Warming Up: Fort Lupton’s Aqua Hot adjusts to new market

By Kevin Denke
Posted 11/24/10

    Sometimes, the more hot water you get into, the better off you are.

    Such is the case for Fort Lupton’s Aqua Hot, bouncing back strong after a …

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Warming Up: Fort Lupton’s Aqua Hot adjusts to new market


    Sometimes, the more hot water you get into, the better off you are.
    Such is the case for Fort Lupton’s Aqua Hot, bouncing back strong after a crippling recession that saw many in the hydronic manufacturer’s customer base scale back, and some fail entirely. While some envision hot tubs and spas, Aqua Hot’s core business is onboard water heating systems for recreational vehicles, from small campers to leviathan land yachts.

    Brainchild of late founder Hap Enander, the heater concept came into being through his own experiences traveling by RV. He realized that creature comforts, like extended hot showers and quiet, efficient ambient heating systems, simply didn’t exist in the market. Aqua Hot filled the gap, eventually growing to $17 million in annual sales, and a broad product line servicing a multitude of RV manufacturers as original equipment on their products.
    With the passing of Enander in 2009 and the economy in free-fall, the company faced painful decisions regarding staffing, eventually tapering the workforce back two-thirds to the core working at the plant today. Typical of sales in an industry based solely on discretionary income, sales plummeted to an all-time low of $4 million before rebounding.
    “It was brutal,” explained Paul Harter, president of Aqua Hot. “Our three largest customers all filed for bankruptcy in about a three-month period.”
    For 2011, Harter (before official projections) estimates $10 million in sales – not all the way back – but certainly headed in the right direction. About 5 percent of those sales are forecast in new products, a sign of the company’s increasing efforts to adapt to changing market conditions.
    One aspect crucial to the company’s continued success is the on-site training classes offered to OEM manufacturers and service centers in the installation, maintenance and service of the company’s products.
    “We have about 160 partner service centers in the U.S. and Canada, and they send their technicians here to be trained,” Harter said. “That is a huge part of our business. If these folks traveling across the country in their RVs couldn’t go into a reasonably local service center when they needed maintenance, we wouldn’t be able to sell the product.”
    On the new product front, Aqua Hot recently developed a line of heaters for the Utility Terrain Vehicle, or UTV market. The small two-seat side-by-side vehicles, popular with farmers, ranchers and sportsmen are hot sellers for manufacturers like Polaris, Yamaha, Kawasaki and John Deere due to their versatility. Aqua Hot boosts that versatility by making the vehicles all-weather capable with cabin heat, a definite plus for owners.
    “We just went to the SEMA (auto) show in Las Vegas, and the product really took off,” Harter said.  “We have a bunch of dealers wanting to sign up for it now. We made a pretty big splash. Polaris came in and wants to talk to us about doing business, Kawasaki came in, and John Deer. It would be nice to add them to our customer list.”
    Unlike the RV heaters, which sell mainly to the OEM manufacturers, the new UTV heaters will sell directly to owners, who either have them installed at the dealership, or as a do-it-yourself project for the home mechanic, a big change for marketing and sales at Aqua Hot.
    “We will have these up on or website, and we will be selling directly to the people that own the toys,” Harter said. “That improves our profit position, and improves the feedback on quality performance for a product.“
    Also improving feedback and customer satisfaction is Aqua Hot’s push to return to domestic suppliers resonates in an industry based in America’s heartland.
    “Yes, we are consolidating our supplier base, back to the United States., and preferably back to Colorado,” Hartley said. “Even if it means paying a bit of a premium, we are trying to go back to all domestic suppliers, and preferably Colorado suppliers.”
    Even with a premium for stateside suppliers, Aqua Hot plans to recoup costs in both customer satisfaction and reduced engineering costs by working in concert with suppliers.
    It’s all part of a philosophy focusing on goodwill, fostered by the company’s new owner, a foundation governed in parts by Harter, Hap Enander’s minister Skip Higgins and Hap’s son Jared, along with two other board members..
    “The company is owned by the Enander Family Foundation,” Harter said. “Hap left everything to the foundation to continue his work with Christian youth ministry.”
    According to Harter, once the business balances out at years end, a dividend is declared and goes directly to the foundation. The foundation then makes grants to youth organizations of the board’s choosing. The board plans to identify organizations to benefit rather than solicit them, to keep from being inundated by grant requests. The foundation, still working to settle a complicated Enander estate, hopes to begin disbursing grants in 2011.
     “So far it’s been a very positive transition,” Harter said. “We are all excited about having the money that we make go to such a worthy cause. It’s a selling point too. Folks like to hear that. They like to see ‘Made In America,’ they like to see the proceeds go to help youth. Positive feelings all the way around.”


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