Year: 2021

It’s going to be an interesting year. Already we have supply shortages on chicken affecting many fast-food chains. A labor shortage is affecting many restaurants and quick-service establishments and many small businesses. If you are looking forward to the summer days ahead and cooling off by the pool you may want to get your chlorine now as chlorine will be another item that will be in short supply this summer. Gas is expected to climb higher as summer travel is already well underway, and a shortage of steel is currently driving up appliance prices on average about 12% while the cost of steel itself has increased 300%. If you want to build a new home the drastic increase in lumber prices and labor rates will cost you an extra $37,000 when compared to last year. Prices on many materials are about to go up significantly largely driven by supply chain issues and manufacturers that can’t meet consumer demand. Most of these issues are directly or indirectly related to government stimulus in the wake of COVID 19. Like everything else the fireworks industry is facing significant shortages for this 4th of July Season. You can read all the details as to why prices are skyrocketing and why there will be major shortages in our prior blog post. Be sure to check it out! Now that the season is drawing closer, we can clearly see what is going to be in short supply this year. Before we get into the details keep in mind that shortages will vary from region to region and this post is simply looking at the overall industry. There is no doubt there will be supply shortages on every product produced this year since factories do not have the production capabilities to meet current demand and factories were closed significantly longer this year leaving fewer days for production. Finally, major supply chain issues will delay hundreds of containers of fireworks which means a significant amount of product will not arrive in the US until after the 4th season. Most importers are reporting that they will only receive about 50 to 70% of what they ordered. Looking into the crystal ball, the following are the top 5 products we believe will sell out quickly industry-wide this season as supply is extremely limited:

Honorable Mention 

200 gram multishots:

When you walk into your retailer of choice this season you should be able to find a decent amount of 200 gram multishots. However, retailers will have less variety and value items like 96 shot pearl, garden in the spring, blue stars with report, and other inexpensive 200 gram multishots are in very limited supply. Most distributors have been sold out of these items for a long time now.

#5 – New Products:

Most factories were not able to produce any new items this year as they barely had enough time to produce their staples/best-selling products. So that item with a new effect or that new finale or shell kit you desperately wanted will likely be missing on the shelf this year. Any new 2021 items that were produced will probably arrive after the 4^th.

#4 – Large Bore Roman Candles:

If you are like us and love a GOOD roman candle that shoots like a 200 gram multishot well you may be disappointed this year. Most large-bore roman candles did not get produced this year and distributors sold out in January. If you happen to find some be sure to grab a pack or two!

#3 – Firecrackers:

You should be able to find strips of 50s and 100s this year but rolls of 1,000, 2,000, 8,000, 16,000 will likely sell out quickly. Retailers have a very short supply of these items. Unfortunately, many firecrackers will not make it in time for the season. Moving forward factories will be making less and less novelty items, bottle rockets, and firecrackers as these items are not very profitable. We expect supply issues to exist on these items indefinitely.

#2 – Artillery Shells:

Most retailers will be able to carry 60gram canister shells however you will see a significant price bump on shells in general due to the dramatic increase in cost of shipping (up to a 300% increase in cost). Factories were not able to start producing artillery shells until mid-March this year and with the supply chain issues importers only had a little over a month to get their artillery shells on the water. Items like black box, festival balls, and any other value shells still haven’t shipped and will not make it in time for the season. Distributors have long been sold out of these items so any value shell this year will be an exceedingly rare find.

#1 – Assortments:

Factories made very few assortments this year and moving forward we expect assortments to be in short supply indefinitely as factories would rather make more profitable items like 500 gram finales and canister shells. We expect to see more distributors making their own assortments here in the US as supply over the next few years dwindles. Don’t be shocked to see empty shelves where assortments once were stocked in abundance.

What should you do?

It is very simple you should shop early this year. The busiest days of the fireworks season are July 3^rd and 4^th which will fall on Saturday and Sunday this year. Stop by your retailer on the way home from work during the week when there are no lines and plenty of selection to chose from. As the 3^rd and 4^th draw near this year fireworks in general will sell out quickly.

Is Xtreme Fireworks prepared? The short answer is: Absolutely! We import as well as buy from many distributors to supplement our inventory. We are open all year so selling out of fireworks isn’t an option for us. In fact, we are well stocked with roman candles, bottle rockets, assortments, a wide variety of artillery shells, 500 gram cakes, fountains, 200 gram cakes and plenty of our customer favorite super finales. But, just like every other retailer some products will sell out and shopping early this year will give you the best chance that your favorite item of yours will be in stock. Prices right now are the lowest they will ever be so shopping in early June will save you a ton of cash. As imported items land prices will go up.

By: Chris Reese

“It’s always something”, is the saying every year for consumer fireworks retailers. For 2020 we had to deal with COVID-19, industry shortages, and regulation changes in China that would most certainly increase prices and availability of items for 2021. There are always delays, issues with the supply chain, and constant threats to move the industry into chaos. But what transpired in 2020 set off a chain reaction that will have substantial negative implications for the industry for years to come. No doubt this will be the most challenging year in the history of the consumer firework industry and will likely alter the industry forever. Listed below are the 8 reasons why retailers and consumers should be genuinely concerned.

• Metal Cages and The Reclassification of Larger Consumer Items

In a surprise announcement last year China arbitrarily decided that any firework with a tube size of 30mm or greater will be reclassified as 1.3 professional fireworks. As a result, these items will have to be wrapped in a metal cage significantly increasing their cost. The bottom line is these items will be so expensive that they will be met with price resistance from the consumer and will most likely be phased out of production soon. Fireworks with low shot counts (large shells) offer unmatched performance in height, special effects, and break size. Those massive breaking effects that people love to see will price themselves out of the market and fade into history. Be sure to check out our October 2020 blog post to get all the specific details on how reclassification will change the product and industry forever.

• US Port Delays

As of this blog post ships full of containers are wandering in the ocean off California waiting to doc. There is a tremendous back log as the ports are short on workers due to the pandemic. Unfortunately, that shortage extends into the entire supply chain from rail and freight. What normally takes about 2 weeks to receive a container once it hits the port is now taking up to 2 months. This problem is not unique to the fireworks industry. Now more than ever consumers are shopping at Amazon, Walmart, and other big retailers online in the comfort of their homes. As retailers are seeing diminished stock, they are submitting some of the largest orders in history. With a depleted supply chain, it’s causing a traffic jam of epic proportions. Specifically, for consumer firework retailers, containers must be shipped by early April or its likely they won’t be delivered in time for the July 4^th season which is devastating because the July the 4^th season accounts for 60 to 100% of yearly gross revenues.

• Limited space on shipping vessels

Delivering your container once it hits the port is one thing, but actually getting it on the boat and shipping it to the US is growing more worrisome by the day. Shipping vessels can only set aside a small amount of space to ship hazardous materials. Since consumer demand is at an all-time high, space for any consumer goods is extremely limited. Of the limited space available for consumer fireworks TNT has a pact with the Chinese government and therefore 50% of the limited shipping space is monopolized by one company. As a result, many importers, wholesalers, and retailers are worried that the product won’t arrive until after the 4^th this year and this has created a bidding war to get companies’ orders shipped before the window of opportunity passes.

• Shortage of shipping containers

With a dramatic increase in demand from China, retailers are experiencing severe delays in transit times. Unfortunately, this means that many of the containers needed to fill orders from China are tied up in the US. The fact is there is a huge trade imbalance with China, so the containers are sitting in the US waiting to be filled with US goods to be exported. However, with little exports shipping to China, empty containers are piling up in the US. With no empty containers available in China fireworks can’t be shipped to the US.

• Short production season

With product piling up and hitting capacity in the factory warehouses due to the logistical issues stated above, factories were forced to close 10 days early this year for Chinese New Year. This means when the factories open back up in March importers/retailers will only have four weeks to get product produced and shipped in order to receive it in time. A shorter than usual production season means certain products will not be manufactured and other fireworks will have lower supply quantities. Combine that with the largest orders in consumers fireworks history because of historic inventory lows at wholesaler warehouses, Chinese factories will not be able to meet demand.

• Bidding wars

Its not a secret that China’s economic activities are somewhat scrupulous, and you can get just about anything you want if you’re willing to pay the price. With historic demand shipping has become a bidding war with various importers willing to pay as much as 200% to 300% more in shipping costs just to ensure their product finds its way onto a shipping vessel in time for the July 4^th season. As we get closer to the season there is no doubt that the war will rage on and shipping costs will only escalate.

• Value of the US Dollar

Unfortunately, the flood of economic relief and stimulus in the US had devalued the US dollar. With the pandemic still raging in the US, we have had a much more difficult recovery than China. So far in 2021 COVID-19 has had little impact on the Chinese economy. As a result, the US dollar has weakened against the Yen. Further weakening is expected moving forward driving up product costs about 10-15% over what was expected in 2020.

• Impact on the industry and consumer

As I write this article prices are rising almost weekly and supply in the US is at an all-time low while consumer demand is at an all-time high. Containers loaded with fireworks are trickling in and while the industry expects shipping volumes to increase in the upcoming weeks there is limited space available which means wholesalers/retailers/importers expect to receive only 60 to 80% of their orders. What arrives before the 4^th is still up for debate. But regardless this is going to come at an enormous cost to the consumer. Retail prices across the country should rise about 30% to as much as 100% on some products.  That means that consumers who spend $100 in fireworks every 4^th of July will probably on average get about $50 to $70 worth of fireworks that they normally purchase. Unfortunately, if supply is significantly less than projected prices may increase as much as 40% to 150%!

So, what should you do if you plan to buy fireworks this year?

Shop early: Shortages will mean that products that are normally well stocked will be in short supply and as the season gets closer prices will only continue to increase. Fireworks don’t have a shelf life so stocking up now will save you some serious cash.

Contact your retailer in May: By late April or early May your retailer will have a good grasp on what products will arrive in time for the 4^th season, the % of price increase, and what will be in short supply.

Pay in cash: Retailers won’t be motivated to offer huge discounts or special promotions this year due to the increased cost. But cash is always appreciated due to high credit and debit processing fees which means your retailer might be willing to cut you a better deal when paying with cash.

How is Xtreme Fireworks Prepared? In regard to Xtreme Fireworks we expect some minor price increases this year but we are well stocked for the upcoming season and do not expect any significant shortages on product availability.

In an upcoming blog post I will explore how this will continue to impact the consumer fireworks industry in the future. Unfortunately, there is even more turmoil ahead as more volatility is expected.