June 24, 2018
Business Latest News | Poll Questions | Border Patrol | Energy Scam | Toxic Moths

Old Town Canoe rises with the tide of renewal

By Whit Richardson, BDN Staff

OLD TOWN, Maine — The low hum of machinery, heat from the ovens, and the hollow echo of a large, enclosed space meet visitors to Old Town Canoe’s manufacturing floor.

Between 175 and 225 people work at the four-year-old facility on Gilman Falls Avenue depending on the season. They work three shifts during the week, churning out as many as 100,000 canoes and kayaks a year, according to David Hadden, the company’s brand director.

From its first canoe built in 1898, the 115-year-old company, which is now owned by Racine, Wis.-based Johnson Outdoors, has evolved over the years, maneuvering some tough streams and rivers.

For starters, the company once known as the largest canoe manufacturer in the world doesn’t produce as many canoes as it once did.

“Canoes are sort of dying,” said Matt Cote, the company’s production manager, on a recent afternoon as he watched two employees pull the hull of a green canoe out of a machine that heats, stamps and molds multi-layered plastic into the classic canoe shape.

These days, 80 percent of the boats the facility churns out are kayaks, which Old Town Canoe began manufacturing in 1940.

That ability to evolve and adapt to changing pressures is the secret to the company’s longevity in what’s become a very competitive market.

“For any outdoor consumer products company to stay abreast, they have to be refreshing their designs, refreshing their work, annually,” said Bob McDonough, a 23-year industry veteran who in January moved his family from South Carolina to Bangor to join Johnson Outdoors in Old Town as its director of research and development. “That’s what we’re trying to do.”

The total “paddlesports” sector, which encompasses canoes, kayaks, stand-up paddleboards (called SUPs) and rafts, posted $214 million in sales in 2012, according to Leisure Trends Group, a Boulder, Colo.-based research firm that tracks several outdoor sports markets. According to the data, there were 96 brands of canoes, kayaks, SUPs and rafts sold in 2012.

Johnson Outdoors’ “watercraft” division, which is based in Old Town, posted $13.7 million in net sales in the quarter that ended March 30, according to the company’s financials.

Old Town Canoe is “one of the largest and most venerable brands” in the market, said Scott Jaeger, senior retail analyst for Leisure Trends Group. “They’ve been around a long time.”

Andrew Collins, an Old Town native and 15-year veteran employee of the company, said he takes pride in knowing the Old Town name can be found all over the world.

“When you see people from other areas, they ask you about it,” Collins said. “It makes you feel proud to be putting out a good product.”

But the story isn’t just about the Old Town brand anymore. The employees who work in Old Town manufacture much more than that.

People all over the world are using kayaks and stand-up paddleboards manufactured in Old Town, but sold under the Necky Kayaks and Ocean Kayak brands.

“For the economy being bad, we’ve had good growth and people are still putting money into our company,” said Collins, taking a break from trimming the edges of a bright orange kayak. “It makes you feel good that they’re investing in people here.”

Despite the feel-good sentiment, it wasn’t always a sure thing that Old Town Canoe would stay in Old Town.

Johnson Outdoors acquired Old Town Canoe in 1974. As the story goes, Sam Johnson bought the business from Dean Gray in a deal “sealed with a handshake,” according to Cynthia Georgeson, vice president of communications for Johnson Outdoors.

For many years, Old Town Canoe continued manufacturing its canoes and kayaks in its Middle Street factory in Old Town. The company vacated this building in 2009 and sold it to the city for a $1 in 2011. The city plans to demolish the structure and redevelop the land, possibly as a new headquarters for the James W. Sewall Co.

Meanwhile, Johnson Outdoors acquired its other brands, Necky Kayaks and Ocean Kayak, and manufactured them in Ferndale, Wash. It also moved marketing and research and development operations to Washington.

Having a continent between research and development and the Old Town manufacturing facility created a “disconnect” that slowed innovation, according to Luke LaBree, Johnson Outdoors’ marketing manager in Old Town.

A consolidation was planned.

When an out-of-state corporation owns a Maine company and uses the word “consolidation,” it often ends badly for the state and local employees.

Johnson Outdoors considered closing shop in Old Town and consolidating in Washington, but ultimately decided to go the opposite route.

“It could have gone either way,” Cote said.

Georgeson said the company chose Old Town “as the watercraft hub of operations due to its depth of manufacturing capability and capacity for efficient expansion.”

The incentive package offered by the city, who didn’t want to lose its third-largest employer, didn’t hurt either.

“The city worked at that time with state officials to create an incentive package to try to entice them to expand here in Maine rather than the West Coast,” Bill Mayo, Old Town’s town manager, told the Bangor Daily News.

At the time, Johnson Outdoors received a $694,000 interest-free loan from the city to help cover the consolidation costs, a $200,000 Community Development Block Grant that helped pay for a new “rock ’n’ roll” oven to produce plastic kayaks, and a tax-increment financing deal that returned nearly $123,000 in property taxes to the company in the last fiscal year, according to the city’s tax assessor’s office.

“I think it was a good decision,” said Mayo, who was assistant town manager at the time.

Johnson Outdoors’ consolidation of its paddlesport operations in Old Town created roughly 50 new jobs in the city and wasn’t completed until the end of 2012, when the marketing and R&D operations finally moved cross country from Washington.

Noteworthy new hires include McDonough as the director of R&D. McDonough was lured away from one of Johnson Outdoors’ main competitors, South Carolina-based Confluence Kayaks. He moved to Bangor with his family in January.

“He’s the best in the industry as far as a lot of people are concerned,” Cote said.

McDonough said he was attracted to Old Town because of the “great opportunity” to work for a company with such a long and storied heritage. He’s only worked for the company for six months, but the stories of Old Town canoes being built in the log-driving days of the late 19th century already roll off his tongue as if he’s worked at the company for years.

McDonough didn’t come alone. In March, Geoff Bergmark, who worked under McDonough at Confluence, arrived in Old Town to become the lead mechanical design engineer.

“There’s a lot of heritage in this company,” said Bergmark, who’s 33. “I feel like more of a steward. I don’t want to be the guy who messes it up.”

Bergmark lives in Bangor now and so far is enjoying Maine, especially given his job. “We make toys,” he said. “I make stuff I want to use, which is rare.”

While making a high-profile hire like McDonough is a sign of the company’s dedication to innovation, the company puts that innovation on display on Monday when it releases the first Old Town kayak designed exclusively for fishermen. The Predator, as it’s called, is camouflaged and “is easily the market-leading design right now,” McDonough said.

The market for fishing kayaks has exploded over the last few years. Between 2010 and 2012, retail sales for fishing kayaks increased 135 percent, from $15 million to $36 million, according to the Leisure Trends Group.

“This fishing kayak is a big statement,” said McDonough. “It says Old Town is here for the long haul and is making fishing a primary category.”

Innovation is a constant race, one Old Town doesn’t intend on losing. McDonough and his team are currently working on a design of a new boat — details of which aren’t being released — that is going “to knock people’s socks off,” LaBree said. “It’s really going to turn some heads.”

While the company looks ahead, it hasn’t lost sight of its origins. Old Town Canoe still sells wooden canoes, though only five or so a year, according to Cote. They are, after all, the most expensive to build and retail for more than $7,000 a piece. Because of the low demand, the company outsources their construction to an artisan in Dover-Foxcroft who makes them by hand.

Like the newest, sleekest boat design coming out of McDonough’s shop, a classic wooden Old Town canoe can still turn heads.

Have feedback? Want to know more? Send us ideas for follow-up stories.

You may also like