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Hot Tub Industry Growth Initiative

Posted by Steven Gorlin on October 31, 2008 at 8:14am in Business Growth, Expansion, and Current Opportunit
A BRIEF UPDATE ON SEVERAL FRONTS:Cal Poly / CECThe final report on the spa energy testing performed this summer has been issued by Cal Poly. The APSP CEC Spa Committee negotiated with Pacific Gas & Electric, a clarification to the Title 20 ruling that decreases by 10% to 20% the amount of energy a hot tub gets “charged” with using during the test. This clarification will help many units pass that might otherwise have failed. Also, the clarification strengthens the repeatability of the test results, increasing the manufacturer’s confidence that if a particular unit passes once, it will probably pass again by a similar margin when tested at a different time, or even a different facility. For a copy of the final report, or to volunteer to serve on the APSP CEC Spa Committee, please contact Carvin DiGiovanni (cdigiovanni@apsp.org).CPSC and the Virginia Graeme Baker ActAPSP is working with the U.S. Consumer Product Safety Commission to ensure that lockable covers on portable hot tubs are defined as a suitable “barrier” under their interpretation of the VGB Act, as it is under the Act itself. The APSP Spa Committee is also working with CPSC to satisfactorily address language of drain separation in the CPSC’s VGB Act compliance guidelines. The APSP was attempting to meet with CPSC this week, but this meeting has been delayed by the CPSC until early December. At the meeting APSP will present the industry concerns and the APSP recommended language (attached) as developed by portable hot tub manufacturers and the APSP Technical Committee, and APSP will ask CPSC to include the APSP clarification language in the official CPSC interpretation of section 1406 of the VGB Act. Without the language in the official CPSC interpretation, non-compliant portable hot tubs conceivably could be outlawed by the VGB Act because of their design. The proposed language is designed to provide as many options as possible and to make it very flexible for portable hot tub manufacturers to comply with the VGB Act.Hot Tub Council MeetingThe Hot Tub Council (greater industry welcome) will next meet on Wednesday, November 19 beginning at 7:30 a.m. in Surf A of Mandalay Bay in Las Vegas, NV. Meeting agenda attached. If you haven’t already done so, please let me know if you plan to attend. For those of you who won’t be in Las Vegas, Council will meet again in Atlantic City, NJ during the NESPA Pool & Spa Show (January 27 – 29, 2009)Hot Tub Industry Growth Initiative (HTIGI) FundingIn light of the industry’s continued dramatic decline, the Funding Task force considered, once again, its premise behind the funding model originally proposed one year ago in San Diego. There is unanimous agreement among task force members that this still the most equitable and sustainable model with which to grow the hot tub category. The basic premise, was and is as follows:The fee to be assessed to participating OEMs will be $8 / horsepower. (This amounts to $30 per hot tub on average)Commitment of those OEMs representing 70% of the North American unit sales will be considered the minimum level of participation necessary for the initiative to move forward.First dollars in from the OEM pump assessment will cover APSP dues of that participating company.All remaining dollars raised through the OEM pump assessment will fund consumer awareness activities such as internet advertising, consumer fulfillment, print advertising, in-store promotions, etc.First dollars in from the Hot Water Fund (supplier sponsorships) will cover APSP dues of that participating company“Second” dollars in to the Hot Water Fund will address industry professionalism activities such as product and dealer certification. (Note: Expenditures in this area should be minimal in the first 12 to 18 months of the initiative, and will most likely be covered through APSP dues alone. Therefore, most of the HWF will be directed towards consumer awareness building activities (such as public relations) and industry awareness building activities (such as to communicate results, manage the campaign / support the effort, and continually expand participation in the initiative.)All campaign funds (be it OEM assessment or Hot Water Fund sponsorships) will be spent according to the desires and under the direction of the HTIGI Board of Directors, whose decisions will be governed by the documents they create when the organization is funded and established.HTIGI Industry Sell-inThe hunt for the “holy grail” – that is, getting commitment from OEMs, Suppliers and Dealers to participate in the growth initiative – is still on.Given (1) the dire state of our industry, (2) the potential for growth as evidenced by Harrison Group’s research, (3) the fact that, as skittish as they are right now, consumers are spending money on “comfort objects” in the home, and (4) the need the industry “to stop the insanity” and do something different, HTIGI should “sell itself”.We’re looking for Growth Development Associates (Eric Richardson’s company) supply the “secret sauce” we’ve been missing to date to make that happen.Members of the Strategic Planning Committee will meet with GDA next week and we will share the tangible results of that discussion in Las Vegas. (So, come ready to write the check!)I look to see many of you in Las Vegas. For those who will be overseas at the time, I wish you much success there too.

HTC -- Agenda(12).doc

2_Plane_Language_for_Spas.pdf

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  • Justin Gregoli November 15, 2008 at 9:57am
    I have a question regarding the CEC issue. Isn't it a disservice to all lowering the requirement by 10%-20% to help certain spas make it through the testing? I would think making it more difficult to pass would encourage the manufacturers to create a more efficient spa. In this day and age increasing efficiency should be more important than letting lesser manufacturers sell spas to unsuspecting consumers. In the short term it would hurt the supply chain and raise prices on the quality spas a bit but in the long term the quality product would recieved better by the consumer as a trusted efficiency rating is accepted sales will increase due to the lack of confusion that exists today.
    As a spa dealer I am very excited about the efforts being made by the growth initiative and I am looking forward to the results it brings to our industry!
    • John Warner > Justin Gregoli November 15, 2008 at 1:08pm
      Steve, correct me if my understanding is not quite right. The test was not changed to allow more spas in. The protocol had to be changed because as written it allowed only 10 - 20% of spas to qualify. The problem was not that the spas that did not pass weren't meeting the targeted standard, but that the protocol, as defined, had failed.
  • Rex Richard October 31, 2008 at 8:27am
    Thanks for the update Steve! Great information we all need to know.
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