Four big players on how far the segment’s come and where it’s heading next — in style
What’s happened in the pontoon market in recent years is breathtaking. Simple aluminum platforms covered by scratchy AstroTurf-like carpets and topped with beige fishing seats used to be the norm. Today’s pontoons can still be affordable, but the category has expanded to included classy inlaid woods, exotic new flooring materials and modish furniture that would be at home in an upscale home design store.
Oh, and then there’s performance. Basic 10 horsepower engines are still available, but massive twin-engine units that put out dragstrip-worthy power levels have terrifically outgunned those old smokers. When properly equipped, ideally with a third tube providing enhanced stability, weekend cruisers can find themselves gliding across the water at an almost-unnatural 50 mph and beyond.
It’s a whole new world in pontoons. As dealers, boat builders, engine manufacturers and consumers adapt to a world where pontoons are cool — not corny — where the market goes next is anyone’s guess. Given recent history, though, it’s going to be fast, fun and astonishingly fancy.
Premier’s next act
Talking to Bob Menne, president at Minnesota-based Premier Marine, his sense of accomplishment and excitement at the segment’s growth is clear. Premier, a family-run company, got its start in 1992 and now, 22 years later, its products are hardly recognizable from where the company and industry were at its beginning.
Reading from some in-house stats, Menne says that Premier has captured about 12 percent of the pontoon market. He added that the pontoon category comprises about 41 percent of all aluminum boats, and that pontoons account for approximately 33 percent of all outboard-powered boats sold today. It’s staggering growth and a dramatic reversal of perception for a category once derided as low-tech cruisers for the old folks.
“It’s a younger buyer, and we’re taking market share away from the fiberglass runabout industry,” Menne said. “The numbers of boaters is picking up. When we hit the downturn, the number of boaters had dropped off. On the return, they’re going to pontoon boats.”
The company’s opulent Grand Entertainer is a great reference point compared to the pontoons of yesteryear. Depending on exact configuration, the Grand Entertainer can be 30 feet long and nearly 9 feet wide, with a third “PTX” tube for high-speed stability and steering, Flexsteel furniture, an onboard changing room, hydraulic steering, high-performance speakers with a subwoofer, maple-inlaid steering wheel, a so-called Island Bar with lighted stemware holders and an electric sink, underwater LED lighting and available dual 300-horsepower engines — a level of power that was, until recently, reserved for supercars and yachts.
Even as boats such as the Grand Entertainer and double-decker and waterslide-equipped Sky Dek have grown in sales, Premier’s top sellers continue to be mid-level models like the Solaris and Sunsation.
With the price of fiberglass boats skyrocketing in recent years, as increased governmental regulations, stressed suppliers and strained economies of scale continue to impact the segment, Premier doesn’t feel that has led to the rush into pontoons in recent years.
“We have seen our average selling price go up considerably in the last few years because they’re buying bigger boats, they want more amenities and they’re loading them up with a lot of options,” Menne said. “I think it’s the style of the pontoon [accounting for the increased sales], adding a lot of nice furniture, nice helms, a lot of seating and easy on and off the boats for the passengers if it’s young kids or if it’s adults.”
As more young families gravitate toward pontoons, Menne said the company has seen a huge increase in water sports activities, and growth in customers requesting pontoons fitted with towers for wakeboarding, skiing and other towable activities.
Beyond new capabilities enabled by more powerful engines and sport-specific features, Menne said the flat decks of pontoons have allowed engineers and designers to let their imaginations run wild with features like attachable floating sport nets, slides and technology integration features that have increased the appeal of pontoons with younger, tech-savvy buyers.
Premier’s growth has created a handful of challenges as the company ramps up to manage the increased demand. Space at its manufacturing facility is constrained, yet the company has continued to expand its headquarters footprint with creative logistical management. Transportation, especially as pontoons have grown in size, has increased shipping costs for the company and caused it to add additional trucks and drivers to its fleet.
“Shipping is and continues to be … something that we have to be focused on,” said Connie Weinman, Premier’s sales and marketing coordinator. “As we sell more [larger] boats, the Grand Entertainers and the tower boats and the slide boats, you lose the number of boats on your load. Instead of hauling five or six, you may be down to hauling two or three, so that puts more pressure on your trucking.”
Models that are up to 10 feet wide — a Premier hallmark — also add to the shipping challenges, a unique challenge that is much less of a factor for manufacturers of V-hull boats.
As pontoons continue to grow, Menne expects more engine manufacturers to follow Evinrude’s lead by developing pontoon-specific outboards to cater to the audience. Sterndrive-powered pontoons continue to be a very small part of the market — less than a percent of total sales — with their own advantages that he said will likely continue at their current level, or perhaps decline slightly going forward.
With many design trends descending on the category in quick succession, Premier has been focused on making its boats easy to get on and off, improving seating and materials and upgrading entertainment features such as sound systems, toys and upscale touchscreen instrumentation that, in some cases, includes integrated owner’s manuals for on-the-water troubleshooting.
In terms of what’s next, Menne looks to the dealers, suppliers and customers that are never shy with recommendations — fireplaces are a frequent suggestion — and features that improve the versatility of the boats.
“We have seen in the last few years growth in some of our models that are combination, they’re designed for cruising, but they also have amenities for fishing – a live well – and maybe a couple of fishing seats in the rear and stuff like that,” Menne said. “Those type of models are continuing to grow, too.”
Sales success begets increased competition, and Premier expects additional competition from already established manufacturers that have yet to jump into pontoons. With its unique market position as a high-lux boat builder, the company isn’t worried about future entrants impacting its bottom line.
Bennington’s big growth
Few boats show the upward mobility of the pontoon market better than Bennington’s boats fitted with the available glossy African mahogany exterior paneling.
Company president Jake Vogel has been with the company since it was founded. After a brief stint away, he has been back since 2009 steering the company past the Great Recession.
In the intervening years while the market has exploded, Indiana-based Bennington Marine has moved into the No. 1 spot in the marketplace in terms of units sold. Its crafts range in length from 17 to 28 feet, with a variety of triple-tube and performance options to create something for everybody, should they order it.
“Sales have been very strong,” Vogel said. “They’ve continued to push our limits as far as capacity goes, so we’ve expanded and continued to expand our facilities and have continued to try to manage that growth because we don’t want to jeopardize the quality and try to grow too fast.
Sales growth has been accompanied by internal growth at Bennington that has included more people and more trucks, among other changes, to keep up with current demand and prepare for future expansion.
As the market has expanded, the company has seen its demographics move beyond empty nesters and retirees that enjoy pontoons for their ease of use and physical accessibility.
“We’re finding a lot of young buyers in our product as well because young buyers they like to be able to go to the sand bar and have a lot of friends and have a good time — pontoons are very conducive to that,” Vogel said. “We’ve done a lot of things to improve the performance of our boats … and the engine companies have helped make more powerful engines that work on our boats also. Another thing that we’ve done as Bennington, and even as an industry, is to design more stylish boats that are just more appealing to a variety of buyers not just the older buyers.”
That increased performance has expanded the versatility of pontoons, already a strong suit of the category. More power and the advent of triple-tube models have enabled water sports activities and higher speed cruising that has attracted a wider audience.
“It’s a trend that takes time where people recognize the versatility of the boat and so in a lot of ways it can be a better value for a consumer versus buying two boats, a fiberglass and a pontoon,” he said. “If you’re going to buy just one, in a lot of consumers’ minds if [they] can put the horsepower on the pontoon and go fast and have a tight turning radius … and perform water sports, then maybe I just save the money and stick with the one.”
Keeping current with shifting customer trends is a challenge for all pontoon builders. Bennington’s challenge is staying in touch with its high-end clientele to stay on top of changing tastes in colors, materials, furniture and even flooring. Vogel said flooring has become a major trend with carpet and traditional vinyl flooring being superseded by woven designs, teak and even bamboo.
New tastes and ideas often result in additional floor plans, which can impact builders’ economies of scale. While pontoons traditionally had L-shaped couches and a pair of fishing seats, new configurations — like Bennington launching the segment’s first stern-lounge chairs — have become a major quality of today’s pontoon designs.
“Honestly that’s another one of the drivers of the success of pontoons,” said Vogel. “We’re not constrained by the hull of a fiberglass boat so each year we can more easily reconfigure and move around and do things, try new things, try it, and if it doesn’t work as well as we thought, not a huge investment on our part.”
When asked how much fancier these boats can get, Vogel says that ideas come from all around, and that the sky is the limit with no end to the creativity or proliferation of additional floor plans in sight.
Bennington is planning for 10 percent growth in 2014, but Vogel notes that the company’s growth rate has been decelerating and that he doesn’t expect double-digit growth to continue far into the future.
“Things don’t go up forever and they typically don’t even go up and plateau, so we’re going to be conscious of watching that growth and the acceleration or the deceleration of that growth, and keep an eye on it and just doing our part to try to ensure that it doesn’t actually turn to negative growth any time in the near future,” he said.
Smoker Craft’s focus on performance
Part of the Smoker Craft family, its Starcraft, Sylvan and SunChaser brands offer pontoons that range from affordable family and fishing vessels up to Starcraft’s extravagant Majestic with individual versions starting north of $55,000.
Peter Barrett, the company’s senior vice president of marketing and corporate development, said its trifecta of pontoon brands — Starcraft, Sylvan and SunChaser — makes its combined market share more than most in the industry would expect.
That diversity has allowed the company’s pontoon offerings to find success at different sub-segments and price points. Overall, Smoker Craft has seen consumer interest surging in the performance realm, a factor that has specifically benefitted Sylvan.
“We definitely see the market trending towards performance,” Barrett said, citing the company’s V-shaped Revolutionary Planing Technology (RPT) tubes and triple-tube models. “We’re seeing a need for more performance and we’re seeing everything powered by higher horsepower.”
One of the reasons for the increased focus on performance, Barrett said, may be the phenomenon of families that traditionally owned two boats downsizing to a single pontoon that can do it all. Additional features and improved comfort have aided this transformation. As a result, the company’s pontoon demographics now include more young families that may have considered entry-level runabouts in the past.
“The pontoon has evolved into a vehicle that the consumer can do a lot more with, and they’re taken much more seriously than they have been in the past when the pontoon was … really just used for cruising,” he said. “Now the consumer looks at the pontoon as the multipurpose water vehicle.”
As usage shifts, so has the company’s marketing message, now includes more including of families swimming, tubing, jumping off of the boat and enjoying more active pursuits.
Trends toward more youthful, exciting designs and features have become a major focus for Smoker Craft’s product planners who have incorporated more floor plans with bars, LED lighting inside and out and a better usage of space in the back of the boat.
Customization has also been a trend that’s gained importance in pontoons, as it has in many other industries. Whether it’s colors, layout or furniture, Barrett said customers want the ability to create something that’s unique to their tastes.
“We’re seeing that largely in flooring,” he said. “In addition, we’re also seeing lighting effects … LED lighting is really popular and the consumers [are] really liking it.”
Looking forward, Barrett speculates that pontoons may soon include better electronics that synch with mobile devices to control many aspects of the boat, lighting included, from a smartphone rather than on-board controls.
Another trend is pulling weight out of the boats through a variety of means, with the goal of improving performance and economy, while also requiring less horsepower for boats of a given size.
“We’re cautiously optimistic about the market,” Barrett said. “The shows this year have been relatively well attended and the response has been very strong … we’re very optimistic about 2014.”
Nautic rides the cool wave
Holding the third-largest spot in the pontoon industry in terms of annual units sold, Nautic Global Group has a huge footprint in the market with the Sweetwater, Sanpan, Aqua Patio and Parti Kraft family of brands that capture approximately 12 percent of the category. Within the company, pontoons comprise slightly more than 50 percent of the overall product mix.
Nautic recently relaunched its Parti Kraft brand with new materials, modern colors and upgraded furniture that’s designed to evoke a similar vibe felt on today’s high-end patios. After showing the upgraded line to its dealers, new Parti Krafts will be seen at the season’s major boat shows.
“Everybody’s got their special seating configuration or a different rail design, but a lot of the floor coverings are the same, and the vinyls are very similar,” said Steve Tadd, director of sales and marketing for Nautic Global Group. “In this sea of sameness we wanted to do something that was out of the box and with Parti Kraft, the vision for that brand is to take the love affair of people have with their backyard patio, kind of a high-end backyard patio and bring that onto a pontoon boat.”
Tadd added that what was once considered high-end in the pontoon market is now solidly mid-level.
“It’s crazy, and that’s what attracts people who were used to buying a small cruiser or a large runabout into this type of boat,” he said. “The fact that outboard power has come such a long way and is so clean and quiet, you don’t have the smoky old outboards that you had to deal with [and] it’s one more reason for pontoon boats to be very appealing.”
Rather than focusing explicitly on attracting a younger demographic, Parti Kraft’s mission is to change perceptions of what a pontoon can look like with chic design and upgraded materials.
“It’s been one of those things that some people love it and [for] some people it’s not for them,” said Tadd. “For somebody who wants to have a boat that looks different than their next-door neighbor’s, which there is a definite market need for that, this is one of the options without going crazy with a $100,000 pontoon boat.”
With its other pontoon brands, Nautic makes it simple with “good, better, best” respectively covering its Sweetwater, Aqua Patio and Sanpan. Even within its Sweetwater line the company sees three distinct trim levels that follow a similar ascending pattern.
As pontoons, outboard deck boats and aluminum fishing boats are all concurrently showing signs of strength in the marine market, Nautic is ideally positioned to capitalize on the market’s current trends.
Though its sterndrive fiberglass division struggles with the rest of the category, the company feels some of its fiberglass customers have migrated to other divisions. Those trends, combined with the trajectory of the Baby Boom generation, have Nautic tooling up for 10 to 20 years of sales growth.
“Pontoon boats and deck boats will enjoy growth for probably 10 to 15, maybe 20 years, because of the fact that there is such a huge population in the Baby Boom generation where this is just the perfect boat for where they’re at in their life,” Tadd said. “That said, through the recession, because these were areas where you had some early growth coming out of the recession, these types of products have also received massive amounts of creativity, innovation and have become much more mainstream than they ever were before, which has attracted younger buyers.”
Another factor helping boat builders in the category is the lower cost of development and experimentation compared with fiberglass designs. This fact of life has enabled manufacturers to innovate more than in the past, with quicker turnarounds and without making the types of investments that are required in other categories of the marine market.
“You can come up with a new level of furniture or a different bend to your rails or different color schemes,” Tadd said. “So through the recession I think you saw a rapid innovation in the pontoon business that you didn’t see in other parts of the industry that now fiberglass boat manufacturers, us included, are playing catch-up to pontoon boats. It’s just shifted. All of a sudden pontoon boats became cool.”
That cool factor has gone beyond consumers to include dealerships that, in the past, wouldn’t consider carrying pontoons in their store. Within just the last 5 or 6 years, Nautic has seen dealers that previously “wouldn’t be caught dead stocking pontoon boats” now raving that pontoons are their most mainstream, popular tyeps of boats in stock.
The company has its eyes on another segment, coastal packages of pontoons that appeal to fishermen and others interested in such settings — something that wouldn’t have been possible without powertrain advancements and performance-enhancing features like triple tubes.
When asked if the pontoon market was currently in a bubble — destined to burst — Tadd said he feels the market and his company’s investments are justified due to many different factors boosting the segment.
“I think the market has just changed, he said. “And so will the market change again? Absolutely, but for now I think the fact that pontoon boats are cool and mainstream, that’s going to last for a very long time.”