Jackson Kayak, founded by Eric “EJ” Jackson (photo - right) in 2003, has tripled its workforce in the past 18 months, and the company’s sales for this year are up 70 percent. We were curious about what’s fueling the recent success and growth, so we caught up with Joe Pulliam (photo - below), the founder of Dagger, who began working full time for Jackson Kayak (www.jacksonkayak.com) a year ago and now claims the title “head coach.”
SNEWS: How did you get hooked up with Jackson Kayak?
Joe Pulliam: Eric Jackson and I have known each other for 25 years and have talked about the business and the marketplace, even when we competed. When I was doing consulting for a dozen different paddlesports entities, I decided to just go visit him one day, and I was surprised at how developed some parts of their business were, but other parts were lacking. Two years ago, I started working with them, and about a year ago we were at a point where it made sense for me to just work with them.
SNEWS: What elements of the business were well developed, and what needed to be improved?
JP: I was pretty shocked that they had a 92,000-square-foot facility. That’s pretty sizable for a relatively small brand, and it’s as much as we ever had at Dagger. But, when I first started helping them, the only thing they did from a production standpoint was assemble the boats. Everything came in ready to put together. They bought the hulls from one place, and bought walls that were pre-cut.
SNEWS: How has the company grown in the past 18 months?
JP: Now, it’s very vertical. We have four rotomolding ovens running now. To go from having all your molding and thermoformed parts outsourced to having everything done in-house is pretty significant. The size of the company has also grown significantly. We peaked this year at about 140 employees -- virtually all are full time. Two years ago, when I first got involved, there were maybe 40.
One thing people don’t realize is how many people on the team have a lot of really good industry experience. John Shepherd, who founded Wilderness Systems with Andy Zimmerman, has primarily been in charge of our plant layout. We have Dave Olson, who was the CFO at Confluence, and we have Joe Walton, who has been as prolific and successful a designer as there’s been in this business. We have all these people who have been through this before.
SNEWS: What sparked the company to become a more vertical operation?
JP: That was the direction we had to go to reach reasonable and sustainable profit levels. Also, when you’re dealing with an outside vendor, you’re dependent on them for quality and the ability to deliver in a timely manner. The higher up the ladder in terms of your product you get, the better you can control all those aspects.
SNEWS: How well has the company handled the transition?
JP: That transformation has not been without its pains. We were not as good on delivery this year as we should have been. Two of the rotomolding ovens have only been up and running in the last two months, so they didn’t help us as much this season as we needed. We got a lot more boats out the door than we had before, but we dropped the ball more than I would have liked. We also didn’t anticipate the growth we had. In 2009, sales were basically flat, but this year we’re up somewhere in the 70 percent range, and for a 7-year-old company that’s not what you plan on. If you’re a 2-year-old company, it’s not that unusual.
SNEWS: What has contributed to the sales growth?
JP: The whitewater market -- where we’ve been strongest -- hasn’t been healthy in a number of years, but we’re obviously taking a lot of share there, because that’s where the biggest growth is coming from. A lot of it has to do with reception to the products -- that’s always really important -- and the reception has been really good this year. We had three new series of boats for 2010 -- the Villain, Star and Fun -- and all have been very well-received in the marketplace. Also, growth on the non-whitewater side, percentage-wise, is through the roof. We’re looking at triple-digit growth there. The Journey, our new touring boat, now has a second size available, and that’s doing extremely well.
We also developed the Riviera and Regal models for the outfitter market, and those have done very well. We’ve embraced that market, and instead of trying to sell them de-tuned versions of our other existing boats, we’ve developed boats with that market primarily in mind, and that has been well-received. We came up with simple, low-cost products that are easy to use, and we can still make money on them.
I think another reason we’ve done well is that a lot of what Jackson has preached long before I got involved is paying off. We’re trying to really help the retailers make money on our product. We stumbled a bit this year because of too many SKUs and not delivering as well as we should have, but dealers are so behind us because of our protective territories.
SNEWS: Explain the company’s pricing and distribution strategy.
JP: We don’t have a big pre-season program, so retailers don’t have to load up in the fall to get delivery and reasonable margins on product throughout the rest of the year. This way they don’t end up discounting or not being able to pay for a lot of product.
We also have protected territories, and there’s one set distance -- we won’t open up somebody else within a set number of miles of you, unless we work something out beforehand. The distance is greater on the whitewater side than the rec and touring lines, where we have separate distribution. Dealers are really into that, and we get a lot of preferential placing and treatment of our products because of that protection, and they know they can sell our boats and make money. And we’re quite strict on our pricing.
SNEWS: It seemed like you enjoyed your time consulting for several different companies. How long do you plan to stay full time with Jackson?
JP: I’ll do it as long as I enjoy it, and right now, it’s been a welcome world from some of the experiences I had in my latter years of the corporate side of kayaking. I like being in a situation where we can make decisions and implement them so much more quickly. Also, we can make decisions for next year and two years down the road. We still have very tight cash constraints, and have to manage money carefully, but we don’t have to make decisions to make an impression at a quarterly board meeting.
And it’s great to be in a world where whitewater -- which is my first love -- still really matters and is the heart and soul of the company.