The Antifouling paint market 2011-2015; numbers, trends and opportunities in the yacht industry.

It took our team almost 3 years of research to determine the trends and peculiarities of the antifouling market for yachts and pleasure crafts. It was not an easy task to separate the products on the market that would theoretically serve only commercial vessels (commercial/passenger ships and workboats) and those, instead, dedicated to yachts, super yachts and pleasure boats.

The antifouling market for yachts and pleasure boats has two, essentially distinguished, types of usage that show different market dynamics depending on the size range (<8m, <15m, <25m, >25m,)  of vessels one takes into account. The two macro types of usage relate to the size segments are:

1) The professional use done by shipyards and professional painting/coating companies working on both new vessels and used ones and

2) The DIY (do-it-yourself) non-professional use done by boat owners.

We have analysed that the breakdown of the above macro category can differ depending on the geographic area that is taken into consideration. For example there are more DIY customers in relation to the country’s overall fleet in France using antifouling products on vessels larger than 30 feet than there are in Italy. Whereas the number of shipyards that use antifouling and coating products for new vessels (before vessel 1st launch) larger than 25 meters is by margin greater in Italy than in France.

It’s very interesting to observe that markets that are very fragmented in the distribution towards the DYI customers such as Italy show less profitability for the manufacturers than other markets where the distribution is much more efficient. In our professional opinion the associated the fragmented distribution channels are high and obsolete making a very poor use of technology. On the specific topic of point of sale, we have surveyed directly over 3000 qualified responders (boat owners, yacht brokers, marine paint specialists, captains, hardware stores and others) in 12 different countries (France, Italy, UK, USA, Spain, Slovenia, Malta, Croatia, Netherlands, Turkey, and others), asking them “where they would mostly would like to find (a sample) antifouling products?” Right after the physical stores and ship chandlers which still accounted for 50% of the answers 20% stated that he/she would prefer to find the products Online on the producer’s website. In our view this is a sensitive sign of how the generational shift will influence the distribution dynamic and its overall impact on profitability on antifouling coatings and associated products.

Ultimately, the result of our survey show how the companies have a significant opportunity to increase profitability progressively shifting their distribution models and increasing progressively the use of e-commerce.

(Please contact us for further information or to request a consultation +44 7445 30 86 22)

Through our research we also analysed the dynamics that relate the end users (boaters) and the professional users (shipyards) to be more or less loyal to a certain brand (please contact us here for more info). In general terms we noticed that the smaller the size segment and the younger the boat owner the less brand loyalty he/she would show. Whereas, in the professional use, both the brand choice and the brand loyalty had a high correlation with the customer support and after sales reputation of the brand (and manufacturer).

From a data point of view we have segmented the market in two macro segments:

1) The “OEM” Market (the market generated by new built vessels)

2) The “Replace” Market (the market generated by the existing fleet in need of new antifouling coating as part of regular maintenance of the vessel)

The methodology: To accurately estimate this two markets we have built a complex algorithms to sub-segment they types of hulls and therefore estimate the amount of coating needed. Furthermore, we have used an adjustment factor for those vessels that do a new coat of antifouling paint every year and those that choose cycles of two years. Lastly, we have cross referenced the sales data in litres collected and estimated from direct research on the various players in the market  (Akzo Nobel, Jotun, Hempel, Boero Group,etc..) with the data built through the new and existing fleet of vessels.

Having collected and processed data form 2011 onwards with regards to the antifouling coating market for yachts and pleasure crafts,  we were able to calculate and compare the compounded annual growth rates (CAGR). Between 2011-2014 and forecasting 2015 in specific geographic areas we have analysed key markets such as Italy, France and other European countries and the U.S. and others.

In terms of estimated monetary value, the data emerging from our research showed us that markets that have a strong production of large yachts and super yachts (>15m and >25m) such as Italy (Antifouling coatings -6% CAGR 2011-15) were more affected by the reduction of new built than France (Antifouling coatings +1.3%  CAGR 2011-15). Instead, the “Replace” market for antifouling coating did not show such large difference between these two established yachting economies; Italy (Antifouling coatings +4.1% CAGR 2011-15) vs France (Antifouling coatings +6.5% CAGR 2011-15). 

Economic Value CAGR antifouling market

Please contact us for further information or to request a consultation +44 7445 30 86 22

 

Why is the Yacht Industry so backward on technology?

Yacht Technology

Hi-Tech Italian Yacht

One would think that an industry like the yacht industry where clients are Ultra High Net Worth individuals money is no object and that should reflect on pushing technology boundaries forward. Yet if you look at yachts of 2014, there is  a great deal of automation, interior design gimmicks like moving tv and wireless connected devices, but is there truly any game changing technology.

In my view the yacht industry should be what F1 is for the car industry, where new technologies get tested and then translated into widely available technologies. However, as we all know the yachting industry isn’t made of high R&D budgets and mass production of units and therefore this does not happen. On the other hand, one of the greatest business challenges of running a shipyard is securing business that is stable and ongoing which is not easy to do, simply because yachts are probably the ultimate luxury item and therefore marked as a non-urgent expense during periods of economic uncertainty.  As a consequence, some shipyards that can’t afford to rely on new builds alone, go heavily into the service industry extending their areas of operations to Yacht Charters, Yacht refits and after sale services, maintenance and repairs, which are let’s face it all hardly scalable business lines and merely a way to maximise revenue from existing assets and human resources.

What’s the solution then?  Technology is one and more broadly IP is another one.  If you look around you’ll notice that very few big brands in the yacht industry capitalise on their IP or even have any protected IP other than their brand.

Why there is so little valuable innovation and so little game changing technologies coming from the Yacht industry while there is so much coming from the aviation industry.

The initially-criticised Luca Bassani, founder of Wally Yachts who clearly had a background in another industry managed to make a mark in the yacht industry in much less time then most established brands have done, but why? Surely he had enough money to afford it but also had the courage to dare, to re-think things that were traditionally done in a certain way and to challenge and bend the rules enough to give his brand a unique identity in the industry. It’s also noteworthy that almost from the start the Wally brand was on sky equipment and other hi-tech products in different markets.

Yet that of Wally was a slightly different take on the industry but was it really game changing? No it wasn’t. The use of fiberglass is, hydrofoil technology is, as for tubeless tyres on cars and direct fuel ignition.

In brief the role of innovators in the yacht industry is really left to the power units, propulsion systems, electronics manufacturers, and chemical companies; in other words companies like MTU, Caterpiller, ZF, MAN, Raymarine, Akzo Nobel(aka International Yacht Paint) etc.. Whereas companies like Hamilton jet almost prefer not to look at the yacht industry as a whole and focus on commercial marine applications.  Main yacht manufacturing brands seem not to be motivated enough to invest in R&D to develop IP that can be employed in the industry and licensed into other industries providing for a sound and stable scalable economic growth. Why is that?

Leave us a comment we would be glad to take your point of view on the topic of innovation. Why do you think the Yacht Industry is so backward?

Wealth Trends and HNWI prospecting

Wealth Trends and HNW leads

Wealth trends and Tools for HNWI prospecting

 

The global recovery continues to show signs of weakness. Heightened Eurozone financial market and sovereign distress, stuttering recovery in the U.S. and slower than expected growth in major emerging market economies are the main drivers behind the IMF’s recent adjustment of its forecast for global growth downwards to 3.5% for 2012 and 3.9% for 2013. The two main assumptions that the forecast is founded upon are policy action in the Eurozone that allows financial conditions to ease gradually and recent monetary policy changes in emerging market economies gaining traction.

The continual recurrence of financial market distress leading to sovereign distress and bailout packages that provide temporary relief in the Eurozone heightens the potential for uncontrolled default and Euro exits. Both these scenarios will certainly have a severe impact on global economic growth prospects and wealth growth.

WEALTH TRENDS

Investment

UHNW investors are shifting their wealth into private companies, real estate and commodities.

Risk aversion is largely reflected in the shift away from speculative financial investments to hard assets.

Professionals and institutions engaging with UHNWIs should consider strategies and approaches that address the current concerns and focus of these clients.

Reduction in Tax Exposure

As governments around the world look to revive state finances through higher and stricter taxation regimes, UHNWIs look to reduce their tax exposure through a shift to territories with beneficial tax regimes. Professionals engaging with the ultra wealthy need to consider strategies that reduce tax exposure and address their clients’ concerns.

WEALTH CURRENTS

2012 at was  a year of shifting wealth currents, with the broad direction for wealth flows going eastwards. Eurozone UHNWIs, concerned over volatility and distress in sovereign and financial markets, have shifted wealth away from the periphery towards core economies with Germany and Switzerland as favored destinations on the Continent. Other beneficiaries include the United Kingdom, the US, Hong Kong and Singapore.

The shift in wealth growth to emerging economies poses a challenge for wealth management firms based in the U.S. and Europe, who need to convince clients of their long term viability. In contrast, finding and keeping talent in developing markets is a key success factor as wealth management firms need to invest in human capital to capitalize on the opportunities presented by the shift.

STATE OF WORLD’S UHNW POPULATION

  •       The global UHNW population stands at 187,380 with a combined wealth of US$25.8 trillion. Combined wealth attributable to this segment shrank by 1.8% from a year ago. The decrease was largely driven by the Eurozone crisis and a slowdown in emerging economies.
  •       Oceania saw the greatest growth in UHNW population, with an increase of 5.9%, largely driven by the continued growth of Australia.
  •       Asia, in contrast, saw the largest percentage reduction in UHNW population amongst the regions. The 2.1% reduction in UHNW population is a result of poor equity performance, particularly in Japan, China and India.
  •       Combined wealth loss was highest in Asia as Hong Kong, China and Japan led wealth loss across the region.
  •       The U.S. leads in terms of real growth in UHNW population numbers, with 2,250 UHNWIs joining the ranks of the ultra wealthy. The combined total wealth of the U.S. UHNW population expanded by US$ 265 billion.

For more information or to receive a copy of our complete Wealth Report or our most recent Yachting Industry Market Analysis please contact us Market@RodriquezConsulting.com

If you are looking for new tools to network with High Net Worth Individuals and generate prospects in this difficult target group you might want to request a free trial of Wealth Monitor by clicking here  or on the logo below

 

Wealth Monitor HNWI leads

Wealth Monitor is a tool for soucing new HNWI Clients

 

Mailchimp and the importance of emails

I cannot deny to be a big fan of digital marketing and a fond believer that communication and marketing is largely underestimated in the marine and yachting industry. It is often the case in fact that you go at a boat show see a magnificent product, let’s say, a hand made mahogany wood sail boat, you know one of those vessels that really gives you an idea of hard work, passion for the job, incredible technical skills and countless hours with the utmost attention to details, but then you go have a look at their brochure, or and their website and you think…if only this product was presented better.

I do understand that oftentimes the team of people behind a great vessel has its core skills concentrate on the technical aspects of yacht building and virtually none in the communication and marketing area, which tends to penalise their business resulting in lower on non-existing sales.

Furthermore, boats are non-impulsive purchase decisions even if the prospective customer has the cash in hand, simply because buying a boat requires planning things such as docking space getting the wife to agree and plenty of other elements. So what is the best way to stay in touch with that prospect that has visited the boat at a recent boat show for example. Some might argue that social media will do but it’s arguably not the always the case within a older age group of prospective customers or with customers that conduct particularly busy lives.  However, there is one piece of marketing that is inexpensive and that you prospective customers regardless of their age on how busy they are will always see. That piece of your marketing is EMAILS, yes ! the good old emails which are now on everybody’s phone, ipads and at times gets read even more than once (especially if someone has more devices where he/she reads emails from)

Emails are as old as the internet in fact arguably older than the web itself but they are still extremely effective and also constitute long-term value in a company as all prospects that don’t buy today might be buying in the future, and that’s particularly true for boats as they are very often regarded as a very time-intense hobby or an entry in the retirement.

Emails nowadays are not only a form of communication but can be an incentive to generate interaction with other digital assets and non digital occurences  such as videos, websites, events, surveys and much more.

They are a way to get to know your audience with time and understand their preferences their habits gathering a plethora of valuable information that will help your business and company refine its marketing and sales strategy.

I have personally tried a variety of tools for email marketing but I have to admit the very best of all is


Mailchimp LOGO

Mailchimp Logo


MAILCHIMP. It must not be a case as over. 1.5 million businesses are using it every day, and their servers channel through over 1 BILLION emails every day. As you might expect this gives Mailchimp and as a consequence all its users a substantial source of data on how to best build your email. Indeed, MAILCHIMP allows you to test your audience inbox for spam filters, test visualisation on multiple devices, choose the best subject line to for your emails to get more opens or clicks and if you have a very international audience it even allows you to send the emails at a scheduled time that takes into account the time zone of the recipient.

In brief MAILCHIMP is a great tool, it helps you even test which subject line will produce  the most emails opened or clicks  with an A/B split campaign

You don’t need to believe me  you can try it it’s free just click here or on the logo above.

 

A:B Split Mailchimp

 

The one feature I like the most about Mailchimp is  that it constantly gives you the opportunity to improve by having an industry and list average for open rate and click rate so each campaign you make can be compared to the industry average which is preselected by you and the list average (only if you have done another campaign on the same contact list) See snapshot above of a campaign we ran for a client

Mailchimp HOURLIE.001

If you would like to do a 1 day training session for you or for your team on how to make the most out of email marketing you are more than welcome to contact us.  

Monaco Yacht show 2014 first impression

We just got back from Monaco Yacht Show 2014 and our first impressions were rather positive considering the general optimism that we noticed while speaking with a number of yacht builders, yacht owners, yacht brokers, designers and component manufacturer. Boero Group export and marketing manager who was attending the show at the Boero Yacht Coatings boot told us Monaco usually doesn’t fall back on expectations and that his first impression was positive. Luciano Bregola CEO of Isa Yachts was confident about future orders and the MTU sales team was very busy with a series of meetings with existing clients and prospective ones. It seems that the Italian builder are getting busier than they were expecting.  As one would expect a few companies that were exhibitors in the previous years were not present at the show, some had reduced their presence however, some others were there ready to do business with the usual enthusiasm and refreshed brands such as that of ISA Yachts that has undertaken a minor re-branding. The first thing we noticed, however, is that the organisers of MYS 2014 have decided to raise the price of tickets to 150 euros per day and 500 for a multi-day pass, which in fairness we believe it is a good move in order to discourage visitors whose pockets and interest are not strong enough to pay this price to visit the show. We all know large yacht owners, brokers and yacht builder don’t quite like their vessels to be too crowded with non-potential customers also due to the extensive time it takes to visit such large vessels so thumbs up for MYS 2014 edition.

On the other hand of the ticket price increase which for the record more than doubled compared to the previous 60 euro price, all exhibitors had plenty of free invitations to invite their prospects, media professionals and other types of interested parties which made it easy for all of us in the industry to invite the right audience to the show.

The show ground was also extended thanks to the the new Yacht Club de Monaco area with its impressive structure in the north part of Port Hercule that also gave much more useful space for exhibitors needing water space and logistic support.

We also noticed a slight reduction in the number of Yacht Magazines which we believe is an appropriate market adjustment considering the lowered marketing budgets most companies say to have this upcoming years.

This 2014 edition of Monaco Yacht Show at first glance seemed to be a positive and optimistic one from a sales point of view, however, we will get back on the specific topic with more updates after exhibitors have settled the show frenzy and will talk to us regarding the real output of the show in terms of business. Don’t forget to sign up to our newsletter to receive updates

From a marketing point of view we were pleasently surprised by a number of interesting techniques to move visitors on the show ground such as Edminston’s Gelato invitations served by the now famous team of red-dressed models, the traditional Feadship panama hats distributed for free to visitors,

Azimut-Benetti group new London office

Azimut Magellano 43 ADV at Shouthampton Boat Show 2014

Azimut Magellano 43 ADV at Shouthampton Boat Show 2014

“The best boat for british people has been designed in Italy ” this is the daring advertising slogan which displays below the new Magellano 43 exhibited at the PSP Southampton Boat Show  2014. The Azimut-Benetti group is making a move to tackle the british market. Our contacts at Azimut-Benetti group have made it clear that they are here to stay which means that the yacht manufacturing group is not only interested in the city of London foreign and local money but they are targeting the whole of the UK market, which, we believe, is a rather different more established type of marine market.  The choice of bringing the Magellano line here at the Southampton boat show makes it very clear per se, instead of showcasing the faster yachts more suitable for city boys or the young and wealthy London HNWIs, the Magellano is a yacht for a sophisticated mariner that want to enjoy his yacht all year, long range and if need be face the rough seas.

Other than just participating with a the factory team at Southampton boat show 2014, Azimut-Benetti exclusive Monaco and France dealer is in the process of opening a sales office here in London, with a prestigious address as one might expect in Mayfair’s Hannover Square.

We talked with the lovely  Elisabeth Curro, who has been heading the Monaco office of P.B. Yachting Monaco, who will be running the exclusive dealer for Azimut-Benetti in London. Elisabeth sounded confident on the market potential of the city and the country for the Azimut-Benetti brands.  We look forward to attend the opening of this new sales office.

At Rodriquez Consulting we believe there is certainly an interesting market opportunity for this established yacht manufacturer to grow in the UK market and in the growing city market of London which is one of the largest city economies in the world. London is indeed the first or the second home for many  “ultra high net worth individuals” – those with $30m (£21m) or more in assets apart from their main home – number 167,669, according to a report from estate agents Knight Frank – up 59% over the past decade.

Roughly equal to the population of the London borough of Kensington and Chelsea – and many of them do indeed have a place there – they control more than $20 trillion in assets – more than the national output of the US and Germany put together.

London, is, not surprisingly,  home to more UHNWIs (4,224) than any other city in 2013 and this will still be the case a decade later, with nearly 5,000 expected to be living here.

For more information about the city economics and how to penetrate this target niche please contact us. 

Bill Gates charters Fincantieri built Yacht “Serene”

Summer 2014 Microsoft founder Bill Gates goes on vacation with his family as a billionaire of his calibre should.

The NY Daily News captured some images of Microsoft tycoon aboard “The Serene,” a $330 million dollar yacht that according to the newspaper Gates and his family are renting for $5 million per week. To us this value sounds like wrong information as the Serene is listed at prices that are well below 2.5$ million per week [2.2 $ to be exact]

M/Y Serene is a Fincantieri built 133 meter yacht designed by Espen Oeino and launched in 2011. With a cruise speed of 15 knots and top speed around 20 knots The Serene has the following interesting interior features which we assume were appealing to Mr Gates as a discerning client

  • Indoor climbing wall
  • Dedicated children’s playroom
  • Two helicopter landing pads
  • Fully-equipped health spa and beach club
  • Multiple swimming pools [saltwater]
  • Underwater viewing room
  • Full conference room

Gates as you might imagine doesn’t own “The Serene.” He’s chartering it from Stolichnaya vodka distributor Yuri Scheffler. The Russia-born Scheffler is an interesting figure himself, who became famous for battling with Russian President Vladimir Putin over Putin’s attempt to nationalize and “redistribute” Stolichnaya’s wealth.

Though he does not own a yacht himself, Gates seems to be a fan of them. In 1994, he was married about a yacht belonging to his fellow Microsoft co-founder Paul Allen. Allen famous Octopus was built a few years ago with an approximate budget of $200 million by German builder Lurssen Yachts.

Even if Gates doesn’t own his own yacht, although he clearly could, a clear sign of how the most solid representative of the U-HNWI group is often opting for chartering rather than yacht owning.

According to the Daily News, Bill Gates and his family regularly make use of the Serene’s on board helicopter to travel for tennis matches at the “billionaire’s playground” nearby Porto Cervo in Sardenia, while the boat is stationed off the coast. And like Allen’s yacht, the Serene also comes with its own submarine, which in the amenities and toy categories is slowly increasing in popularity.

Super Yacht Market Study 2014

After Cannes boat show while just approaching from the Monaco Yacht Show 2014 the RC team is matching the Super Yacht Market Study 2014 forecasts with industry experts and shipyard owners and managers opinion together while cross matching Yacht launches with the yacht registries around the world for yachts over 80 feet.

The industry is no longer shy to attack new emerging markets and areas where we have identified the highest growth in wealth in terms of volume and in terms of number of HNWI (high net worth individuals) and billionaires.

In order to give more support to our clients we have added the following elements to our Super Yacht Market Study for 2014 and cross matched our forecasts with a variaty of sources in order to assure maximum reliability.

Furthermore, after several custom requests we have also elaborated specific drill-in on products like antifouling paints and many other specific components that are fundamental in for the life of a vessel.

Here are some elements extracted from the latest version:

Power Super Yacht evolution backlog by length

Power Super Yacht evolution backlog by product type

Power Super Yacht evolution backlog for construction materials

Sail Super Yacht evolution backlog by length

Sail Super Yacht evolution backlog for construction materials

Evolution of the Super Yacht Market Volume

Super Yacht Market Evolution cathergorized by business macro segments

Power Super Yacht Market Evolution by length

Power Super Yacht Market Evolution by product type

Sail Super Yacht Market Evolution by length

Super Yacht Market Evolution for main geographical areas

New Deliveries Evolution vs. Destock and pre-owned Market

Evolution of the Market Value of Super Yachts

Identifying the drivers of the market for Super Yachts

Trend number of HNWI by geographical areas

HNWI population Evolution 2005-14

HNWI wealth Trend by geographical areas

HNWI wealth Evolution 2005-14

Population Ranking HNWI for geographical areas

HNWI wealth Breakdown

HNWI allocation “Investments of Passion”/Vanity Investments

HNWI population age distribution

HNWI Population Sex allocation

Sizing the number of Billionaires by Macro geographical areas (2012-13-14)

Top 10 Countries in terms of number of Billionaires (2012-13-14)

Top 10 Countries in terms of average growth in the number of Billionaires (2013-14)

Market Evolution for Marine and Luxury products vs. No. of HNWI’s And Billionaires

Correlation analysis of the Market with business drivers

Super Yacht Market Forecasts

Power Super Yacht Market Forecast

Sail Super Yacht Market Forecast

Super Yacht Market Forecast classified by geographical areas

Abu Dhabi Yacht Show – 1st edition –

Rodriquez Consulting Ltd advised and planned the participation of one of the few Italian SuperYacht builders (currently a corporate client) at the 1st Abu Dhabi Yacht Show. Few of the major competitors believed in ADYS and for those exhibitors who did, or were rightly advised to, the results were significant.

The choice to skip Dubai International Boat Show, which suffered a bit more from the credit crunch, and focus instead on the Invitation Only- over 100ft- ADYS ‘09 was risky but overall a positive one.

The quality rather than quantity of visitors was solid, mainly Sheiks from different royal families including the Crown Prince of Abu Dhabi, who thanks to a selective environment was able to comfortably stop by most exhibitors stands and appreciate the details of such complex vessels. Furthermore, an interesting participation of HNWIs (high net worth inviduals) from India was also noteworthy.

The numbers are there, Abu Dhabi is indeed backed up by its 625 billion USD Sovereign Wealth Fund (3 times the Russian and 2 times the Norwegian one), which helped quite substantially to put together a great 1st edition with help from the well-established Informa Group owner of Monaco Yacht Show, and the powerful Abu Dhabi Tourism Authority.

ADYS ‘09 can take pride from the presence of well-known Superyachts such as “Silver” “WallyPower 118?”, “Lauren L”, “Dubawi” etc..

For more info on RC services and strategic business development: info@RodriquezConsulting.com

Date: March 27, 2009

Brazil’s Economic Growth and the Maritime Sector

With natural attractive conditions conditions for the marine industry, Brazil had 2 main factors that bounded the develop of the sector until 2007: the tax system and the lack of appropriate infrastructure. Following the approval of the plan to accelerate internal growth, new policies that benefits private investors reducing taxation and bureaucratic barriers are being implemented. Also the country infrastructure is being reinforced with actions in logistic, energy and social or urban structures. Roads and rail system are being drastically implemented, in an effort to connect the inside country with the natural ports and harbors on the coast. This effort is related mainly to the necessity of connecting the yields to the shipping facility, however creates a world of opportunities to explore the brazilian abundance in mineral, including hydrocarbons for the Yacht industry. The high costs of transportation will be slashed, and opportunities in the Yacht

construction industry will become even more attractive in the end of the implementation. Adding to the scene the new Pre-salt oil reserves, the commitment with social development, sustainability, qualified work force and the potential of the maritime tourism, Brazil is a market aiming to receive new investments and ready to repay with real opportunities.

written by Ana Biavatti for Rodriquez Consulting Ltd

Date: December 22, 2008