Nautic Global Group CEO Discusses 2014 Brand Strategies

Matt Gruhn, President of the Marine Retailers Association of the Americas interviewed Nautic Global Group's (NGG) CEO, Jim Malone in mid December to discuss the organization's future strategies and direction. In front of a small group of NGG's largest dealers and various US marine media, Malone addressed several dealer issues as well as discussed some of the company's goals moving forward.

Dan Higgins of Hamlin's Marine in Maine asked Malone to break down the various segments NGG sells in and comment on each.

"We have 75 percent share of the outboard deck boat market and overall we have only 50 percent share,' responds Malone. "We have a lot of people coming at us [in the deck boat category]. It's a growing double-digit growth area. If we only have 50 percent of the market share there, that's a lot of room to grow.

"In terms of pontoons, we expect to have continued growth. We have four brands with overlapping price points. We expect those price points and offerings to increase on the upside in terms of features, components and style. We believe with Polar Kraft we've got a gem in the making. That has not had the attention we think it deserves either from a marketing aspect or a sales aspect. We think it has the potential to way out grow the market that it's in.

"For Rinker, we've heard a lot of people say the cruiser market is a dying breed. I'm not so sure about that. We're not positioning ourselves thinking that it's going to go away. I believe, and I don't know if I'm right, that it will trail but that it will come back. Bigger cruisers are a terrific high-value product. In the last two or three months it has grown against the market. Whether it's dumb luck or it's that we've got the right product and people are starting to see it and gravitate to it, I don't know.'

Gruhn then suggested that with spring around the corner, NGG dealers were concerned that lead times weren't what they should be and asked Malone what his strategy was for addressing the issue.

"We've already begun to do that,' relied Malone. "Our current production schedule is 20 percent higher right now than it was this time last year. We are dramatically increasing our capacity of throughput on pontoons and Hurricanes. Our Hurricane capacity we expect to double and that is already 30 percent over where we were [last year]. In terms of build strategy and number of units, Sweetwater is the biggest mover and then Aqua Patio and then Sanpan. In terms of flow, we're not going to mix the Aqua Patio and Sanpan with the Sweetwater. So the Sweetwater will have a much straighter line through without the start and stop interruptions that we've had in the past.'

Gruhn said that it was no secret that NGG had "struggled for a long time' to deliver parts to dealers in a timely fashion.

"Parts sends me on fire,' responded Malone. "Our dealers have found other ways to buy parts because we haven't been as responsive to that as we should be. Well that's pretty crazy. For dealers it ought to be a profit center for them and it ought to be a profit center for us. Part of our plant reconfiguration is that we're having a whole facility dedicated to the parts and warranty issue. We have seen our backlog on parts been reduced dramatically. About three or four months ago we had about 1,800 line items that were late. The same measurement as of this week we were down to 349. Now that still makes me crazy that we've got 349 late parts issues. As long as dealers can't think of us first to handle their parts problems, that will be a profit area that is lost to us. It's an aggravation that our dealers don't need. We'd like to take that opportunity and turn it into a great asset.'

Another step NGG has taken to address its parts challenges is the hiring of additional staff for the department. "This time last year, we had one person in parts,' says Malone. "Today we have seven.'

Malone says positioning NGG to have more capacity than what it currently sells will better position it as the economy improves and as its brand penetration improves. "Up until recently we've been able to sell more than make,' he explains. "We're about to flip that. Selling will be pulling it versus having to push stuff through the system, through the process. You can suddenly outgrow your ability to produce. We don't want to find ourselves in the position of having out grown it. We want to stay ahead of that.'

Malone says NGG is also seeking to grow its international presence. "We're doing things in China right now,' he says. "We're growing in Russia. The Middle East had been a nice Rinker place; we think will come back. In the United States I'd prefer to not get into the specifics of where we see some opportunities.'

Moving forward, Malone says NGG's goals include improving its boatbuilding capacity and capability and improve profitability. He says NGG's dealer network is the company's most valuable asset. "They create the value [for our brands].'

Nautic Global Group is the maker of the Hurricane, Rinker, Godfrey (including Sanpan, Aqua Patio and Sweetwater), Polar Kraft and Parti Kraft boat brands.

To watch the entire one-hour and eight-minute interview, click here