Mike Nussman, President & CEO
American Sportfishing Association
ICAST Industry Breakfast
July 19, 2006
Las Vegas Convention Center

Thank you, Dave.  We’ve all benefited tremendously from having Dave at the helm of the Board of Directors. He’s really helped improve our accountability and challenged us to develop better ways to measure results. Even though he’ll be turning over the chairmanship in a few months, his contributions are going to have a lasting impact on your trade association and our industry. I hope you’ll take a moment to thank him during the show.

Dave’s comments are right on target; ASA’s ability to do a good job depends on the input and involvement of our members. In fact, that’s what I want to talk to you about today….how we take your involvement and use it in innovative ways to grow your businesses and our sport.

But first, before I go there, let me lay some groundwork by updating you on both our successes and challenges. Where we’ve been and where we’re going.

Let’s start with ICAST. The show just keeps getting better and better…look around you…no matter what metrics you use, we are growing at a significant rate. Looking back over the last five years:

In terms of attendance, we’re attracting 35 percent more people to ICAST than we did in 2001.

In terms of total show size, the amount of booth space sold has grown by 40 percent and demand for space still exceeds our capacity!

In terms of media coverage, the number of working media has grown by over 50 percent.

In terms of the number of buyers on the show floor, through our collective efforts and the strength of your products, we’ve grown this number by more than 45 percent.

Of course, a good show is as much about quality as it is about quantity. Our new Show Specials Guide for Buyers helps buyers maximize their time and savings, and is a good example of a quality improvement we’ve made.

In the consumer show arena, we’ve made a significant long term investment with a new venture. In January, we formally partnered up with Paul Fuller and the Eastern Fishing & Outdoor Exposition to produce three highly successful shows in the Northeast.

When we combine these events with the three longstanding Fred Hall shows in California, we’ve got an outstanding presence in two of the best markets in the country—California and the Northeast.

These shows open up a whole new world of possibilities for ASA members to forge new links with your best customers, and win new ones. We’re planning strong promotions for these shows in the future, and anyone who is exhibiting can certainly capitalize on that. I want you to remember, these are your shows! Besides providing marketing opportunities, these shows also bring in new revenues that can be invested in protecting your business interests.

The way I’ve always seen it, serving as the industry’s watchdog is our main reason for being. I recently said in our newsletter that we were living in an interesting time! I have to admit this certainly applies to the last 18 months we’ve spent working with the IRS on the consistent application of the federal excise tax. From the beginning, ASA, lead by our excise tax committee, has maintained that the tax must be administered fairly; that the integrity of the trust fund be maintained; and that any changes in interpretations by the IRS look forward in time, not backwards.

Last week, the IRS delivered a directive that offers the most clarity we have seen from that agency. Now our challenge is to make sure the IRS is true to its word and applies the document in a practical, reasonable and forward looking manner.

Our members were pivotal in our discussions with the IRS. Member involvement makes a huge difference. We saw another prime example of this earlier this year during the proposed closure of the California salmon fishing season. We worked with policy-makers in Congress and in the White House to turn this issue around. At the same time, the Coastside Fishing Club, lead by Bob Franko and Darrell Ticehurst, along with Dick Pool at Pro-Troll gave the issue its local voice in California. They mobilized anglers where they were most affected. And after a campaign that lasted several months, we were successful in reinstating the California salmon season.

In addition to our government affairs activities, I’m very proud of the work of our two foundations, FishAmerica and Future Fisherman. These foundations have a national impact on fisheries conservation and angler education.

FishAmerica is now providing over a million dollars a year in conservation grants to improve fishing. Its Gulf Fund is working to restore fisheries that are still suffering from the devastation from Hurricanes Rita and Katrina.

The Future Fisherman Foundation’s expansion into classrooms across the country with its Physh Ed angler education program is producing great results. With support from RBFF, the foundation held its 4th workshop last week for 41 teachers from 21 states and I’m told their enthusiasm for teaching fishing and boating has no limits.

But now, if I could, let me turn to the industry, take a pulse of what’s going on, so to speak. I’ll tell you what I’ve been hearing lately and review some market indicators. Overall, the tackle market seems to be up slightly from January through June of ‘05. That’s according to dealers that report to SportscanINFO. With that said, I’m certainly hearing from a lot of companies that are well behind last year’s numbers. So there seems to be significant weak spots all across the industry.

One thing that’s for sure though—and I hear it from everyone—this industry is changing….From manufacturers to distributors and retail, we’re seeing change. And herein lays one of our greatest challenges. Understanding how to respond so we keep up with that change.

As Jack Welch said: “When the rate of change outside your organization exceeds the rate of change inside your organization, the end is near.” If Mr. Welch is correct, I’d say we all need to reflect on what it means to us, to our companies, to our industry, and even to our trade association.

I recently had the opportunity to hear Oren Harari, a well known business consultant, speak, and one thing he said really stuck with me. He said the number one challenge for businesses today is “the rapid acceleration and pervasiveness of the commoditization of everything.” Clearly we are seeing this throughout our industry. I‘m pleased that later this morning, our keynote speaker, Dr. Larry Steinmetz, will take a closer look at business and selling in this type of environment.

What are the other challenges we face? Let’s turn to our sport. It turns out we are in serious competition for people’s leisure time.

A study released last month by The Nature Conservancy found even more confirmation that Americans are growing less and less interested in spending time outside. The report showed that over a 16-year period, from 1987 to 2003, visitation to National Parks decreased by 25 percent. What’s more interesting is the researchers tested more than two dozen possible explanations for the trend and found that most of the drop was explained by video games, movie rentals, and Internet use.

Another report released last month by the Outdoor Industry Association showed that while the overall number of Americans participating in outdoor activities grew last year, the total number of outings decreased by 11 percent.

But you know … despite all of this, fishing is still one of the most popular outdoor activities with Americans taking over 1 billion outings last year. And even if we compare it with all recreational activities, indoor and out, fishing still compares favorably, ranking in the top 5 somewhere behind reading and watching TV. So no, there may not be a crisis in fishing participation…but there is a steady downward trend in many outdoor activities, including fishing and we need to pay attention to it.

So let me now return to where I began my talk today: back to our theme of innovation. When I first starting thinking about fishing, and tackle, and this show and innovation, my mind went to new products, probably because of the focus we put on our New Product Showcase.

Now I happen to think that new products are terribly important for the industry and the sport. After all, product sales soar when there are breakthroughs in technology: plastics and products; the internet and information; spinning reels and fishing. There are a million examples, but we all know that new products are not essential for innovation.

Harry Truman once said “The only thing new in this world is the history you don’t know.” You know it’s interesting how often innovation is not a brand new product per se. Nowadays; a lot of businesses are using what I’d call a “back to the future” approach to expand their markets.

With its new Wii {we} video game console, Nintendo is trying to attract new customers and win back lapsed players by making games simple and intuitive. It’s not remaking Asteroids, but its efforts are aimed at consumers who’re turned off by the complexity of Xboxes and PlayStations. A similar approach is being used by Dunkin Donuts and McDonald’s to win market share in coffee sales. They’re appealing to the Average Joe by promoting themselves as the Un-Starbucks. They went from “hold the pickle, hold the lettuce” to “hold the frappuccino.” McDonald’s is already getting double-digit growth in coffee sales by promoting premium but straightforward and inexpensive coffee.

Even the iPod, one of the most popular recent innovations, was developed mostly by repackaging existing product components. Apple recognized the recording technology was basically there, that the music downloading websites existed, and it put the two together in an innovative and very profitable, manner. Of course, a key part of Apple’s success was its emphasis on marketing its product in new ways.

So, innovation isn’t just inventing something new, it’s doing things differently so that they’ll match up with what’s going on in the marketplace. In fact, I’m hoping that the next big thing for fishing won’t be a product at all. Instead, I’d like to see us as an industry get innovative around the idea of making fishing more popular…..

Instead of a future where we continually compete for pieces of a smaller pie, once and for all we need to get focused on making the whole pie bigger. In fact, my friends, that’s the core idea behind the new Anglers’ Legacy program. Last year I spoke about the Recreational Boating and Fishing Foundation’s Take Me Fishing Campaign and its goal to target some 35 million lapsed and occasional anglers and reignite their excitement for fishing. Well, Anglers’ Legacy is the other side of the same coin, aimed at mobilizing the more than 7 million avid anglers to serve as ambassadors for the sport and teach others to fish. Research shows a more than 90 percent retention rate when avid anglers introduce someone to fishing.

We need your help in reaching these anglers, your customers. Anglers’ Legacy allows us to unify the marketplace around a simple message: “share your passion—take someone fishing.” Without compromising your individual brand identity, it allows you to focus your existing resources and programs on strengthening relationships with your core customers, while at the same time growing the total market

Anglers’ Legacy is being launched here at ICAST, but it’s already been endorsed by 29 leading manufacturers, more than 100 fishing pros and celebrities, and 41 magazines. S0 even before its official launch, Anglers’ Legacy has taken off all on its own. And I think that’s good news for all of us.

As I conclude here today, let me thank you for your continued support of this association. You have our commitment that we’ll say focused on serving you; striving to get better every day. In my experience, nothing rallies people together more effectively toward a common goal than a clear vision for the future and a solid path to get there. More than anything, that’s what we try to do as your trade association. Thank you for joining us this morning and have a great show!