Shortages For The 4th

Will:
All right, Dan, it is July 1st happy start of July. We have a new episode of Safety Stock. Everything is to going pretty well. You doing okay?

Dan:
Yeah. I can’t believe it’s already July it’s mind blowing.

Will:
It is mind blowing. It has been going fast, but it’s a great month. People are excited and we’ve got a fun episode today. We are going to talk about 4th of July and the supply chain issues and a couple of bright spots that are coming around regarding the holiday before that. Why don’t we go ahead and get to the news?

Dan:
Well, we’re gonna keep this very 4th of July themed just as where you’re gonna celebrate America’s independence, but as we get to it will, what is your favorite food that you love on 4th of July?

Will:
I’m, you know, there, I feel like all the really good grillers come out. And so people who make a great cheeseburger, like I’m always down on 4th of July. I also enjoy getting to see all the people’s like really good potato salad, because if you have certain people like, eh, they’s okay, but the ones that are like make amazing potato salad, they should be celebrated.

Dan:
Yep. And you know, what a main ingredient that, or kind meant that people put on both of them is mustard. And that is one thing that we’re seeing where there is a possible crisis and shortage coming up with mustard. Hate the seed. Yeah,

Will:
It surprisingly enough. I didn’t know this, but Canada is the main producer of mustard feeds along with the Northern part of the us. And they’ve been having some challenges from a growing environment. And so, yeah, we’re, we’re gonna see a little bit of a squeeze pun intended on the mustard side of things. Hopefully we can get through it just like everything else.

Dan:
Yeah. It’s just one of those things where if you haven’t stocked up on mustard, you got three days run to the store, go get some, if it’s your brown mustard, your honey mustard, your, your classic yellow, which, eh, go for the spicy brown, if you can and get your mustard. So you have plenty in place for when you do your own Nathan’s hot dog eating contests that afternoon.

Will:
There you go. And then Dan also you know, while mustard is having a tough day, Arizona iced tea, still holding strong in this inflationary environment, 99 cents. That’s

Dan:
Pretty good credit to them credit to them for holding firm. I, I do wonder. And will, you may know how much of their supply chain are they bringing from overseas or is it mostly near short at this time? But even with that, you still have rising transportation costs that are definitely probably hitting their margins.

Will:
Yeah, I’m gonna venture and say that predominantly it’s all produced local.

Dan:
Yeah.

Will:
You know, from a can’s perspective, you know, and then like sugars, water, et cetera. I, I think that they’re pretty much domestically produced and they should, and, and that’s good for them because obviously you need to keep your costs down where you can. And then Dan, which leads us to our, you know, our main article, a lot of towns are having issues with their typical 4th of July celebrations, whether it be your neighborhood gathering, the barbecues that you typically have, where everybody’s bringing a dish, you got your guy growing out, doing all the hot dogs, hamburgers, cheeseburgers, et cetera. And the towns that are throwing on the fireworks displays that they have at night. Some of those towns are having to cancel outright, their displays, whether it be from a lack of staff or that they aren’t able to get fireworks in it actually shoot off. What are you some of the issues here, Dan?

Dan:
Yeah. And then on top of that as well, just labor, these, a lot of these cities can’t get enough crew to work the shows or transport the materials. And, and one thing you always see for, from my experience in firework shows, and I’ve done it more so at the beach where there’s a lot of fireworks going on, it’s always a sign for a great economy. It’s cuz people are using discretionary spend to go out there and put on a great display for everyone. But there’s a lot of concerns now just because of the importation from China, most, a lot of fireworks and I I’ve seen numbers range from 75% to 95% of fireworks are imported from China and they just have began easing restrictions, but freight is still travel. Some container costs are higher still than they were three years ago in 2019. When it was a, a great fireworks display out as well. So factor all of those in rising costs as well. Domestic issues. It’s just another, another example of the complexity in supply chain, how fireworks are, are like every other industry they will be impacted as well.

Will:
Yeah, no one’s safe. And I think it’s $2.6 billion are spent on 4th of July celebrations, you know, we’ve seen the data on overall consumer spending was weaker in June. And so it’d be interesting to see if the thought is that less spending takes place on 4th of July, whether it be because of budgets are shrinking with inflation, are they actually able to do it? You know, when you think about planning, you know, these cities have a very similar challenge to what, you know, your everyday business, when you’re producing goods, you know what they have, they have to plan relatively far in advance, making sure that they have the staffing, the goods there in order to hold these celebrations, you know, specifically to fireworks, they may be on a long lead time, similar to if somebody’s producing aerosols, you know, women who cans right now are really difficult to get.

Will:
In addition to that, you know, your second issue that you come into in the manufacturing environment is that if you can’t get specifically what you need, are you able to pivot to something similar? And so in this case, you know, if you’re a city and you’re looking to use, you know, a higher explosive firework than your traditional items and you can’t get that, you can’t just downgrade to a regular bottle, rocket. Those are the people that are gonna be most affected versus, you know, your everyday consumer. You know, if you can’t get a bottle rocket, are you okay with a roaming candle? Are you okay with a sparkler? And so those are some of the issues at play too. And then lastly, Dan, you know, we’ve touched on it. You know, it’s hard to get people in general. It’s hard to get people to, you know, from a staffing perspective, from an wage perspective, similar you’re, you’re having people work these events. And if you wanna be celebrating on 4th of July, do you wanna be working? We see that in place that a lot of places right now.

Dan:
Yeah. It’s temporary workers or seasonal workers. It’s, it’s hard. You have to pay them a lot more than you were paying them last year. Wages continue to, to increase. So something to keep out an eye out for. But one thing that shouldn’t derail is your celebration for, for 4th of July, get out there, kickback rewind, and just enjoy the long weekend that is upon us.

Will:
Yeah. I think Dan, you know, from like a lot of supply chain professionals, they deal with a lot of high stress environments. And they’re often, you know, giving tough news depending on what it is to their partners. They work with. This is a good time unwind. Just make sure you’re not one of the 11,000 people annually that go to ERs related to 4th of July firework issues, you know, make sure you give yourself some extra time to run away after you light the fuse. Don’t hold a firework in your hand.

Dan:
Yeah. And if you guys everyone learn more or on just on safety tips that will has with fireworks, make sure you reach out to us at hello@anvyl.com. And we’ll talk to you guys after the fourth.

Will:
Yeah. Sounds good. Have great holiday.