As expected, Ruger had a very good 2020. You can read all the specifics in yesterday’s edition, but there’s not any doubt that sales increases of $150 million dollars over 2019 (not a bad year) confirmed the runaway demand that has the entire industry scrambling to try and meet demand.
In a conference call with analysts yesterday, Ruger CEO Chris Killoy was quick to credit “historic demand” for a portion of the company’s success, but he also didn’t ignore the opportunity to remind industry observers in the financial world that Ruger didn’t have a record year simply because of demand.
Instead, he was quick to credit the company’s 1800 employees for their dedication, hard work, and adhering to the Covid-19 safety protocols Ruger has successfully employed to keep all their facilities running. Those protocols, Killoy said, added something on the order of $3.5 million to operating costs, but the company unhesitatingly made the investment in order to keep their 1800 member “family” safe.
Speaking of that growing family, Killoy recounted how the company froze hiring through the initial shutdowns of the pandemic, only to resume hiring mid-year. In 2020 Ruger added 250 new full-time employees (they don’t hire temps) across their facilities, and still has openings.
As has come to be expected, a significant part of Ruger’s sales this year came from new product like the 5.7 pistol, the LCP .22 LR and their Wrangler .22 rimfire revolver. Demand for the Wranger, Killoy proudly admitted, “surpassed our wildest expectation.” While the new products provided twenty-two percent of 2020’s sales, 2019’s new products accounted for twenty-six percent of the year’s sales. That, Killoy explained, was attributable to a combination of factors, including the fact that Ruger “ages” products out of the “new” category after 24 months. That took several of their still-popular guns out of the “new” mix.
If you’re a Marlin lever-action fan, the call had some very good news.
When Ruger purchased Marlin’s assets in the Remington bankruptcy, there was the small matter of relocating what Killoy described as “100 tractor trailer loads of inventory, parts, and manufacturing equipment” to Ruger’s facilities. Now, Killoy says, Ruger’s methodically evaluating the equipment, looking at “every part for every Marlin rifle” and integrating the manufacturing into Ruger’s manufacturing cell model.
Now, Killoy said, Ruger plans to be offering centerfire Marlin lever-actions into the marketplace before the end of the year. Plans include the Marlin 1984, 1985 and 336 models initially, with the Model 50 .22 semi-auto coming at some point after that.
Interestingly, these long-established rifles will become part of Ruger’s new product offerings.
As far as the nuts-and-bolts of the manufacturing business, Killoy says Ruger’s supply chain seems sold at this point. Since Ruger firearms are “100 percent American made” there are no concerns regarding the new administration’s potentially taking some sort of action to limit imports of guns, gun parts or component. With their own foundries, MIM manufacturing and woodworking, in addition to $140 million in cash and no debt, Ruger remains one of the industry’s best positioned companies.
How to position your company for success is a challenge every management group faces.
A key to success is understanding your customer. Defining a customer is a tough job- and making the mistake of trying to identify and target your “average” customer is, essentially, a guarantee that you will fail.
Why’s that? Because, as was pointed out yesterday in a call by Rob Southwick of Southwick and Associates, there’s no such thing as an “average” customer.
“Average” customers are only hypothetical.
“Consumer segmentation is important,” Southwick said, “people buy to satisfy their own internal needs and desires.”
Those, as we all know, are as unique as our fingerprints. And your customers leave their fingerprints all over your business. You just need to look for them.
According to some research insights Southwick shared, many of us need to consider reshaping our baseline assumptions when it comes to firearms and consumers.
The largest growth groups for new gun buyers, for example, fall into two groups: 25-34 year old young adults and women. Notice they are growth groups, not the largest numbers overall.
Neither fit the image many have of “typical gun owners.” OFWG is no longer applicable.
Yes, some gun owners are old, fat, white and guys -but a lot of the new gun owners check none of those boxes.
Their “internal needs and desires” are different.
Some are looking to get into hunting, others want to compete in shooting sports; others may have been motivated to buy a gun because they’ve been shaken by something they’ve seen or experienced in their personal lives.
Their decision drivers may be decidedly different. But they’re all looking for knowledge and help in becoming proficient. Ignoring that before- or after- the sale can have a long term impact.
Last year, the highest percentages of growth came from hand loading (up more than 90%) and airguns (up 44%).
“Traditional” ammunition is scarce, so some are learning to load their own. But, as Airgun Wire editor Tom McHale delights to point out “air is plentiful, and shelves are full of pellets.”
So some consumers are turning to airguns for a variety of reasons, from practice to full-on, high-powered airgun hunting.
Figuring out your best positioning for business success isn’t easy. It never has been. But in today’s environment, it’s not an option.
Talk to your customers- constantly.
Ask them what they want - then deliver it as best you possibly can. Do that, and you’ll find them eager to help you succeed.
We’ll keep you posted.