As you would expect, the Nebraska Hornady ammunition manufacturing facility has been a bit busier than usual and has been working hard to deliver on the historic ammunition demand. For many customers, Hornaday is just another ammunition company that focuses mainly on the precision shooter — however, the reality is the company was founded by Joyce Hornady in 1949 on what their banker was quoted as saying, “The ludicrous idea of making precision match grade bullets.” Hornady created the Spire Point .308 bullet, which was the first precision bullet on the market and was the foundation for nearly every precision bullet design that followed.
We had an opportunity to talk with Seth Swerczek, marketing communications manager for Hornady, about the insane ammunition demand over the last few years, what Hornady is focusing on over the next year, and where the market is headed.
Tactical Retailer: I hesitate to ask, but what have the last few years been like for Hornady?
Swerczek: Yes, it has been crazy in the ammunition world with demand at an all-time historic high point. For the most part, our long-term customers have been great, however, we still do get a lot of calls asking the same questions: Where is all the ammunition? Who is buying it all? And, of course, when will my order ship?
Most customers just do not understand the supply side of manufacturing and think that we should just be able to run the machines faster or add more machines or capacity, but it really is not that simple. We just expanded a few years ago and already have been running 24x7 at maximum capacity for several years. For many manufacturers, adding space and net new machines is a very long-term planning cycle with very long-term payback, so most manufacturers do not want to jump into those sizable investments based on what is actually a temporary demand cycle. The net of it is that we are running 24x7 production cycles at 100% capacity already, but the production Hornady does is only one piece of the equation, and even if we could magically produce faster, the incoming raw materials would not permit us to really produce more.
TR: Most of us do not consider the raw materials dependencies of making ammunition.
Swerczek: It really does dictate our production. We play way ahead, and generally, on the raw material side, we are in a good situation with solid long-term relationships with lead and copper, but things outside the sporting market are impacting supplies and costs. Generally, the availability of lead in the market is dictated largely by scrap and recycled lead. Now that there are more longer-running and lead-free batteries in cars, for example, this is contracting the availability of lead. Copper is a publicly traded commodity, and copper demand has increased due to the housing building boom. Brass, being copper-derived, has a similar issue with availability and cost.
Most people just think of lead, copper, brass and primers, but we also have upstream supplier dependencies on paper pulp for our boxes and plastics for our bullet tips and ammo trays. Paper pulp has had a tariff, increasing cost, and the panic demand for things like toilet paper significantly impacts everyone’s ability to get paper- and cardboard-based products. Similarly, the plastic industry was hit very hard with all the medical, mask and plastic shielding demand. At one point, we had to switch to a more expensive white cardboard for our boxes instead of standard cardboard. All materials have had a price increase and in the last few years have required a lot of management to assure we remain producing at full capacity.
As you see in almost every demand spike, primer and powder manufacturers put the ammunition manufacturers first in line, which means reloaders just are not going to see much on the market until things recover a bit more. Primer use in products is managed very closely with vendors, and there is a lot of thought on where available primers would be best used in the production of certain products. It does increase our testing, but this attention to detail assures quality and performance remain consistent for the shooter, even if we had to use a different primer than before. We also share some components, like our FTX-based rounds or American Gunner and Black series, where the difference may be just the powder or primer to offer a lower-cost option.
TR: How is Hornady fulfilling orders?
Swerczek: I think the right answer is as fast as possible. Seriously though, we are still fulfilling orders in as fair a way as we can and attempting to get everyone at least some of what they have ordered. Customers and dealers can be assured that inventory is going out the door almost as soon as it is packaged.
We have some military and government contracts, however, those are a very small part of our production. The reality is that the government does not want to store large columns of ammo and would rather just have us ship when they are in need. We are also doing far fewer bulk orders overall and instead focusing on standard boxed SKUs.
TR: Looking back, the 2018 expansion was a great idea for Hornady.
Swerczek: It was, and we were cramped and out of space at that point from just organic growth. The 2018 expanded facility is well over 100K additional square feet and allows a lot more space for ammo reloading, inspections and a more advanced ballistics laboratory. It also allowed us to move around and optimize the speed and manufacturing efficiency of equipment we had and make room where needed for additional equipment.
TR: Has all this demand put a hold on the product development R&D cycle?
Swerczek: We are still very much continuing product development, but in good conscience, we cannot launch new products with the large backlog demand for current products. Hornady does have some very exciting new things coming as soon as demand levels out.
The upside of the ammunition demand is that we have had an opportunity to almost relaunch a lot of the products from 2019 and 2020, such as the subsonic .45-70, .30-30 and 300 Blackout rounds. We have more and more people shooting and enjoying the mild report of the subsonic rounds in everything from old guns to short-barreled MSRs. Our team made great hunting bullets that expand reliably at lower velocity to still take game. The handgun hunting line was another project out of R&D that was a line of very powerful hunting handgun rounds that are designed to perform well on game, with a hard-hitting and deep-penetrating bullet design that is lead-free. Another previous release we are happy to get into market is the Boredriver FTX bullet for the inline modern .50-caliber muzzleloader. It is a game-changer muzzleloader bullet that we want to get a lot more in the market to support hunting seasons.
The much anticipated 6mm ARC is in full production with a machine that has been running since its release. This is a really interesting cartridge, and we expect sales to really jump once ammunition production levels out. The 6mm ARC will fit in a standard AR-15 frame with a .223-length round that matches or exceeds the ballistics and accuracy of the .308 Winchester. A lot of what we did was find the right bullets, and the long and skinny 6mm bullets are a lot more efficient than the .308 ammo. With the DOD contract in place and a lot of industry excitement, we fully expect this to be one of the hottest future hunting and precision rounds on the market.
TR: What other products have been growing?
Swerczek: With more shooters on the market comes a net new demand for security products. The widespread feeling among many shooters is that weapons should be secured when not in use. Our acquisition of Snap Safe in about 2016 has allowed us to add a much-needed engineering team to the Snap Safe team and offer a new expanded line of RFID safes, as well as the Snap Safe product lines.
With the shortage of ammunition, we have seen growth in the reloading segment; we are getting a new set of reloaders that were not reloading before. The volume of all the base dies and presses have increased, and we have upgraded our M2 Digital Bench Scales and small G3 1500 digital scales.
TR: When will things return to normal?
Swerczek: This is the question everyone’s been asking. We are starting to see a bit of light at the end of the tunnel [when this interview was conducted in mid-June]. Suppliers and raw materials are starting to flow again at pre-COVID levels, which means that everyone should be at a full uninterrupted manufacturing capacity. Our guess is that we should see some level of regular stock back on the shelves by the end of the year with some level of normal demand next year. It all depends on how politics influences the market.
