Catch the Waves on the Growing $10B+ Powerboat Business

<em>Source: National Marine Manufacturing Association (NMMA)</em>

The Signal: OneWater -- a premium boat retailer with 63 stores in the US and 2019 revenue of $768m -- recently filed its pre-IPO S-1 forms and officially went public on February 11.

Per the filing, OneWater serves “customers whose boating preferences span from general recreation and cruising to fresh and saltwater fishing to watersports, including wakeboarding and wake surfing.”

The firm is going to the public markets with compelling industry growth numbers (2018 latest info):

• In 2018, the consumer spend on boats, engines, services, parts, and related purchases reached ~$42B, a compound annual growth rate (CAGR) of 5% from 2010
• Within these sales, powerboat sales reached ~$11B in 2018, a CAGR of 13% from 2010; looking at powerboat units, the number sold in 2018 reached 207k (a CAGR of 5% from 2010)

What’s interesting about the high-end boat market is that it’s highly fragmented. Despite its relatively large boat retail footprint, OneWater only accounts for 2% of the 4k boats nationwide. 

The Opportunity: The industry’s growth and fragmentation provide some interesting points of entry:

1. Selling new powerboats: As highlighted by OneWater, the major US markets for high-end boat retail include Texas, Florida, Alabama, North Carolina, Georgia, Ohio, and New York. For those looking to get involved, notable boat manufacturers to reach out to are: Malibu, Pursuit, Seafox, Yamaha, Harris, Bennington, Chris Craft, Cobalt Boats.
   
2. Pre-owned powerboats: According to OneWater, the upgrade cycles for high-end boats are shortening as manufacturers introduce more bells and whistles. This dynamic creates an active boat resale market. In fact, the number of pre-owned units sold annually is 4x that of new units (>800k in 2018). A good resource for this market is www.boattrader.com, the #1 marketplace for boat resale in America.
   
3. Boat Accessories
   A much less capital-intensive way to dabble in the high-end boat market is by selling boat accessories. Top-selling boat accessories and equipment on Amazon include: air horns, paracords, life jackets, floating dry bags, and first-aid kits.