Skyrocketing hot tub demand impacts R&D, new product launches for manufacturers
The hot tub industry is accustomed to hot tub manufacturers announcing upgraded or brand-new models each year, with fresh ideas released to maintain interest for both dealers and consumers.
But since March 2020, things haven’t gone according to plan. For manufacturer research and development, this has meant delay after delay beyond their control.
“We have to get through the orders that we have of [existing] models before we launch this or that,” says Doug Gillespie, vice president of marketing for Hydropool, a Canadian hot tub manufacturer. “That’s the dilemma every manufacturer has: How do you get new product out when you’re sold out [of current product] for six months to a year?”
Nearly every manufacturer has experienced product development disruptions of some kind due to the pandemic, says Jake Ricks, director of marketing for Bullfrog Spas, a manufacturer in Utah. “Just as we’ve all had to adjust a lot of priorities, practices and activities in our lives away from work, we’ve had to call some audibles in our work programs, too.”
A perfect storm of events has led to manufacturer delays in both new models and innovation releases. Sam Bania, co-owner of Aspen Spas, a manufacturer in St. Louis, breaks the delay down to three major factors: manufacturers are overrun with product orders; there have been significant delays in the supply chain; and face-to-face meetings necessary for concept development are harder to pull off.
“Add in all of the naturally baked-in issues revolving around the COVID-19 pandemic, and it’s obvious that we at Aspen Spas will either be delayed in or will not be able to hit some of our goals for research and development,” Bania says.
Aspen Spas has continually worked toward introducing one to two new or redesigned spas per year, Bania says, but was unable to do so in 2020 and may not be able to this year, either. “We have an ambitious goal of introducing a new all-in-one spa frame, cabinet doors and corners concept that has been tabled until the pandemic subsides and conditions are more manageable,” Bania says.
While Hydropool is still developing new products on the same schedule, delivery dates of current orders have been pushed into launch times, says Jamie Wright, director of engineering. “Typically, our product launches were done by calendar year,” he explains. “All new product to be launched for the following year would need to be ready each fall, leaving time for marketing to develop all the tools needed for sales. With the pandemic, this launch date is now a moving target based on backlog.”
In 2022, for example, new products will need to be ready and launched in the second quarter of 2021 for delivery in the first quarter of next year, she says.
Training is also an issue. “New products will require training the workforce and will slow down the production process,” Wright says. “In these times, the smoother and more repetitive we can make the process, the better it is for production and quality.”
Wade Spicer, founder and CEO of Strong Spas, a manufacturer in Pennsylvania, says the pandemic has caused staffing issues. Of the 700 employees that make up the current manufacturing and distribution centers, as well as the second plant opening this year, Spicer estimates that between 8 and 10% of the workforce miss work each week, spreading the company’s other employees thin. Some of its older engineers have had to work from home, too, even from out of state, hindering communication and collaboration for the R&D team.
“Not only that,” Spicer adds, “but a lot of our partners and other corporations we work with for engineering and different parts that we source have definitely been hindered.”
Specifically, Spicer says it’s not a good time to send new part needs to suppliers. “The suppliers aren’t working on new items of any magnitude because they’re just trying to keep up with everybody else,” he says. “If you’re working with a certain supplier on something that they have to manufacture or try to fix in order to work with your new product, they’re not motivated to do it [right now].”
Ricks is likewise concerned about the supply chain for new products. “Our suppliers are struggling with their suppliers and so on down the line,” he says. “In order to treat our supply partners responsibly, we recognize it’s not the best time to be asking for a whole new array of parts, in less predictable quantities, when they’re battling as hard as they are to simply continue operating.”
Bullfrog Spas has delayed for up to two years the launch of some new products, Ricks says, “and we’ll see if those targets hold as market conditions continue on a somewhat unexpected trajectory.”
Most dealers are just worried about getting ordered products into their customers’ backyards as soon as possible, Ricks says: “The delays in product launch timelines in our case have a little to do with our focus on manufacturing, but a lot more to do with our respect for our dealer partners. Anything we can do to help our dealers help their customers in predictable ways, we’re doing.”
Spicer says no one is demanding new products right now anyway because, in his view, retailers don’t want to deal with trying to figure out how to sell new items. “They can’t get the stuff they sold six months ago,” he says, “so why would they want something new and unperfected that they can’t even get? They’re just grateful to get the product so they can make the sale.”
The huge influx of orders has forced manufacturers to look for ways to increase production while not negatively impacting quality, says Wright. While this has taken from new product development, “it has certainly made most manufacturers concentrate on continuous improvements,” she says.
Strong Spas has also noticed this and has taken it to heart. Spicer says R&D at Strong has prioritized processes over new product during the pandemic. The company is in the final stages of building a new manufacturing facility with a focus on automation.
“There have been very good [hot tub] innovations over the years, but there’s only so far you go with something to hold water,” Spicer says. “I do think the manufacturing process needs innovation; it has for a long time. It probably isn’t all that different from the way they did it 30 or 40 years ago.”
Strong Spas is focusing on adding automation, likened to an automotive plant, to offset the risk of common shutdowns where hot tub production depends predominately on people coming in to work. While a costly and time consuming project, Spicer says more automation will also offset human error.
“I believe we’ll make a much better product, which will ultimately benefit the dealer and the consumers, because there will be fewer issues that go along with it,” he says. “Any time you have a human touch, there’s a chance of somebody not paying attention, something can go wrong. Hot tubs are a complex product to manufacture and could have hundreds, if not thousands of different points of failure that could happen. Hot tubs, by their nature, will always have a large labor component, but by adding in automation where possible, we believe we can find a better balance that will also produce a better end product.”
More recognition and higher demand for hot tub products have provided a unique opportunity for manufacturers to use R&D teams to examine the market and use new insights for furthering the industry.
“We are extremely excited about some of the learning going on throughout this time and what this will all mean for future product,” Ricks says. “You don’t often get a chance to look at data with such a marked change in consumer behavior right in the middle of it. It’s fascinating. The quick shifts in demand have showed us previously hard-to-see insights and have taught us critical lessons about what’s really important in our products — and what things perhaps are not.”
Bania says the urgency for new products and designs will resurge. “The pandemic will end eventually, and buyers will have more flexibility in their decision-making process, reestablishing their right to be choosy,” he says. “That puts the pressure on us to wow them again.”
For now, focusing on meeting unprecedented demand outweighs any temporary slowdown in new product releases, says Dave Wright, vice president and general manager for Dream Maker Spas in Florida. “This new consumer focus on our products will spur new product development in the long run,” he says. “I’m excited to be a part of this historical time for our industry.”
Jamie Wright of Hydropool concurs. “The lack of new product [right now] will not be a drawback to the industry,” she says. “The improvements and gains made during this time will last long after the pandemic ends.”