When a 40-foot container headed for the Netherlands landed at the loading dock of BIG Adventures rotational molding, or rotomolding, factory in Fletcher, NC last week, it was all hands on deck.
It was the first time the company was shipping a mixed load of Hurricane, LiquidLogic and Native Watercraft boats overseas since owners of Legacy Paddlesports LLC and Hurricane Aquasports agreed to merge in late July. The merger put Legacy’s rotomolded Native Watercraft (fishing kayaks) and LiquidLogic (whitewater) brands and the ABS thermomolded Hurricane (recreational and touring) brand under a single management team in a bid to make all three more competitive.
“We had team members from Hurricane there and basically we emptied out the front office and had 10 people helping,” recalled Steve Jordan, the former president of Hurricane Aquasports, who is now heading up sales and marketing for BIG. “It was a mixture of management, production workers and owners who just got back there as a team.”
While the load went relatively smoothly it revealed dozens of revelations about how the combined company can become more efficient in its quest to boost margins and offer dealers better pricing. As expected, it also provided insight into the logistical challenges and opportunities facing BIG Adventures as it strives to close a big gap between it and category giants Confluence Outdoor, Johnson Outdoor Inc., Pelican International Inc. and Hobie Cat Company.
“Where it will get complicated is when we consolidate domestic shipments,” Jordan explained. “On export containers, boats are going to one point and unloaded, so we can load any way we deem most efficient. But with regional domestic shipments, we’ve got to load by brand, by stock number and by dealer, so we need to figure out the most efficient way to do that as well as the best way to get inventory from one factory to the next. We are learning each day as we go along.”
Although Legacy Paddlesports and Hurricane Aquasports owners announced plans to merge in late July, the transaction only closed Sept. 1. With that and the trade show season behind them- and pre-season deadlines just two weeks away Jordan and his team are hustling to find synergies by February when shipments to dealers begin to ramp up for the spring selling season.
Don Griggs, former principle at Hurricane Aquasports, has taken the CEO title at BIG Adventures, while Jordan, who had served as Hurricane’s president, is leading up sales and marketing. The company takes its name from the initials of Boyce Greer, the former principle of Legacy, who died in a whitewater kayaking accident in 2011. Shareholders include his widow, Ann Greer, and Hurricane’s prior shareholder group, which includes Hurricane Aquasports founder Pat Renfro, who also owns Accu-Form Polymers, a Warsaw, NC contract manufacturer that makes Hurricane’s boats.
Legacy strategy’s mixed results
The deal follows a strategic shift Legacy made in 2012 to focus on price points near and above $1,000. To execute the strategy, Legacy trimmed the SKU count at Native to focus on higher priced pedal drive models and in August 2014 converted LiquidLogic U.S. business to a direct-to-consumer model. The company also phased out its Heritage brand.
“Their dealer base has really shrank quite a bit in last two years because of how they priced the product and narrowed the offering,” explained Jordan, who helped found LiquidLogic and merge it into Legacy Paddlesports in 2007 before joining Hurricane in 2010. “They needed assistance with future capital and running the business and both companies have been in North Carolina for a long time and had prior relationships.”
In 2014, for instance, Hurricane acquired several molds from Legacy to launch New Wave by Hurricane so its dealers could offer a lower-price rotomolded boat.
While Legacy missed its internal sales projections in the first half of the year, Jordan said sales of its Native Slayer Propel 10 and 13 sit-on-top fishing boats with pedal drive took off this year. He attributed the growth to Native dialing in the right price points and penetrating high end tackle shops as well as kayak fishing retailers that have emerged in the last five years separately from traditional paddle sports dealers.
LiquidLogic returns to rec category
BIG Adventures has already shaken up the product line up at all three brands.
At Outdoor Retailer in August, the company announced it would phasing out its year-old New Wave sub-brand and rebrand its Marvel 10, 12 and 14.5 as LiquidLogic boats. LiquidLogic will also offer versions of Native’s Manta Ray kayak minus fishing outfitting and reintroduce the Inuit sea kayak model. Native showed the first model of its Ultimate FX Propel 13 kayak-canoe hybrid featuring Propel drive, while Hurricane exhibited a new rec boat, the Santee 120 Sport.
“Pre-season orders are coming in well above what they were last year,” Jordan said, noting that BIG Adventures has already moved all three brands to a single independent sales rep force, while keeping some in house territories. “Hurricane has been on a strong growth curve with the light weight proposition and we have a strong relationship with those retailers. And now we have a broader offering and can offer some of the same terms on Native and LiquidLogic. We will bring a little bit more flexible terms with dating.”
With pre-season winding down, the BIG Adventures team is focusing on optimizing efficiency at the company’s two manufacturing plants.
“The next step is operational; getting two manufacturing units to coordinate and ship jointly to regions to save on freight costs,” Jordan told The B.O.S.S. Report Sept. 24 after returning from Paddle Expo in Germany. “We still have some minor challenges with our manufacturing sites being six hours apart.”
The company will continue to source Hurricane's lighter weight ABS thermoformed boats from contract manufacturer Accu-Polymer and Native and LiquidLogic boats at the rotomolding plant Legacy built in Fletcher, NC in 2012.
ABS thermoformed construction, on average, yields glossier kayaks that are about 15 pounds, or 25 percent, lighter, but a little less durable than rotomolded boats, which are made from polyethylene.
“The demographics in our sport is aging, so we think that positions us well,” noted Jordan.
While the overhead at Fletcher is higher than at Accu-Form, BIG Adventures is investigating whether the plant can take on outside work. The plant has already taken over sewing seats for Hurricane’s recreational and sit-on-top boats from an outside contractor and there may be opportunities to shift production of thermoformed components for Native and LiquidLogic seat pans and backs to Accu-Form to maximize cycle times and production.
The company is also seeking synergies in distribution for both inbound raw materials and out bound shipments to dealers.
“We are working aggressively on new product development for the future because not only does Hurricane have great momentum, but we can bring that over to Native and, visa-versa, we can bring some of the great fishing things they have done at Native over into Hurricane. We are a lot stronger to have three strong brands under one roof to combat the competition.”
No plans for SUP market
One significant hole in BIG’s product portfolio is stand-up paddle boards (SUPs), which are the fastest growing segment in paddle sports. Hurricane killed a plan to launch an ABS thermoformed SUP a few years ago after dozens of brands began importing inexpensive 30-pound boards from China.
“We want to be a full-service supplier to our dealers, but that’s a very competitive industry,” said Jordan. “There are a lot of (SUP) brands not making money out there which is why you are seeing a lot of consolidation. It’s now getting to point where these companies have to start making money.”
BIG Adventures is exploring some “ecologically-based manufacturing techniques” but has no plans to enter the fray any time soon.
“The only way we would embrace the category is if we could manufacture it in the U.S. and solve the logistics issues,” he continued. “We are not going to manufacture SUPs in China and we are certainly not going to import SUPs from China.” We are very proud to be a North Carolina manufacturer and” Made in the USA.”
In the meantime, BIG Adventures has begun mapping out routes and a schedule for spring deliveries to determine how to stage inventory at each factory to maximize efficiency.
“The sales team will be plugged in and drive those preseason orders to those ship dates, so we are not making it up as we go,” said Jordan. “It took a lot of staff to load our first container, but as we become more efficient we can free up some of those human resources.”