Where’s All The Ammo?

Manufacturers Answer 8
Burning Questions

Written By Jade Moldae

2021

Image: Hornady Mfg. Inc.

PART 1 | MANUFACTURERS

Despite being defined by its cyclical nature, the firearms industry — and the ammunition segment in particular — is in uncharted territory. In the past 15 months we’ve endured COVID-induced shutdowns at facilities,insatiable demand in the consumer market, component shortages and a taxed supply chain. Soaring input costs (copper, steel, lead), work stoppages, transportation disruptions and even rising energy costs have all wreaked havoc. Simultaneously, our industry has also added as many as 8.5 million new gun owners.

Any one of these developments on their own would present considerable challenges across the manufacturing, wholesale and dealer channels. Hitting at the same time, it’s created the perfect storm — evidenced by bare ammunition shelves reported across the country.

In this special SI report, we’re examining the current state of the ammunition market from the perspectives of manufacturers, wholesale distributors and storefront dealers. We’ll start at the manufacturer level, with five manufacturers giving their take on the challenges they’ve faced and how they’re meeting them in this moment.

The members of our panel: Jason Vanderbrink, president of Federal, CCI, Speer and Remington Ammunition; Seth Swerczek, Hornady marketing communications manager; Pat Mundy, Nosler VP of sales and marketing; Adam Braverman, sales and marketing director for Capstone Precision Group (representing the Berger, Lapua, SK and Vihtavuori brands in the U.S.); and Charlie Brown, owner of MKS Supply (firearms marketer and importer of BarnauL Ammunition).

1. Where’s The Ammo?

The question of the day, every day, for the past few months: just where’s all the ammo? As the panel here can attest, it’s certainly not from a lack of effort.

“It’s remarkable. We’re up roughly 25–30% in production, and that’s saying something when we were already operating at a very high capacity,” Swerczek said. “Despite the challenges we’ve faced, we’re operating on all cylinders. Our shipping numbers are up about 30% as well. We’re making and shipping more ammo — truthfully — than we ever have before.”

“The industry has done a good job building capacity. But it’s a big ship, it’s going to take some time to pick up speed — it’ll take some time until we’re servicing even more of the demand,” Mundy said. “At Nosler, we’ve set production records for the past few months. There’s still more room to grow and more work we have to do, but that’s what we’re focused on every day.”

“We have increased our output at every manufacturing site for our commercial ammunition products,” Braverman added. “Powder from Vihtavuori, rimfire from the Lapua/SK factory in Germany, Lapua centerfire products from Finland and Berger bullets and ammunition are all being produced in record numbers.”

2. Why Are There Still Bare Shelves?

Comparing recent demand surges — such as those experienced after the tragic school shooting in Newtown (Dec. 2012) and in the run-up to the 2016 election — a defining characteristic of this one is the addition of 8.5 million first-time gun buyers. Vanderbrink shared the challenges of adapting to such a swift injection of new users.

“We’ve had so many new users in such a short amount of time. Certainly, in the prior eight years or so, we added a lot of new entrants but it was spread out over time. It’s great for long-term steadfastness, but you can’t react as fast when you get 8+ million within a year,” he said.

Excessive hoarding, not unlike the “Great Toilet Paper Crisis of 2020,” is another contributing factor.

“Despite the challenges we’ve faced, we’re operating on all cylinders. We’re making and shipping more ammo — truthfully — than we ever have before.”

Seth Swerczek, Hornady Marketing Communications Manager

“It’s a combination of more people buying more ammo than they’ll probably ever use but they’re buying it anyway, which is certainly their prerogative,” Swerczek observed. “The addition of millions of new shooters who need ammo are additive to the buying problems. It’s great to have an expanded base of law-abiding firearms owners, but also added stress to the market.”

“Demand is off the charts. People are stockpiling, creating a situation where there isn’t a lot available on the shelves,” Mundy stated.

While there is still evidence of overbuying, Brown reported consumers are getting back out to shoot.
“Now that it’s spring, we’re actually seeing people buying ammo to shoot, rather than just to sit on their purchase — even with the prices going up,” he said.

Vanderbrink shared a similar observation from the clay shooting sports segment.

“Target ranges are busier than they’ve ever been — it’s good people are getting out and using the product and shooting clay targets, which is nice to see,” he added.

Image: Hornady Mfg. Inc.

3. Will There Ever Be A Return To “Normal”?

Providing an estimate on how long this demand surge will last is anyone’s guess.

“We’ve seen waves in the past, but this is a tidal wave,” Mundy observed. “It’s orders of magnitude bigger and more sustained than anything we’ve seen before — and it shows no signs of abating. The big question mark: does this go on for two, four, ten years or six months? No one knows the answer to that right now.”

“We speculate it will likely not be ‘normal’ for quite some time — it’s very possible it’s another year or two before things really settle down,” Swerczek said.

“Our crystal ball is still very cloudy as to when the supply and demand curve come together!” Braverman added.
Signs point to the supply/demand disparity having an impact on the fall hunting season, according to Brown.

“I foresee a shortage going into fall on traditional hunting ammo, there’s just nothing out there right now. The pipeline is very, very empty — all the way back to the manufacturer,” he said.

The April return of Remington Ammunition, purchased by Vista Outdoor for $81.4 million in late 2020, should bring some relief.

Another source of relief, Brown predicts, is an influx of first-time importers. He anticipates (at least in the short term) these importers will help boost supply — but they are carrying a risk.

“There are a lot of people entering the business and importing ammo from other parts of the world just to try and make a quick buck,” he said. “However, these folks [the importers] paid a lot of money to get it, and some are going to get burned.”

4. Has Any Caliber Not Been Impacted?

Unsurprisingly, calibers popular before the pandemic hit have reached a fever pitch today.

“It’s no secret 9mm is the hot caliber, but 12 GA target loads are in really high demand,” Vanderbrink observed.

“6.5 Creedmoor, 9mm and even .30-06 demand has been off the charts,” Swerczek contended.

So, has any segment not been hit by this demand surge?

“Some of the specialty cartridges, such as 6.5×47 Lapua, etc., are not as heavily impacted, but are still experiencing limited availability,” Braverman informed.

“Dangerous-game calibers are the easiest to find right now — .416 Remington, .450 Nitro and the like. Those calibers haven’t experienced the same levels of demand, which is understandable, given most people with those firearms aren’t shooting hundreds of rounds of the product in their lifetime, let alone in a year,” Swerczek noted.

5. What About Rising Prices?

Rising prices is a shared source of frustration from dealers and end users alike, so I asked our panel to provide some context — they acknowledged costs have increased, and a couple of them shared they’ve even absorbed some of these costs.

“The cost of raw materials is through the roof right now; input costs have certainly gone up on the manufacturing side,” Vanderbrink shared.
“Copper reached a 12-year high. Ammunition makes up about 10% of the lead market, and those prices have also jumped corresponding with increased battery demand in RVs, boats, etc. Paper pulp and plastic, which we use in packaging ammunition, have gone up — a lot of trickle-down effects we’ve tried to mitigate as best we can,” Swerczek said.

6. Impact On Product Development?

While the current emphasis to maximize production without losing quality is understandable, manufacturers are also playing the long game: Innovation will be key once demand “normalizes.”

“Our R&D team has been spending a lot of time aiding the production side; facilitating efficiency and production without sacrificing quality,” Swerczek said. “We still have R&D projects ongoing, but we won’t be releasing a host of new products we can’t support — demand on the current product list is already off the charts.”

“With demand at an all-time high, our main objective is to supply core customers with their proven favorites from each product offering. New product releases will become more prevalent as supply better meets demand,” added Braverman.

“We pay really close attention to what our dealers tell us is trending in the field and from what customers tell us directly.”

Pat Mundy, Nosler VP of Sales & Marketing

Vanderbrink shared Vista and its brands have increased R&D spending over the past year.

“In this demand surge, we’ve doubled down to prepare for future years. In case the market softens, we can offer a plethora of products to end users from the projects we’re working on right now,” he informed.

Mundy shared his team is relying on feedback to continue developing products.

“The questions we’re asking are what’s going to happen when the music stops? Where are we going to be? What do the customers want and what are we going to bring to market? We pay really close attention to what our dealers tell us is trending in the field and from what customers tell us directly,” he shared.

7. Has This Surge Created New Trends?

It remains to be seen what long-term effects this demand surge will have on the future of the ammunition segment, but a couple trends have appeared.

Brown predicts elevated pricing is set to stay, part of which is being brought on by unknowing new users.

“The new ammo buyer doesn’t have a preconceived notion or price point of what a 9mm box of ammo should cost. I don’t think we’re ever going to see a $10 box of 9mm again; it’s going to level off around the $14–$16 price point,” he said. “We’ve established a new baseline — especially for 9mm — of what the market is going to be.”

Product launches may not abound in the short term, but innovation — like Winchester’s
new 6.8 Western cartridge — will be key to developing sales in the future.

Mundy made an interesting observation: Nosler’s ballistic tips that were used for deer in 2019 are being used for target shooting by desperate target shooters, in some cases.

“In this environment, a lot of products are being repurposed,” he said. “It creates some good opportunities, it allows people to see, in our case, how good our projectiles are and they’re good for a variety of uses.”

In a similar vein, Brown shared BarnauL has picked up new customers who maybe wouldn’t purchase steel-case ammunition under “normal” conditions.

“We’ve seen shooters who wouldn’t normally shoot steel case are now buying because it’s at a lower price point, and they’ve been pretty happy with it,” he informed. “They’re finding it’s a great alternative to paying high prices for brass cartridges.”

8. Are There Any Silver Linings?

Despite the obstacles the industry has faced in the past year, there are some silver linings.

For instance, the rise of firearm and ammunition sales resulted in a significant Pittman-Robertson fund boost. Earlier this year, the U.S. Fish and Wildlife Service announced it had distributed $1 billion to state wildlife agencies through the Wildlife and Sport Fish Restoration Program — a $121 million increase over the 2020 apportionment, paving the way for future generations to take part in hunting and the shooting sports.

“The growth we’re seeing is going to help conservation efforts for many, many years,” Vanderbrink observed.

The growth and diversity of buyers over the past year is “awesome” for long-term viability, Vanderbrink added.

“It’s very healthy for our industry to have such a wide variety of new entrants. Interest from women and minorities has skyrocketed; our industry really needed that,” he said.

“We can’t lose focus: All of this increased interest in the sport is a good thing,” Mundy stated. “Is it a rough patch? Sure, but we’re getting more and more people out there who are responsible gun owners, enthusiasts and potential voters. We shouldn’t lose sight of the upside.”

Editor’s Note: Next week, Part 2 of this feature will include the perspective of three wholesale distributors. Have feedback on this article? Let us know: comments@shootingindustry.com.

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