WHAT'S HAPPENING WITH THE HOT TUB SEGMENT, INDUSTRY ...

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2014 BRONZE INT’L AWARDS OF EXCELLENCE WINNERS NEW APSP CHAPTER REVENUE SHARING PROGRAM POOL & SPA ACCESSORIES GET TO KNOW JEFF FAUSETT 2015 WHAT’S HAPPENING WITH THE HOT TUB SEGMENT, INDUSTRY CONSOLIDATION AND INSURANCE COVERAGE The Trends Issue REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY REFLECTING SUCCESS

Transcript of WHAT'S HAPPENING WITH THE HOT TUB SEGMENT, INDUSTRY ...

Page 1: WHAT'S HAPPENING WITH THE HOT TUB SEGMENT, INDUSTRY ...

2014 BRONZE INT’L AWARDS OF EXCELLENCE WINNERS

NEW APSP CHAPTER REVENUE SHARING PROGRAM

POOL & SPA ACCESSORIES

GET TO KNOW JEFF FAUSETT

2015

WHAT’S HAPPENING WITH THE HOT TUB SEGMENT, INDUSTRY CONSOLIDATION AND INSURANCE COVERAGE

The Trends Issue

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

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Pentair Ad No. PE-14-442Full Page, 4 color processTrim Size: 9" X 10.875"Bleed Size: 9.25" X 11.125"AQ MagazineBlue Flame ThinkingGrand Rapids, Michigan 49504 USAJob No. PE-1929December 19, 2014

New SuperFlo® VS aNd SuperMax® VS puMpS oFFer the eNergy eFFicieNcy oF peNtair’S Variable Speed puMp techNology to a lot More cuStoMerS. Now that Pentair has combined the affordability and replacement ease of these innovative new pumps with energy savings up to 80%*, your opportunities for pool pump upgrades have increased enormously. Add in a real-time, 24-hour clock and an advanced digital keypad, and you’ll agree SuperFlo VS and SuperMax VS are the most versatile replacement pumps in their class. Learn how to pump up your sales at pentairpool.com.

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1AQtheMagazine.comOn the cover: Photo by Justin L’Heureux, courtesy of Bullfrog Spas.

GoldAPSP International Awards of

Excellence® Winner, 2014

Type of Entry: Residential concrete pools

Bird’s Eye ViewAlka Pool Construction, Ltd.

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Jutting out from a rock cliff, this pool—a portion of which is suspended more than 13 feet in mid-air—has a breathtaking

view of the valley below and the surrounding mountains. During construction, it was challenging to find a method of draining the pool for the winter. In the end, all pipes drain

into the surge tank located below the pool. Additionally, two-thirds of the pool water volume is stored in the cistern

below to be circulated during the winter months.

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View the stunning designs of all 2014 Awards of Excellence winners at AQtheMagazine.com.

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F E AT U R E S

AWARDS OF EXCELLENCE

Bronze WinnersView the stunning designs of the 2014 Bronze AOE recipients.

18FEATURE

Your Insurance InsiderWhat you need to know to be up-to-date on the latest insurance trends for pool and spa professionals.

11

Go online to AQtheMagazine.com to view photos of all of the 2014 International Awards of Excellence® recipients. Also, look for the 2014 Merit AOE winners to be featured in the upcoming Q2 2015 issue of AQ Magazine!

14BIG (FISH) BUSINESSThe pool, spa and hot tub industry has seen a growing number of mergers and acquisitions in the last few years. Five industry leaders weigh in on the impact of this consolidation.

D E PA R T M E N T S

WEB EXCLUSIVES

6 BRIEFING

Hot Tub Trends

25 REFRESHER

Sharing the Wealth

26 TOOLKIT

Pool & Spa Accessories

28 IMPACT

Shining Starfeaturing new APSP Chairman of the Board Jeff Fausett

VIDEO

2014 International Awards of Excellence® Winners

ARTICLE

Meet RWQ Committee Chair Dr. Stanley PickensVisit AQtheMagazine.com for these online exclusives and more.

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5AQtheMagazine.com

Ref

lect

ions

Rich Gottwald, President and CEO,

The Association of Pool & Spa Professionals

The cover of this magazine perfectly captures the essence of this issue: What’s on the horizon? We’re kicking off 2015

with our trends issue covering develop-ments in various industry segments, along with new programs, people and products. The New Year brings a sense of expectation and renewal, and know-ing what’s trending can help you plan and be more successful in 2015.

I hope you’ll join me in welcoming our neighbors to the north, the Pool & Hot Tub Council of Canada (PHTCC), with whom we announced an affiliation agreement in December. Working with PHTCC’s Executive Director, Robert Wood, we signed an historic agree-ment making a partnership to promote, advance and advocate the interests of the swimming pool, hot tub and spa industry across North America. We are a stronger industry by promoting membership, sharing resources and working cooperatively to invigorate consumer interest in our industry’s products. Membership in PHTCC goes hand in hand with membership in APSP, and we are excited about this opportunity. Both organizations will maximize promotional opportunities to strengthen brands and membership opportunities.

From a global perspective, it’s been over a year since the International Hot Tub Association joined with APSP. On page 6, you can see that the hot water segment of the industry is growing. That’s good news. We’re also working with Europeans to harmonize global safety standards for portable hot tubs, investing 15,000 euro over the next three years for this effort (see page 8).

We’re investing in the future of hot tubs in many different ways, and the positive industry trends are just one indicator of our commitment to this segment.

Another trend to note is APSP’s renewed commitment to our chapters. I am pleased to announce a revenue split of member dues between chapters and APSP (see page 25 for more details). Chapters will be rewarded financially for recruiting and retaining members, thereby increasing their funds to hold events on the local level. It’s a win-win situation and long overdue.

Finally, I would like to share some good news about AQ. This past fall, AQ Magazine won an Ozzie Award for best overall design in the Association/Busi-ness-to-Business Non Profit category. Folio’s Ozzie Design Awards program is the largest and most inclusive awards program of its kind in the publication industry. Over 300 judges narrowed the more than 2,800 entries received this year to a list of roughly 800 final-ists. The Folio annual awards program recognizes the very best in editorial and design. So while we recognize our 2014 International Awards of Excel-lence Bronze Winners in this issue, we also wanted to share another win for the team.

It seems winning is trending this year in the pool and hot tub industry. That’s a trend we all like to see, and it feels good. Enjoy it.

Sincerely,

Rich [email protected]

Trends on the Horizon

REFLECTING SUCCESS IN THE POOL AND SPA INDUSTRY

APS-016

APSP Quarterly Q1 2015 Volume 7, No. 1

The Association of Pool & Spa Professionals 2111 Eisenhower Avenue Alexandria, VA 22314 P: 703-838-0083 F: 703-549-0493E: [email protected]

APSP OFFICERS (2015) Chairman of the Board Jeffrey Fausett

Chairman-Elect Richard Garbee

Secretary/Treasurer Jack Manilla

AQ EDITORIAL STAFF APSP President and Chief Executive Officer Rich Gottwald

Director, Marketing and Communications Lisa Grepps

AQ Contributors Carvin DiGiovanni

PUBLISHED BY GLC P: 847-205-3000 glcdelivers.com

Managing Editor Kathleen Hagan

Art Director Elissa Chamberlain

Advertising Sales Arlington Publishers Jim Oestmann Tracey Aaron E: [email protected] P: 847-838-0500

AQ Magazine is the winner of a 2014 Ozzie Award by Folio Magazine.

Have a story to share? Email us at [email protected]

AQ (APSP Quarterly) is published four times a year for The Association of Pool & Spa Professionals.

Copyright © 2015 by The Association of Pool & Spa Professionals

All rights reserved and all commercial use of the contents prohibited except if expressly authorized in writing by the association.

Opinions expressed in this publication do not necessarily represent official positions or policies of APSP.

GLC

GLC�CUSTOM�PUBLISHING

GLC�CUSTOM�PUBLISHING

GLC

GLC CUSTOM�PUBLISHING

GLC�EDUCATION

GLC�EDUCATION

GLC EDUCATION

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1HOT TRENDS FOR HOT TUBS#Trending in the Hot Water Segment

APSP Quarterly Q1 20156

Bri

efin

g Industry stats and facts

As 2015 begins, hot tubs are making a comeback. Data from the Hot Tub Statistics Work Group reveals that the hot water segment of the pool and spa industry is grow-ing. “There are good vibes about hot tubs right now,” says Kristin Woiteshek, director of operations at Nordic Hot Tubs and leader of the Hot Tub Statistics Work Group. Here’s a look at four trending topics in the growing hot tub industry.

Water TreatmentsBob Lauter, president and CEO of Master Spas, reveals that he’s been seeing more advanced water treatment systems and the combining of water treatments—although he says the various manufacturers are going about it in different ways. “Some people use salt or minerals; we combine ozone and UV. There are different ways to go about it, but we’re all trying to make the spa as maintenance-free as possible.”

CHANGE IN RESIDENTIAL HOT TUB SALES (2004–2013)

5.6%

2004

-4.3%

2005

-6.0%

2006

-17.9%

2007

-20.1%

2008

-28.9%

2009

4.0%

2010

-4.9%

2011

-1.2%

2012

3.5%

2013

Change (%)

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Daring to Design Differently

Staying ConnectedAutomation and technology integration are becoming standard in more and more hot tub and swim spa models. Master Spas, for example, offers automation in all of its mod-els except for the very entry-level products, says Lauter. Taking technology integration to the next level, Master Spas created an app to be used with its Michael Phelps Signature Swim Spas called SwimNumber App (SNAPP). SNAPP allows users to create, customize and save workouts, and the app can automatically change the speed of the water current at pre-determined increments when the workout is in progress.

“ 20% of our swim spa leads converted as hot tubs.”

Bob Lauter, Master Spas

The Strength of Swim SpasOffering swim spas in addition to hot tubs can be a power-ful tool in a manufacturer’s belt. “Often, a customer will be drawn to the swim spa as a conversation starter, but then many dealers are able to transition that conversa-tion toward a hot tub purchase,” says Jim Johnston, vice president of marketing for Marquis.

A few hot tub manufacturers, including Marquis and Artesian Spas, are introducing new swim spa models in early 2015. Marquis just released its ATV-14, which is fabricated from layers of polymer resins. Artesian Spas’ new TitalFit PowerPlus relies on hydraulic propeller technology to power its integrated swim system.

Bullfrog Spas’ new STIL hot tub

Master Spas’ SwimNumber App (SNAPP)

Bullfrog Spas is standing out from the crowd with the introduction of its new STIL hot tub. While most hot tub designs are jam-packed with lines, curves, lights and other features, Bullfrog is trying a different approach with a more modern and minimalist look.

“Our objective was to create a product that is very modern in its design—very clean in terms of lines—that will look good in a home environment,” says Dan Sjoblom, director of marketing at Bullfrog Spas. “It is every bit as functional and comfortable as any other hot tub, but it’s far more pleasing to look at.”

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Amazing Soundanywhere, any weather

ME60BT BLUETOOTH WATERPROOF AMPLIFIER• Powers up to (8) 4ohm speakers• Internal distortion limiting circuits• Dedicated Subwoofer gain level control• External waterproof control pad included• Water resistant design for spa or marine use• Rear channels switchable from full range to powered sub out.

SB50G WATERPROOF SPEAKERPair the ME60BT amplifier with Poly-planar’s bluetooth, wireless waterproofSB50G wall speakers. The SB50G speakers feature 4 ohm impedance, fullfrequency audio range and are 35 watt RMS power rated. Their chemical resistant components allow spa or marine use and feature a choice of anoval or round grill that can be replaced from front side for easy service

Poly-planar Hanover, Maryland 410•761•4000 www.polyplanar.comVisit GLBPoolSpa.com or contact your GLB® Territory Sales Manager for more information on any of our GLB® products.

GLB®, the GLB logo, Oxy-Brite®, Algimycin® and The Great Life Begins Here® are registered trademarks of Arch Chemicals, Inc. GLB is a business of Arch Chemicals, Inc. ©2014 Arch Chemicals, Inc., now a part of Lonza. All rights reserved.

In th

e N

ews

A Global EffortAPSP/IHTA joins European Portable Hot Tub

Standards Harmonization Work GroupThe Association of Pool & Spa Professionals (APSP)/International Hot Tub Asso-ciation (IHTA) has joined the European Portable Hot Tub Standards Harmoniza-tion Work Group.

Spearheaded by the Brit-ish and Irish Spa and Hot Tub

Association (BISHTA) and DIN, the German institute for standard-

ization, the group has the mission of harmonizing global safety standards for portable hot tubs.

“APSP/IHTA has committed 15,000 euros for the next three years to assist in the standards process,” says APSP

President and CEO Rich Gottwald. “Global harmonization of portable hot tub standards is important to the future success of spa manufacturing and ultimately will increase consumer satisfaction with a consistent product.”

The working group met in Decem-ber 2014 in Berlin to discuss electrical product safety and water treatment.

For more information about the European Portable Hot Tub Standards Harmonization Work Group, contact Carvin DiGiovanni, APSP’s vice president, technical & standards, at [email protected].

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11AQtheMagazine.com

The insurance world is changing for pool and spa contractors. Here’s what you need to know to be

up-to-date with the latest trends.by Andrew Conner

Kno

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dge

Insurance Your

Insider

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APSP Quarterly Q1 201512

Trending TopicsWith so many regulations and products, it’s easy to be overwhelmed by the insurance landscape as a pool and spa contractor. According to Mark Lederer of CNA Insurance, here are a few current issues you need to be up to speed on if you’re in the industry:

� DRAINING. Lederer suggests that any contractor planning on draining a pool get a drain waiver to avoid liability for pools that pop out of the ground. “If you have enough groundwater and you drain the pool all the way down, it can pop out,” he says. “[Contractors] should look at what’s going on from a groundwater stand-point, and be aware of landscaping with irrigation systems as well.”

� POOL SAFETY. Beyond the Virginia Graeme Baker Act, which was passed to remedy problems with unsafe pool drains, general liability related to pool safety is an emerg-ing issue, and Lederer expects to see more and more claims arise in that area.

� SUBCONTRACTOR AGREEMENTS. “[Contractors] should have a good, solid, standard subcontractor agreement,” he says. “We always stress that you meet with a lawyer in your area that knows liability law for your area, and that the agreement should at the very least talk about what’s required from a safety and insurance standpoint.”

Kno

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L ast year, we took a look at the role professional liability plays in the pool and spa industry, and what

people in the industry should know to protect their businesses (“Les-sons in Liability,” Q3 2014). One of the key suggestions from that article was for pool and spa con-tractors to have the right liability insurance. However, that is more easily said than done. In this article, we explore not only what the right liability insurance is, but also other insurance issues of which pool and spa contractors should be aware.

Professional ProtectionWhile most pool and spa contrac-tors have likely been required to secure professional liability insur-ance at some point in their careers, the requirement can remain a point of frustration. Often, the insurance doesn’t cover their actual work on the project, and instead is simply another (costly) hoop to jump through before work begins.

Traditional professional liabil-ity insurance was created due to a need for general contractors to protect themselves from faulty design work performed by their subcontractors, says Mark Wilke, CRIS, underwriting consultant for contractor’s professional products at CNA Insurance.

“For a long time, professional liability was really only offered to contractors who were performing the design in-house, so it was geared toward a design-build house,” says Wilke. “[With the design-build concept] general contractors were trying to control their costs and be a one-stop shop. They would go out to another firm for engineering or design documents—that’s what the professional liability was built for.”

However, as the construction industry and the design-build con-cept evolved, project owners and general contractors began to seek more control over projects, which

meant requiring more cover-age for their subcontractors. This led to today’s situation in which pool and spa contractors often will be forced to secure professional liability insurance that covers design issues just to put in a bid on a job, when they have no actual design liability.

“I hear contractors saying, ‘It’s a sunk cost for me. I don’t perform design. I just go in and install something. I don’t pro-duce the [design] document, so I don’t have that exposure,’” says Wilke.

Some insurance companies, such as Wilke’s CNA Insurance, have heard this complaint from contractors and offer products that provide better protection. For example, CNA has a product called Contractor’s Errors & Omissions that covers not only faulty design work, but also faulty work-manship and defective material.

Visit AQtheMagazine.com to learn about the main liability threats facing the pool, spa and hot tub industry by reading “Lessons in Liability.”

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For contractors interested in more robust coverage, Wilke suggests they speak with their insurance agent and ask about CNA’s Contractor’s Errors & Omissions or products like it. “[Contractors] should tell their agents that they feel they have a need for a professional product, or they feel they have the exposure,” he says. “As we continue to market [our product], more and more agents will be aware of it and will be able to answer questions about it.

Injury IssuesWhile professional liability insurance can be an extremely important protection for pool and spa contractors, it’s not the only type of insurance that affects businesses in the industry. Other types of insurance that affect the pool, spa and hot tub industry include workers’ compensation, general liability, property and automobile. In particular, workers’ compensation insurance is a hot topic at the moment.

According to Mark Lederer, MS, CSP, risk control consul-tant for the Richmond branch of CNA Insurance, one of the biggest issues he sees for pool and spa contractors right now is the aging workforce and how that can increase workers’ compensation liability. “Typically, when older staff get hurt it costs more and takes a lot longer for them to be rehabilitated,” he says.

In order to minimize expenses on workers’ compensation, Lederer suggests always submitting claims quickly and bring-ing the injured worker back on in a reduced or lighter role as soon as possible, provided it is reasonable. “If they’re back at work, even on light duty, they’re not sitting at home where their morale goes down or they lawyer up, which gets real expensive really fast,” he says.

Another common workers’ compensation problem facing pool and spa contractors is when employees get injured carry-ing materials to and from a job. Lederer stressed efficiency as a way to avoid these types of injuries.

“We see a lot of claims that are trip-and-falls. It’s usually workers wandering from point A to point B, and they slip on the way,” he says. “With an aging workforce, these claims can drag on and on and get really expensive. You can solve this by educating workers so they’re thinking about what they do and how they do it on a granular level. If they’re not taking so many trips to the truck, they’re less likely to trip and fall.”

“ [Contractors] should have a good, solid, standard subcontractor agreement ... and that agreement should at the very least talk about what’s required from a safety and insurance standpoint.”

Mark Lederer, CNA Insurance

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Big Business

APSP Quarterly Q1 201514

Indu

stry

Insi

ghts

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A t the end of 2014, MAAX Spas Industries bought out L.A. Spas —both of them longtime manufacturers. It was just the latest in a spate of acquisitions that have taken place in the pool and spa industry during the last few years. (For a list of these transactions,

read the sidebar on page 16.)Although much of this recent consolidation has involved relatively small

companies, it does seem to indicate somewhat of a renewed trend—one that AQ wanted to learn more about. What is the story behind the ongoing consoli-dation? To find out, we recently interviewed five pool and spa industry veterans:

� JEFF FAUSETT, recently retired longtime president and CEO of Las Vegas-based buying group United Aqua Group, and new chairman of the board at The Association of Pool & Spa Professionals.

� DEBRA HAASE, president of manufacturer Cardinal Systems and its Quaker Plastics brand, located in Schuylkill Haven, Pennsylvania.

� GREG HOWARD, CEO of the buying group Carecraft, based in Carls-bad, California.

� DOUG LARSON, president of the Cover Products division of Latham Pool Products. Coverstar is located in Lindon, Utah.

� CHRIS ROBINSON, business manager of manufacturer Lucite Interna-tional in Cordova, Tennessee.

Here is what we learned:

What has been driving the consolidation in the last few years, a period when the worst of the recession was over and the industry started to bounce back? DEBRA HAASE: When the industry essentially crashed due to the deep economic recession, pool and spa business plummeted by 75 to 80 percent. While the industry has come back somewhat, we’re nowhere near where we were during the heyday. In the current environment, acquiring other companies is pretty much the only way to continue to grow your business and diversify your product line.

But the economy is getting better, so… HAASE: The economy may be coming back, but it is by no means stellar. In my view, the industry as a whole is oversupplied.

How has that had an impact on your specific industry segment?HAASE: There are no new manufacturers in the indus-try doing the same thing we do. But, for example, as far as our steel pool panel line goes, there are five exist-ing major players. At one time that was fine; there was plenty of business to go around. But since the down-turn, that’s not the case.

Have any other factors been at play? GREG HOWARD: We’ve had two back-to-back years of severe weather. People in the industry in the Midwest, Northeast and Eastern Seaboard say they haven’t seen weather quite this bad in a long time. That, of course, adversely impacts the number of pools being built—which, in turn, makes some companies in those areas weaker and potential targets for acquisition.

CHRIS ROBINSON: As far as the spa industry is con-cerned, another dynamic at play has been the general aging of the owners of spa businesses. Our industry really got going in the mid-1970s, so many of the small compa-nies that started back then have aging owners today. It’s time for them to plan for succession. Some do and some don’t; some do it well and some don’t. There certainly have been a number of successful generational transi-tions, but there also have been instances where the bet-ter choice would have been consolidation or sale, rather than passing the business on to a family member.

Has there been a consolidation of the spa industry similar to the one on the pool side?ROBINSON: Historically, there were always about 100 spa manufacturers in North America. The original consolidation probably was the purchase of Sundance by Jacuzzi back in the late ’90s, followed by the purchase

The story behind the ongoing consolidation within the pool,

spa and hot tub industryby Lenny Giteck

15AQtheMagazine.com

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Indu

stry

Insi

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Examples of Recent Mergers and Acquisitions

� MAAX Spas Industries bought out L.A. Spas in December 2014.

� Latham Pool Products acquired Pool Cover Specialists in October 2014. The company also acquired Plastimayd, LLC, a maker of vinyl liners and safety cov-ers, in December 2013. Three additional acquisitions in Latham’s fiberglass divi-sion were made between 2010 and 2012.

� Zodiac Pool Systems acquired SAVI Pool and Spa Lighting Products from NextStep in June 2014.

� Hayward acquired pool cleaner manufac-turer Poolvergnuegen in December 2013.

� S.R. Smith purchased Fiberstars in December 2013.

� KIK acquired BioLab in late 2013.

� Paramount Pool and Spa Systems purchased Trident Ultraviolet Corp, a UV sanitation products company, in 2013.

� Jacuzzi acquired Dimension One Spas in February 2013. It had previously pur-chased ThermoSpas Hot Tub Products in June 2012.

� Lonza acquired Arch Chemicals for $1.4 billion in October 2011.

of Caldera by Watkins—but during that period there were just one or two acquisitions at a time.

Then you had the recession. ... It convinced a number of people to close up shop, and others looked at the situation and said, “We see an opportunity here to buy distressed businesses.”

How many spa manufacturers are there today?ROBINSON: I would say there are roughly 50 left in the U.S. and Canada—half of what there once were.

What has been the effect of consolidation on the pool and spa industry’s workforce? Have many people lost their jobs? HAASE: If you look at the distribution side of the industry, they’ve cut staff in order to continue to compete. One result is that providing technical sup-port increasingly has fallen on the manufacturers’ shoulders. At Cardinal, we’ve actually added staff to our service department to handle builders’ inquiries and requests. Those things used to be funneled to our distribution base.

HOWARD: Generally speaking, when a larger company takes over a smaller one, they shake the little company to see what expenses they can eliminate. They may no longer need the acquired company’s accounting department, shipping department, managers, business software, and so forth. Obviously, they’re going to try to reduce the acquired company’s overhead. It’s pretty rare that someone buys a company and leaves it exactly as is.

DOUG LARSON: The other side of the story is this: Companies that grow rapidly through acquisitions also have to deal with the increased challenge of managing a bigger, more complex outfit, one that is selling a greater number of products or brands. It may sometimes be possible to reduce staffing in terms

“ The pool and spa industry is entering a phase of maturation, and some additional consolidation will come as a natural consequence of that.”

Chris Robinson, Lucite International

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of duplication of effort, but in other situations more people are required to support the business. Your costs can actually go up.

What other trends are having an impact on the number of employees needed in the industry?HOWARD: A lot of the significant companies in the industry have started manufacturing outside the U.S.—in Mexico and Asia, for example. This has had a greater impact on the industry’s labor force than acquisitions have.

With fewer companies competing, has consolidation affected R&D? In other words, do companies now feel less need to do research and develop new products? JEFF FAUSETT: The fact that there’s less competition may have a slight impact, but there are still a lot of pool and spa companies, and there’s still a push to constantly improve the technology. Big companies can put more money into technology research and product engineering. The consumer will be better off because pool and spa products become more efficient and have greater reliability. Of course, that improved technology is going to cost consumers a bit more.

What about pricing? Has the fact that there are fewer companies competing led to higher prices?HAASE: First of all, even though three huge players—Pentair, Hayward and Zodiac—have evolved, we’re hardly in a monopoly situation. As I said, the industry is oversupplied, and that has kept prices depressed.

Will we see more acquisitions in the future? FAUSETT: We likely will see another round of consolidation— but it won’t necessarily be only within the U.S. domestic market. It wouldn’t surprise me if some large company in, say, Taiwan, China or Indonesia, acquires one of the American “Big Three.” Asian countries have their own growing domestic market for pools and spas, but they haven’t developed the most cutting-edge technology—although they are copying some of it. Not only do they want to be in the U.S. market, they want access to technol-ogy they can take back to Asia and the Pacific Rim.

LARSON: One reason I see more consolidation coming is that we are now in a rebounding market, and in that kind of situation more existing players are willing and able to finance acquisitions. The same companies might not have been interested or in a position to do so when the economy was deep in recession.

Any cautionary advice regarding future acquisitions?ROBINSON: Consolidation usually happens as a business matures; the pool and spa industry is entering a phase of maturation, and some additional consolidation will come as a natural consequence of that. However, there’s no guarantee that consolidation will always be a surefire winner for strong companies that gobble up weaker ones. You can make some bad assumptions that lead to bad purchases. Also, the rules of the game can change after you’ve made your acquisition, so a certain amount of caution is always a good idea.

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NEPTUNE POOLS, INC. Sugar Hill, GA Residential concrete pools Pools with a vanishing edge – 601 sq. ft. or more

OCEAN QUEST POOLS BY LEW AKINS Belton, TX Residential concrete pools Geometric – 601 sq. ft. or more

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Page 23: WHAT'S HAPPENING WITH THE HOT TUB SEGMENT, INDUSTRY ...

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Page 26: WHAT'S HAPPENING WITH THE HOT TUB SEGMENT, INDUSTRY ...

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25AQtheMagazine.com

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The Association of Pool & Spa Professionals announced its new chapter revenue sharing program in November 2014 at the Interna-tional Pool | Spa | Patio Expo in Orlando.

Modeled after commission programs typically used by insurance companies to compensate their agents, APSP chapters now will be rewarded financially when they acquire new members and then subse-quently keep them engaged over the years.

“APSP chapters are a key source for new mem-bers, and our current members deliver a significant amount of value through their involvement with the chapters,” says Rich Gottwald, president and CEO of APSP. “In light of this, APSP wants to redesign its relationship with the chapters.”

It is the association’s hope that the chapter revenue sharing program will strengthen the APSP chap-ters by:

� increasing communication and cooperation between local chapters and the national APSP office;

� improving chapter finances in order to further APSP’s industry outreach;

� increasing chapter participation in member acquisition and retention;

� broadening APSP’s base of volunteers who serve as subject matter experts and strategic advisers; and

� strengthening APSP’s presence at the grassroots level to identify code and regulation issues and build relationships.

Sharing the Wealth

Years of Membership

Percentage to Chapter

Chapter Revenue APSP Revenue

Year 1 50% $293 $293

Year 2 40% $234 $351

Year 3 30% $176 $410

Year 4 20% $117 $468

Year 5 10% $59 $527

Year 6 10% $59 $527

Year 7 10% $59 $527

‘Lifetime’ 24.3% $995 $3,101

APSP to split member dues with chapters

starting in 2015

Revenue Sharing DetailsHow exactly does the program work? APSP receives $585 in dues from each new member, which is split 50/50 between the chapter and the national office for the first year of mem-bership. For each additional year of membership, the dues revenue will be split between

the chapter and APSP based on the number of years of mem-bership (up to seven years), as detailed in the chart below. Over the seven-year ‘lifetime’ of a member, the individual chapter will receive 24.3 percent ($995) of the recruited member’s dues, and APSP will receive 75.7 percent ($3,101). 

REVENUE SPLIT OF MEMBER DUES BETWEEN CHAPTERS AND APSP

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APSP Quarterly Q1 201526

Tool

kit

that has been collected from the lives that have been lost and the injuries that have occurred,” says Roberts. “You need to relay the message that the latest code require-ments—present in the ISPSC—protect people from [death and injury].”

However, if public officials do have specific questions about the technicalities of drain entrapment or barrier requirements, for example, you need to be prepared to answer them, Roberts says.

Additionally, pool and spa professionals should frame technical challenges as opportunities to have a discussion with the code inspector, McDonald says. “I think there is a very effective way to ask the question—not challenge any-body’s intelligence; not challenge the fact that I’m right and you’re wrong—but to ask the question, ‘I’m sorry, but I’m not familiar with that part of the code. Could you please tell me where that’s written or where I can look that up?’”

McDonald continues: “There are ways to do that without being confrontational. I think for the pool and spa profes-sional, the way to enhance your own individual develop-ment is by asking the question. You shouldn’t do something just because the inspector told you to do it; you should do it because now you understand why you need to do it. By virtue of understanding the intent behind the code, it makes it much more palatable to follow and implement.”

Be PersistentAs a building code official, McDonald initiated the conversation about adopting the pool and spa code in Amarillo. But that won’t be the case in all municipali-ties. If you’re a pool or spa contractor in a jurisdiction that is not considering adopting the new ISPSC, taking the first few steps may be challenging.

“It takes some perseverance and a positive attitude,” McDonald says. “Don’t take the first ‘no’ you hear as the gospel. If a contractor is looking to do the right thing or take a leadership role, he or she will be out on the front line and is going to take some shots.”

Taking the effort to adopt the ISPSC will be well worth it. It will foster stronger relationships among pool and spa professionals and building code officials, and it will also improve public health, welfare and safety. “Ultimately, the end user, who is the consumer, will be rewarded with a standard that is going to produce better construction and lead to a safer installation,” DiGiovanni says.

So what are you waiting for? Contact your local official today.

APSP is the leading source on standards and codes for the pool, spa and hot tub industry. Learn more about Standards and Tech-nical information by visiting APSP.org and click on “Standards.”

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The Pool StoolPool owners looking for a fun, nighttime underwater seat-ing option can consider The Pool Stool by ENVY Pool Products. The light-up stool model features a rechargeable and remote controlled LED light within the base, which illuminates the top of the stool. Using the remote, users are able to pause the LED light on their color of choice, set the light to flash and even adjust the brightness.

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A few personalized, practical and playful accessories for pools, spas and hot tubs

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Personalized

Meyco Pool Covers Custom AnchorsMeyco Pool Covers recently unveiled new custom-col-ored anchors for its pool safety covers. Now, dealers can send a hi-res digital swatch of a pool deck and Meyco will create custom anchors to match the color.

“We have a special color-match process that’s not much different than what your local paint store offers in terms of getting that perfect shade to match,” says Phil Saltzman, director of sales at Meyco Pool Covers. “We will completely match that color for customer satisfaction.”

It takes two to three weeks after receiving the digital swatch for Meyco to manufacture its custom anchors. For customers who don’t want to wait, Meyco has five colors that are always in stock: silver, blue, black, white and platinum.

Playful

S.R. Smith Diving PlatformsS.R. Smith has been in the busi-ness of making diving boards since 1932. Two of the company’s more recent boards, the FreeStyle™ and the HipHop™ (introduced in 2009), can be installed atop of S.R. Smith’s D-Lux™ or Cantilever stands to

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HipHop on Cantilever stand

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APSP Quarterly Q1 201528

Impa

ct

Shining Star

New APSP Chairman of the Board shares his industry experience

by Andrew Conner

One of APSP Chairman of the Board Jeff Fausett’s favorite things about the pool and spa industry is its size. Prior to joining United Aqua Group—then called Aquatech—in 1999, Fausett worked in the

aerospace industry for 19 years. There, he felt like one, tiny star in a large galaxy. In the pool and spa industry, Fausett’s star shines much brighter as the former president and CEO of United Aqua Group.

“It’s a small industry, so you get to know anyone that makes a significant contribution, which helps you enjoy the relation-ships that you form,” Fausett says. “It’s not so large that every-body is nameless or faceless. If you’ve got some talent, you can influence things, and that’s great. In the aerospace indus-try you may be bright and smart, but you’ll never be known. In this industry you can definitely have some influence, and it’s satisfying to know that you can contribute ideas and thoughts, and also be appreciated.”

Fausett says the most satisfying experience he had working in the pool, spa and hot tub industry was bringing United Aqua Group from its 50-member status in 1999 to its current membership of 290. “The growth of the company into a true professional organization has been exciting,” he says.

Travel is another part of profes-sional life that Fausett enjoyed. “The pool industry is still one of those industries that does leisure and incen-tive travel, so that’s fun to do with your colleagues—especially when you’re in these great locations around the world,” he says. “The [trip] that really sticks out [for me] is when we went as a group to New Zealand in 2006. We went bungee jumping. It was quite funny because everyone was skittish, and I was the only one who was willing to do it. [After I

went] all of a sudden everyone went. It was one of those trips you’ll never forget.”

Fausett is excited about his new role as Chairman of the APSP Board, as he has seen firsthand what APSP can provide for people with careers in the industry. “I got involved [with

the APSP Builder’s Council] just being a novice about construction and products, and I learned the industry from that per-spective,” he says. “It was a great educa-tion with great people. I think people who don’t see the value of APSP or any industry association usually don’t get involved, because once you do you real-ize there’s so much to do and be [within the association].”

While Fausett says he is still finalizing his plans for what he hopes to accomplish during his time as Chairman of the Board, he knows he wants to focus on passion and unity in APSP and in the industry. “We need more excitement for who we

are and what we do,” he says. “It’s a leisure industry and we’re happy [people]. So let’s be passionate and reflect that in ourselves and our work.”

Jeff Fausett gets into char-acter at UAG’s Gatsby Gala during the company’s 2014 annual conference.

New APSP Chairman of the Board Jeff Fausett enjoys a little R&R near a cliff.

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