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January 2014 1
August 2014
Follow on head on Master page A
Endless Summer: How Six Seasonal
Industries Stay Warm in Winter
By Nick Petrillo
Seasonal industries that are willing to get creative in the off-season may
experience less overall volatility over the calendar year
Seasonal
industries
are subject to
high revenue
volatility
throughout the
calendar year
Cedar Fair vs. Six Flags 2013 Quarterly
Revenue as a Percentage of the Total
60
50
30
20
10
Third Quarter
Fourth Quarter
Cedar Fair
Six Flags
Second Quarter
0
First Quarter
%
40
SOURCE: WWW.IBISWORLD.COM
Warm weather facilitates family
vacations, outdoor activities and cold
refreshment sales, providing several
industries with an opportunity to
generate enough revenue to sail through
the rest of the year. These seasonal
industries struggle to remain lucrative
throughout the winter months, as frigid
temperatures and annual changes
in consumer behavior challenge
profitability. While many seasonal
industry operators anticipate May’s
arrival, when demand increases as
the sun also rises, these six industries
are determined to make a splash
year-round, come rain or shine.
in the United States and holds a 6.4%
market share, earns 80.0% of its revenue
between Memorial Day and Labor Day.
To mitigate the industry’s high
seasonal volatility, combination
indoor/outdoor parks are becoming
increasingly popular. While summer
will always be the most popular time
to visit water parks, savvy operators
learned they can earn revenue yearround with water attractions in heated,
indoor environments. Indoor water
parks are expensive to develop and
maintain, however, the extra revenue
earned through indoor attractions will
more than cover the rising outlays.
Amusement Parks
The Amusement Parks industry, which
consists of theme parks and water parks
that provide thrill rides, animal exhibits
and other attractions, is highly dependent
on seasonal factors such as weather
and school vacation dates, meaning
the industry is subject to high revenue
volatility throughout the calendar year.
This is especially true in northern states
where cold weather forces parks to
close come October. Most amusement
parks are open between late spring and
early fall to accommodate the school
holiday rush. For example, Six Flags,
which operates 16 amusement parks
Sunscreen Manufacturing
Sunscreen manufacturers prepare,
blend, compound and package sun
protection lotion, cream, spray or
other topical applications to protect
the skin from harmful, cancer-causing
UV rays and help prevent sunburn.
In the United States, the Sunscreen
Manufacturing industry earns an
estimated $382.4 million annually, with
multinationals Bayer AG and Johnson
& Johnson representing the largest
domestic sunscreen producers. Growing
awareness regarding the risk of skin
cancer and aging associated with UV
rays has spurred an increasing number
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August 2014 2
Endless Summer: How Six Seasonal Industries
Stay Warm in Winter
Baskin Robbins 2013 Quarterly
Revenue as a Percentage of the Total
30
%
20
10
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
0
SOURCE: WWW.IBISWORLD.COM
The Home Depot, Inc. 2013 Quarterly
Revenue as a Percentage of the Total
30
%
20
10
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
0
SOURCE: WWW.IBISWORLD.COM
Anheuser-Busch InBev 2013 Quarterly
Revenue as a Percentage of the Total
30
%
20
10
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
0
SOURCE: WWW.IBISWORLD.COM
of consumers to use sunscreen over the
past decade. However, customer orders
for sun-care products are highly seasonal,
which has historically resulted in higher
sun-care sales to retailers during the late
winter through midsummer months.
Convincing consumers that sunscreen
is essential beyond the summer months
is not an easy task. However, producers
are increasingly marketing sunscreen as
both a health and beauty product that
helps nourish skin. Additionally, more
evidence supports nonsummer months
as an important time of year to continue
routine use of sunscreen during outdoor
activities. Studies have shown that
dangerous overexposure to UV radiation
can still occur during the coldest months,
particularly in high-altitude areas and
locations where UV rays can be reflected
by the snow. For skiers and snowboarders
across the country, sunscreen may soon
join helmets as an essential item to grab
before hitting the slopes.
Ice Cream & Gelato Store Franchises
The sluggish economy, rising competition
from frozen yogurt stores and increasing
health consciousness of consumers
have put pressure on the Ice Cream and
Gelato Store Franchises industry over
the past five years. However, it is the
high seasonality of demand that poses
the biggest challenge for ice cream store
operators. Demand usually surges during
summer when consumers flock to ice
cream eateries for relief from rising
temperatures, but most consumers
prefer to warm up with hot coffee and
cookies during the colder months
As a result of seasonal demand, many
ice cream stores shut down or convert
their menus to sell a higher proportion
of winter treats when ice cream demand
falls with the first leaves in autumn.
Another increasingly lucrative way for ice
cream and gelato stores to quell declining
sales in the cooler months is to wholesale
their products to supermarket chains
and restaurants. For example, restaurant
chain Friendly’s, which is most famous
for its ice cream sundaes, now sells its ice
cream products to 7,500 supermarkets
nationwide, including a new contract
with Walmart. In-home ice cream
consumption is rising and restaurants
often prefer to sell locally produced
desserts such as gourmet ice cream.
Breweries
The summer season generally correlates
with much higher sales for the Breweries
industry. Barbecues, federal holidays,
vacations and extended travel all
contribute to the increased consumption
of alcohol during the hot summer
months. Only a few years ago, ice-cold
weather was a sure sign of cooling beer
sales; however, in today’s diverse market
for alcohol, each turn of a calendar
page marks another major marketing
opportunity for US brewers. Limitededition seasonal flavors have become
serious revenue earners, particularly
for brewers of craft beer. Pumpkin and
cinnamon spices are popular fixtures
for the fall season, cream stouts and
extra bock offerings provide a thicker
consistency for cold winter nights
and light, citrusy beers have become
spring staples for many consumers.
Home Improvement Stores
Home improvement stores generate
a significant portion of sales in the
warmer months, not just from home
improvement materials and supplies, but
also from summer retail items such as
barbecue grills, outdoor pools and other
leisure goods. Home improvement store
operators enjoyed a prosperous summer
in 2014, as homeowners in the northeast
repaired damage caused by severe
winter snowstorms, and the housing
market rebound encouraged people
to invest in their dwellings. However,
sales at major home improvement
stores including Home Depot and
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August 2014 3
Endless Summer: How Six Seasonal Industries Stay
Warm in Winter
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Lowe’s tend to drop off significantly
during the cooler months, when severe
weather causes declines in both home
improvement activity and leisure time.
Home improvement stores attempt
to mitigate losses in cooler months
through increased holiday shopping
campaigns. Black Friday deals, afterChristmas promotions and weekly
circular advertisements have all
become staples of the industry’s recent
splurge in off-season marketing. Home
improvement stores are also selling a
larger array of consumer staples, such
as toilet paper and cleaning supplies, to
generate more foot traffic during winter.
Landscaping Services
Landscaping, maintenance, lawn care
and exterior home projects are often
put on ice during the colder months.
However, as the US real estate market
continues to recover from its prolonged
supply glut, new and existing homes
are undergoing an increasing amount
of landscaping services throughout
the year. In particular, landscapers
have increased the number of services
aimed at preserving lawns and gardens
over the winter months. This process
of ‘winterization’ includes services
such as autumn fertilization, aeration,
mowing and raking services, all of which
are considered investments toward
ensuring the grass is always greener
on your side of the street. Additionally,
many landscaping businesses use their
existing equipment to provide valueadded fall and winter services such as
snow plowing, salting, leaf clean-up,
gutter cleaning and firewood, enabling
operators to rake in revenue year-round.
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