Manufacturers are staying proactive with expansion plans designed to speed production and streamline processes. From additional work shifts to building out larger spaces, greater output is great for the industry: More facilities mean more jobs, more economic growth — and more hot tubs delivered sooner.
As some manufacturers settle into new facilities and refine processes, dealers stand to benefit by way of more bearable wait times — so long as raw materials arrive on time to manufacturing plants. As the perks of these upgrades unfold, top manufacturers continue to seek patience from dealers, says Bob Lauter, CEO of Master Spas.
While growth takes no small amount of strategic planning, manufacturers largely view expansion as necessary in light of relentless spa demand. After all, manufacturers must help their dealers continue selling hot tubs to a hungry customer base.
“Our industry has never been in that position where demand was greater than the capacity for all the manufacturers,” says Lauter of the spike in pandemic sales. “For manufacturers that aren’t expanding, it’s going to be a problem for them.”
Here are just a few examples of manufacturers embracing expansion to keep deliveries coming down the line.
Strong Spas
Danville and Northumberland, Pennsylvania
Expansion highlights: New plant with over $3 million in upgrades and new equipment, including robotic technology for assembly line production
If all goes well, Strong Spas will open its Danville manufacturing plant early this year, says CEO Wade Spicer. The plant is expected to bring 300 jobs to the area. Over the last year, Strong Spas added a second shift at its plant in Northumberland, Pennsylvania, to increase production during the peak of the hot tub demand.
The current facility and new plant will allow Strong Spas to produce a combined 70,000 spas a year.
Spicer also thought ahead in the event that shutdowns happen again. “I don’t think this pandemic is anywhere close to being done,” he says. “Having two separated facilities with two workforces can help with temporary shutdowns and that sort of thing.”
In the near future, Spicer says Strong Spas will also expand its MyHotTub.com retail stores in New York and Pennsylvania.
Clearwater Spas
Arlington, Washington
Expansion highlights: Open layout; doubled workstations
Clearwater Spas was eager for more space, but the project suffered from painful construction delays. In 2019, the company began working on a new plant, aiming for June 2020 completion, but ultimately moved into the building in March 2021. But staff settled in quickly once the new site was ready. The company kickstarted production again after only a three-day move due to “lots of planning and tremendous teamwork across the company,” says CEO Brent Conver.
The open layout for the new production line helped the company streamline techniques to improve quality and productivity. Extra square footage gave the production team double the workstations, along with automation to prevent bottlenecks. A second shift and additional projects will expand the company’s overall capacity every quarter this year.
“With the addition of headcount and automation, we remain confident in our ability to add supply to the industry,” Conver says. “Clearly, the spa industry is going through a unique period of high demand. The ability to increase overall production will help bring some relief to our dealers and their customers.”
Core Covers
Tijuana and Leon, Mexico; Allentown, Pennsylvania
Expansion highlights: New manufacturing facility in Leon, Mexico, which will allow it to produce 35% more units.
There were two reasons Jerry Greer, CEO, wanted Core Covers to have another Mexico-based manufacturing facility — redundancy and growth.
“These last couple years have really caused a lot of concerns to all of us [manufacturers] that we didn’t used to have,” Greer says. “The lesson for us was, when the Tijuana plant got shut down initially because of COVID, they weren’t enforcing the same rules in mainland Mexico at that time. If we had two facilities, we could have had a less disruptive period. The best thing we can provide our clients is a sense of security that Core as a company will provide those multiple sources, that if something happens in one spot you can quickly pivot and continue shipping products.”
Six months ago Core began working on a new facility in Leon, Mexico, almost five hours north of Mexico City. Greer says Leon has been known as the leather and shoe capital of Mexico for decades and has more than a century of sewing DNA, so it already has many talented, professional and trained sewers. “It’s much less transitory than the border towns,” he says. “So it’s a much more stable workforce.”
As the hot tub OEMs Core supplies covers for add their own manufacturing capacity and plan for growth, Core must do the same not only to keep up, but to be sure it’s ready for the next wave of aftermarket needs.
“When you look three years out, that aftermarket demand is going to be obviously growing, compounding a need for additional capacity,” Greer says.
The new facility, which should be up and running in March, also gives Core a chance to upgrade its equipment. The company is purchasing state-of-the art sewing machines, which, among other benefits, help move the fabric around, meaning less strain on the sewers. “We will end up with a much better sewn product and it will be easier for the manufacturing team and on the individual employees,” Greer says. “Everybody wins — the employees win and the customers win because the product gets better.”
Master Spas
Fort Wayne, Indiana
Expansion highlights: Upgraded tech (robotic cutting system with precise trim); automation for lifting products
Even before the pandemic, CEO Bob Lauter and his team decided to be aggressive with Master Spas’ growth plan. That meant snatching up real estate whenever possible and adding to the company’s team. From 2019 to now, the company expanded from 28 acres to 46 acres — the equivalent of 600,000 square feet of manufacturing space. For Lauter, business comes with risk and, because he expects growth in the industry, he’s hopeful for his company and other spa manufacturers willing to grow.
“I don’t think it’s risky to expand,” he says. “It depends on the amount of risk you’re willing to take. It’s been a challenge. For manufacturers who weren’t healthy before the pandemic, if they don’t have money to invest in opportunities, they’re just going to get further behind.”
In total, Master Spas invested $15.3 million in 2019, building a new 166,000-square-foot swim spa factory and expanding its acrylic spa factory. Through 2021, capital improvements included an expansion to warehousing and production facilities.
MAAX Spas
Chandler, Arizona; Ottumwa, Iowa
Expansion highlights: $5 million+ for new facility
In a unique business move, in December 2021, MAAX Spas chose to open a factory states away from its headquarters to start building swim spas in what was previously a bath factory. With its home base in Chandler, Arizona, but much of its business in the northwest, Canada and the Midwest, adding a production facility in Ottumwa, Iowa, made sense. The additional facility will allow the company to reduce shipping costs to a big portion of its customer base compared with the Arizona location. The company hopes that will also get products to customers faster.
“We’ve had a great year,” says Steve O’Shea, vice president of sales and marketing. “We see the opportunity to be a top three manufacturer of swim spas. That industry is going to grow.”
Additionally, the company plans to make major investments in employees over the next few years, including nearly $3 million in wage increases to hire and retain employees.
Watkins Wellness
Southern California, Tijuana, Mexico
Expansion highlights: Added 80,000-square-foot distribution center; building 400,000-square-foot factory
Arguably already the largest hot tub manufacturer, Watkins Wellness is also adding manufacturing and storage space to its portfolio. The company purchased a 80,000 distribution center in 2021 and is currently building its sixth factory, giving it another 400,000 square feet, which should be operational in 2023.
“We’ve got another year ahead of us, so we’ve got to bridge where we are now to when we get there,” says Steve Hammock. Hammock was president of Watkins for 40 years and retired at the beginning of this year. “But we put a marker down and said, ‘Hey, here’s where things change. Here’s where things improve.’ ”
When the project is complete, Watkins will have 1.2 million square feet of manufacturing space between Southern California and Tijuana. “From our farthest north facility, which is our headquarters, and our farthest south facility, which will be the new factory we’re building, we’re an hour and a half door to door and that includes crossing the border,” Hammock says. Hammock adds that Watkins and its parent company MASCO are very bullish on the hot tub industry. “We’ve always spent the money to be in a position to do what’s next,” he says. “I remember when we moved into [our headquarters in Vista] and I thought, ‘Man, we’ll never fill this building.’ We’re betting on ourselves and we always have.”