Winnebago’s Happe Addresses Type B Competition

A picture of the back of a Winnebago RV that says, "Winnebago."

Improving supply chain challenges and Type B market competition were addressed in Winnebago Industries’ fiscal 2021 first quarter review.

President and CEO Michael Happe noted Newmar’s challenge with a critical components vendor that impacted the company’s shipment potential during the quarter. The company plans to work through the issue through fiscal 2021’s second quarter, Happe stated, but anticipates production returning to normal in the fiscal year’s back half.

“What I have been telling people here recently is that our supply chain challenges have been impacting process, but not results here in the last 90 to 100 days,” Happe stated. “It is definitely causing us to do some rework or some workarounds in our manufacturing process, but our teams are heroically doing wonderful work, ultimately, still to get the products completed in a high-quality fashion and out the door. So, by and large, we are navigating it pretty well.”

Increased competition in the Type B market has been “long foreshadowed” by Winnebago, Happe stated. Its market share approached 45 percent to 50 percent in the past year.

“We welcome competition, obviously, in the spirit of innovation and serving the customer well,” Happe stated. “And so, you are seeing continuously new models introduced to the market by other players. And it will be a challenge for us over time to keep share at the level that we have, of a growing now more mainstream market segment.

“But we will work like heck to try to keep every point of share that we possibly can,” he added. “And we will do that, because we make high quality, innovative, differentiated products that we think people ultimately aspired.”

Happe noted his satisfaction with Type B growth as a whole, which allows the category to come into the mainstream.

“It is expanding the number of consumers that view our business as something of potential value in their lives,” he stated. “It is allowing different use cases.

“And so, for us, this is a net positive, but we intend to compete very vigorously in that space for years to come,” Happe stated.

During fiscal year 2020, Winnebago initiated more than 100 cost-savings initiatives to drive savings, VP and Chief Financial Officer Bryan Hughes stated, including some in the Type B space.

“Just as a couple of examples in our Class B facility, which is in Lake Mills, Iowa: We used to outsource some re-covering of seats from the chassis that came in,” Hughes stated. “We figured out a way to reconfigure our line, make it more effective and efficient from a space-utilization perspective, and we in-source that re-covering. That project alone saved, we think, $300,000 to $350,000.”

“We believe our volume will continue to grow, because the market segment will grow,” Happe stated. “But lots of future evolution, certainly, will happen there. It’s an exciting time in the RV industry for that particular category.”

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