In this episode, Chris and Gooch provide a fireworks industry update for 2021.
Dave “Gooch” Guccione: Welcome to Get Loud with Black Cat Fireworks. With your host, Chris Noland and Dave “Gooch” Guccione.
Chris Noland: Hi, welcome everybody to our first ever podcast here at Get Loud with Black Cat Fireworks. I’m Chris Nolan, the VP of marketing of Black Cat. And along with me, we’ve got Dave Guccione, better known as…
Dave “Gooch” Guccione: Gooch.
Chris Noland: He’s the national sales director for Winco fireworks. So yeah, first time.
Dave “Gooch” Guccione: This is interesting.
Chris Noland: Here we go.
Dave “Gooch” Guccione: Yeah. You know me, I’m never short of stuff to talk about.
Chris Noland: Well, you’ve got the natural DJ voice, which kind of helps.
Dave “Gooch” Guccione: Ah, I don’t know about that.
Chris Noland: Yeah, you do. Yours is deep.
Dave “Gooch” Guccione: Yeah. I could do the fake voice really good.
Chris Noland: Yeah, exactly. Well, kind of a little bit about where we came with this. We want to really get the consumer kind of on board with what’s going on with the industry. And usually the average person thinks about fireworks 30 minutes a year, so we kind of want to get that conversation started early. A lot of the wholesale and importers kind of know what’s going on from that perspective, but for the consumer, it’s really just to show up at the fireworks stand, store, tent, and buy fireworks, and we want to kind of let them know what’s going on kind of behind the scenes so they can really get an idea of what to expect, not only this year, but maybe in years to come.
So really Black Cat’s been around, Black Cat marketing has been around since the late eighties and really have grown our product line. Used to be fireworks or firecrackers and bottle rockets, and has expanded to a full line. And until recently, Winco’s always been kind of involved with Black Cat from an import perspective. They were the largest importer of Black Cat in the United States, but over the past year and a half, two years…
Dave “Gooch” Guccione: I was going to say, couple of years, I think.
Chris Noland: Couple of years, they’ve obtained the exclusive license to distribute Black Cat in North America. So a lot of good things have come out of that, not only from a Winco side of things, but from a marketing perspective too. So it’s come a long way.
Dave “Gooch” Guccione: Yeah, absolutely. And it’s been a good partnership so far. Like all partnerships, there’s growing pains and there are opportunities, but I think the line of communication has definitely improved and especially when it comes to product development, especially I think what we’ve been able to make some really great headway on product development, staying ahead of things.
Chris Noland: For sure. For sure. So I think kind of the pressing question really is, is kind of what’s what’s this season look like, but I think to get an idea of what this season looks like, what it’s going to look like, you kind of got to go back in time a little bit. What’s happened over the past?
Dave “Gooch” Guccione: So, we need to go back, I mean, COVID is the big elephant in the room obviously worldwide with everybody’s lives, every moment of their lives. So we know about that. So we’re going to go back before COVID, pre COVID, this is like November, December, 2019. And there were some issues in China with there was an accident that happened and there was some other issues where the Chinese government wanted to go and reevaluate basically the manufacturing process in a lot of factories, and things shut down. So there was a shortage and there wasn’t product shipping. Let’s jump into the first, pre COVID, January, February of 2020, and there was some product that was barely being shipped, but nothing was still moving from the shutdown from 2019, December, 2019. COVID hits, everything shuts down and somehow some way in late spring, China got enough product onboard and into the wholesale warehouses, and then into the retail stores, where we had a very successful 4th of July season. That 4th of July season was driven by the lack of public displays.
Everybody was locked down and you had some areas of the country, I think most areas of the country were able to sell fireworks on a limited basis with social distancing, and these retailers literally sold out of fireworks. And it was because, one of the driving factors was there were no public displays, and there was so much pent-up demand for any sort of outdoor activity. And so fireworks really kind of had a, it was like toilet paper and hand sanitizer. It was the most unbelievable thing I’ve ever seen in my professional career. Not just fireworks, but any sort of goods that I’ve been involved in. Okay, so let’s go through the summer. Everybody’s very, very pumped up from having a great 4th of July season, and we get into the ordering process and the factory start to produce goods.
There’s some interruptions on the supply chain on the manufacturing side and on the shipping side, things start to really slow down. So we get towards the end of 2020, and there is a crisis already happening in the ports, especially in long beach, California, and that has spilled over into the beginning of the year in 2021, where you have over 60 shipping vessels, full of containers, not just fireworks. This might be one of the most under-reported news stories right now that there’s this general good stuff that you would find in major retailers, Target, Walmart, this stuff’s all sitting off in the Harbor along the beach, not being unloaded and because of the lack of demand, the lack of ship space and all that, shipping prices have gone through the roof.
Chris Noland: I actually heard that, I can’t tell you the source, but I heard that there was enough ships out there waiting lines, there was a 20 mile line of container ships and vessels, just waiting to offload. If you would stack them up.
Dave “Gooch” Guccione: I don’t know.
Chris Noland: It’s crazy.
Dave “Gooch” Guccione: I don’t know the exact number. I could say it’s probably tens of thousands of containers, once again, not just fireworks goods, but general goods, furniture, clothing, everything that’s sitting out there.
Chris Noland: Refrigerators are hard to get, I mean, you name it.
Dave “Gooch” Guccione: Right, parts.
Chris Noland: Parts for the refrigerator.
Dave “Gooch” Guccione: And this is the most under reported story in our country right now, and I don’t want to get political here, but it’s just not being reported, but everybody’s going to feel it when they go back to the store and see increased prices.
Chris Noland: So, from a retail perspective, if I’m a retailer, typically, I’ve got an idea of what I’m going to get, these wholesalers that I buy from, because of all that you just talked about, there’s no product to be bought, right? It was very limited product.
Dave “Gooch” Guccione: The retailer sold out. So this was like the largest purchasing opportunity for the fireworks industry, probably in its history for consumer fireworks. And you are interrupted with a shipping issue.
Chris Noland: Right.
Dave “Gooch” Guccione: And everything is coming in at a much slower pace and not the amount of product needed to have what we would call a normal 4th of July season, as we’re speaking right now at the beginning of March.
Chris Noland: Right. And I think this is something that impacts the upcoming years as well, because it’s going to take these wholesalers a little bit of time, years to catch up with, to get inventories back up to where they used to be.
Dave “Gooch” Guccione: We’re thinking it could be three years. Three years, possibly.
Chris Noland: That’s crazy.
Dave “Gooch” Guccione: Now, China could do some pretty amazing things on the manufacturing side. It’s the supply chain side right now. It’s the shipping companies. There’s no vessel space. And because of the lack of vessel space, the prices have gone at a maximum premium. There will be some sticker shock, I think, at retail on some large, large items because of just the shipping cost.
Chris Noland: Yeah, the freight is the key driver in that. It’s not necessarily that the product costs more, it’s just that the freight is what? Almost double? It’s crazy.
Dave “Gooch” Guccione: Well, there’s a little bit of an exchange rate issue, but if it’s a big box, a large box of fireworks, it’s going to probably cost a lot more to get it here to the United States than a smaller box of fireworks.
Chris Noland: Right.
Dave “Gooch” Guccione: Just to kind of simplify it for everybody.
Chris Noland: Yeah, that’s crazy. I think it’s just amazing to see what’s happened, where it’s going. You’ve got a lot of retailers out there that, from the consumer perspective, like I said before, fireworks is not top of mind year round. For some of the pyros out there it is. They’re constantly looking, seeing what’s new, what’s coming, all that stuff, but for the family that comes and buys a hundred dollars worth of fireworks once a year, they may not know about this and what’s going on. They may just come in and see that the price has gone up a little bit and they want to know why.
Dave “Gooch” Guccione: Right. Right. Exactly. And it’s all based primarily on freight. A little bit of an exchange factor, but I think you’re really driven by freight.
Chris Noland: Right. Yeah. It’s a crazy deal. I mean, I didn’t know what this was going to turn out to be, but I’m hopeful that it’s going to be a good season. A lot of product out there. Everybody can have a lot to fill their stores.
Dave “Gooch” Guccione: We’re so used to pulling it off in the end because we really had an issue, and as a consumer, if you’re just walking into a firework store or wherever, a tent, or a firework stand wherever you are in the country, and you see this thing full of fireworks, you didn’t know the backstory on it. And the backstory has been really for probably the past three years. There’s been some sort of product disruption scare along the way. It hasn’t been, “Hey, it’s all smooth sailing.” It’s been much less than smooth sailing, but the industry does a great job of doing their best to get the product to the consumer.
Chris Noland: Right. Right. And what’s, just so people have an idea, what amount of consumer fireworks are produced in China?
Dave “Gooch” Guccione: I think a 90… I think 99.5
Chris Noland: 99.9 percent.
Dave “Gooch” Guccione: I’m aware of some stuff made in Japan a little bit. I know that there’re some sparklers and some novelty items made in Mexico and Brazil possibly, but just about almost 99.9, 8% of everything comes from China, unfortunately.
Chris Noland: Yeah, and I get that question a lot. We get all the requests and stuff from the Black Cat website, but in this day and age, that’s kind of a big question. I think people understand that if they were to make this stuff here, it’d be very tough to do and very expensive.
Dave “Gooch” Guccione: It would be cost prohibited.
Chris Noland: Yes. Very much so. And also, I think this year will be a good year for those that buy fireworks to maybe come a little earlier. I think it’s been said, the third and fourth makes up about 85% of the purchases in those two days, but based on season lengths and stuff on the cities and counties and stuff, I think it can come earlier.
Dave “Gooch” Guccione: I think with the anticipated shortage of fireworks, this year especially, 2021, if you are looking for something in particular, if say you’re a pretty organized fireworks enthusiast, and you put on a big show for your family, and you know that you need a certain amount of fireworks, or you want to get certain types of fireworks, 500 gram cakes, some 60 gram canister shells, some specialty items, I would shop early. And the reason why is, this industry, I’m talking about the industry, in general, is going to be short fireworks. We were short last year, but this year where we sit right now, it’s not looking overly favorable for a full allotment of fireworks. There’s going to be some holes on the shelves and shortages in particular categories. So I would definitely… The word would be to shop early.
Chris Noland: For sure, for sure. 60 gram canister shells, that’s what we’re going to talk about on our next podcast, but that was a big run on 60 gram canister shells early last season to where a lot of people didn’t have any for the people that came in on the third and fourth to buy.
Dave “Gooch” Guccione: I think one of the biggest changes in our industry, besides the product really improving, is the consumer, actually, I think the consumer used to show up at a retail location and just did not know anything. There just wasn’t the kind of information on the internet now, than the internet back then, that there is currently. I mean, you could go to YouTube and go down a rabbit hole that you can keep going.
Chris Noland: You can either do fireworks or guitars, right?
Dave “Gooch” Guccione: Or guitar repairs, which is like one of my…
Chris Noland: Gooch is a seasoned musician.
Dave “Gooch” Guccione: That’s giving me way too much credit.
Chris Noland: We could dedicate a whole podcast to stories, or two or three podcasts of stories that Gooch has from back in the day.
Dave “Gooch” Guccione: We could record for days. Anyway. I think the consumer is much better informed. I think the consumer in general, on not just fireworks, but all categories is much better informed. And a better informed consumer is going to make a better choice at the store. But at the end of the day, it’s fireworks. And Chris mentioned it in the very beginning of the podcast. The average US consumer thinks about fireworks 30 minutes a year. And 15 minutes of that is the planning on how to get to the fireworks retail location, and the rest of it is, “Hey, honey, pick up an assortment,” or, “whatever you bought last year was really good. Get that.” I mean, that’s a pretty common statement.
Chris Noland: Right. And I think this past season too, with the cancellation of a lot of the public displays, which is a sad thing to see, but there were a lot of people coming in for the first time to buy fireworks that didn’t know kind of what to get, so they’re educated now a little bit on what they did, and they probably had a great time with that. So we’ll see how that affects this season too. So you may have more buyers of consumer fireworks coming to the stores, which then, it’s all working together, so the getting out early, buying early, and a lot of places you can pre-order, and you can’t pick up until season opens in that location, but I think planning ahead is kind of the key. So I think that’s the goal of this, is to get people thinking about fireworks a little bit earlier. And if they understand kind of what’s going on a little bit, kind of behind the scenes, that certainly helps.
Dave “Gooch” Guccione: For sure. For sure.
Chris Noland: So I think we’re good, man. This is our first one. I think it went well, right?
Dave “Gooch” Guccione: Yeah. I think we got it in. I didn’t talk too, well, I talked too much, but I didn’t talk too too much.
Chris Noland: No, no, no. I think the shocker I have is like a dog collar. All right. “It’s time, Chris, it’s time.” Well, thanks for joining us, everybody. I appreciate it. We appreciate it. Not just me, and we look forward to continuing this and going over some cool topics.
Dave “Gooch” Guccione: Absolutely. And we’ll talk to you real soon. Okay?
Chris Noland: All right. Get loud.
Dave “Gooch” Guccione: All right. See you later.
Chris Noland: See you.
Dave “Gooch” Guccione: Well, that wraps up another Get Loud with Black Cat Fireworks podcast. On behalf of your host, Chris Noland and Dave “Gooch” Guccione, go out and light some fireworks. We will talk to you real soon.