W W ThePADDLER 26 T H E S T A T E O F KAYAKING Words: Corran Addison By 1999, when you’d go to buy a kayak, you had the choice of about 15 models, in three sizes, in eight colours, from each of the 10 brands, available in three shops, all within an hours drive. Now, 20 years later, Confluence, the once proud owner of Dagger, Perception and WaveSport, shut down two of the three whitewater brands – after all you don’t need three brands losing money, when you can have just the one. ThePADDLER 27 ThePADDLER 28 Forgive me if I get a bit wonky here, and if this deviates a bit from my usual tack of giving specific instruction on some paddling related topic, but I feel that the state of the whitewater kayaking industry is in jeopardy, and this needs to be addressed. The simple fact is that whitewater kayaking as an industry is not healthy. It is constantly on the verge of financial collapse. Little more than a cursory glance at the last 20 years is all it takes to see the dire straits that it’s in, and if you love kayaking, especially white water kayaking, this is cause for concern, to you, the end user. Let me back track here a little and give this context. My first point is that the information and details are Of course the mountain biking market is far larger going to be somewhat slanted to North America, as than white water kayaking, and it’s a pipe dream that this is the market with which I am most familiar, and will never come to fruition to even imagine that we have the most details. In broad strokes, all this applies could have those sorts of numbers, but what the equally to Europe, but I will be using the North above does tell us is that when people love a sport, American market to make my point. they’re normally willing to pay what’s necessary to get In 1999, the retail price of a kayak was $1,000. In the very best. In kayaking, the end consumer nickelled today’s money with inflation, that’s $1,480. Let’s just and dimed the entire industry, from manufacturer to call that $1,500 to keep things simple. If nothing had dealer, into submission… and near bankruptcy. been changed in the way kayaks were built (cost of No one, even the longest standing or largest selling goods) and there was no other change influencing brand owners, are getting rich. They live modest lives cost of goods beyond simple monetary devaluation, a and do it because they love kayaking. kayak today should sell for $1500, just to be the same as it was in 1999. This ‘profitable’ mountain biking industry is able to continually reinvest in itself, improve bikes, dealer But this is inaccurate. In 1999, the cost of a kayak’s networks, and even have money to lobby state outfitting was about 10-15% of the total manufacture legislature to open up trails (and maintain them). They cost, which was little more than a plastic seat, plastic have millions of dollars in demo fleets out in the thigh brace, basic footrest and a basic backband. marketplace at any moment in time, allowing bikers to Today’s kayaks, with advanced ‘turn-key' outfitting, are test. often as much as 50% or more of the cost of the kayak. This alone should add 30% more cost to that You know, like kayaking used to have. $1,500 price tag I mentioned. Imagine if the kayaking industry had that sort of clout Plastic has improved significantly in 20 years, and the in the UK, and could get some of the access issues cost has gone up too. In 1999 a Superlinear was about that are fought with fishermen revisited and resolved. $0.99/lb. Today it’s close to $3/lb for the best plastics. Probably very few people reading this article were That’s three times the cost. And we put more plastic paddling in the late 1960s and 1970s, but let me paint in the kayaks because they take a lot more abuse. a picture for you. Shipping a kayak used to cost $80. Now you’re lucky if you can ship one for $300. The list goes on and on. If you wanted to kayak, you could not go to a shop and buy one. Kayak shops didn’t exist. While there If you total up all the manufacturing costs, overheads were some early ‘boat builders’ popping up in Europe, and everything else, and make the same margins there were non-existent in the USA. If you wanted to (manufacturer and dealer) that we were in 1999, the kayak, first you had to build a kayak. You needed to ‘natural’ price for a kayak today would be somewhere borrow or rent a mould from the local club, rent a between $2,300 and $2,500! book from a library on boat building, find somewhere I’m imaging your blank stare of disbelief. to make the boat, buy the materials, and over several weeks, painstakingly build yourself a kayak. You A COMPARABLE INDUSTRY probably didn’t get much choice as to design – you But let’s have a look at a comparable industry. One of just got the mould that the club had. my suppliers happens to make mountain bikes. One of these bikes costs about $150 more to make than my the access issues kayak does. It retails for $4,000. My kayak retails for Imagine if the kayaking industry had that sort of clout in the UK and could get some of $1,500. That on its own should tell the story. To expand the mountain bike model a little, consider this. From 2018-2019, full suspension bikes that retail for under $1,000 grew in sales by about $5 million. Bikes in the $3,000-$3,500 range grew by about $38 million, and bikes over $5,000 grew in sales by over $55 million. that are fought with fishermen resolved ThePADDLER 29 ThePADDLER 30 Then along came an entrepreneur called Bill Masters, who decided to take his fledgling kayak company that was producing fibre-glass kayaks and make plastic ones. He was not the first – Tom Johnson and Pierre Arquette both were making a plastic kayak a few years before Perception, but like all kayaks at the time, you bought the kayak directly from the guy who made it. Bill had this idea that rather than selling direct, he’d sell to a shop, and have a network of these shops all across So, what happened? How did we end up here, what are the effects, how do the country (and world). This would mean that paddlers everywhere would be able to try and buy his boats, we fix it, and why should you care? rather than sales always being regional to where X or Y boat builder was situated. His idea caught on, and by 1999 there were over 800 Exactly why the industry or dealers (it’s both hard and proud owner of Dagger, Perception and WaveSport, specialty dealers across North America who sold white misleading to point fingers) worked so hard to shut down two of the three whitewater brands – water kayaks. Larger towns would have 3-4 dealers in suppress the retail price of kayaks well under inflation after all you don’t need three brands losing money for the same town, all carrying the full lines of two to three and the mounting cost of goods is not clear, but it you when you can have just one. happened. In 2017 there were brands still selling brands of kayak, in all sizes and all colours. All in Even the number one whitewater brand in the world, kayaks for $1,000 (let me refer back to the ‘natural’ inventory, all ready for you to buy on the spot, and go Jackson, relies on redneck fishermen to buy $800 price they should be of $2,300 for context). This is a kayaking that day. coolers to pay for their white water kayak habit. retail price that’s barely over the cost of goods plus Dealers were making 40% profit margin on their cost overheads. It leaves no room for the dealer and in fact, And dealers, once a massive network sprawling across (understand that this is gross, not net profit - average many brands were left with no choice but to cut the the country, hosting events, carrying every model in operational costs are about 30%, so in reality after dealer out of the loop. every size from every manufacturer, have all but paying rent, employees and so on, the dealer was making disappeared. We are left today with little more than Suddenly, brands that had global distribution went 10%). Manufacturers were making about 40% margins on 100 dealers in North America, compared to the 800 back to being a regional thing. Like in 1970. It was very cost of goods (also gross, not net). twenty years ago. The gross margin they’re making is hard to get their boats outside of their region, and 30% at best, on a product that costs three times the almost impossible to try before you buy. A HEALTHY, GROWING INDUSTRY price to ship as it did when overheads were 30% of The result was a healthy, growing industry. In 1984, if cost of goods. Every time a dealer sells you a white you lived in the USA and you wanted to buy a kayak, A LOSS MAKER water kayak, they lose money. Literally lose money. your choices were red, yellow, blue or neutral. Of Those that have attempted to keep a dealer network had to cut their margins down so significantly, that one model. By one brand.The Perception white water became a loss maker. Other products the ONLINE DIRECT Dancer.Your decision-making was all about Even the traditional argument of making this deficit up company made were subsidizing white water kayaks, which colour, since there was only one boat by selling you a helmet and dry top has changed. Now effectively creating a situation where every kayak sold model you’d seriously consider. people buy these things online direct from the results in a deficit to the company. Confluence, the By 1999, when you’d go to buy a kayak, you manufacturer, cutting the dealer out of the loop, or had the choice of about 15 models, in forcing the dealer to lower the price significantly, three sizes, in eight colours, from each of thereby making even soft goods a money losing the 10 brands, available in three shops, all proposition. within a one-hour drive. Manufacturers So how do they make money? They don’t. They closed sent sales reps, and pro teams to events their doors. And now, most people need to drive all over the country.They put on hours and hours just to get to the closest dealer, who events, and supported the clubs and maybe carries one or two brands, and only the stores.They would do mass bestselling models, in a few colours. They can of demo days, and sunk hundreds course order you what you want – if you don’t mind of thousands of dollars into waiting two weeks. R&D. Every year the sport reinvented itself. Anyone who Starting to sound like 1970? Well this is where we’re lived through those golden going – rapidly! years from about 1995 to We’re heading into a new world that harks back to the 2003 will remember how old one, where you buy your kayak from the closest exciting it was. local manufacturer, with a choice of models that only changes every few years. And if you want a kayak that comes from another region, you’re ordering it online, waiting weeks to get it, and hope you like it, because you can’t send it back if you don’t.This isn’t a shoe. ThePADDLER 31 ThePADDLER 32 A comment I’ve heard before is that consumers could justify spending $1,000 on a kayak in 1999 (again - $2,300 today if all things went up equally to final price) because designs were evolving so fast. You wanted the latest exciting design, and would pay a hefty price to get it. Those that couldn’t, were forced to buy used boats six months old. This cannot be fixed overnight. It’s a process, and I SO MANY IDEAS don’t have all the answers, even if I have over the last Do you think that one day we just suddenly ran out of few years identified much of the problem. If you, the ideas? An entire industry, collectively, just had nothing consumer, wants to have access to quality boats, of all more to give? This is simply not realistic. Designers kinds, from shops that let you demo boats, close to today have just as many ideas on how to make boats where you live or paddle, and want to see better, from shape, to outfitting and materials. The improvements in materials, and designs, then you’re problem is not ideas – it’s the money to develop also going to have to come to grips that you’ve been those ideas. paying far too little for your kayaks, and that this has almost destroyed the industry that provides the toys When you’re selling at kayak at a net 10% loss, you that we all need to do what we love so much. simply cannot justify throwing $100,000 at its development: a dozen prototypes, tested over a year, A QUANTUM SHIFT all over the world, by a half dozen paid team paddlers, There has to be a quantum shift in how paddlers think all travelling on your dime. about their kayak, and the value that they ascribe to it. The reason why designs are not evolving, is because It is simply not sustainable, or logical, to think that a consumers have not been willing to pay what a kayak kayak today should be less than half the price it was is worth. 20 years ago.
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