s something we do, and that’s why it’s become a full-fledged industry here.”

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