1
00:00:02,400 --> 00:00:07,880
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Christmas trees.

2
00:00:08,200 --> 00:00:08,600
Speaker 2: Have you go?

3
00:00:09,039 --> 00:00:11,000
Speaker 1: No, of course not. I buy my Christmas tree honor

4
00:00:11,000 --> 00:00:15,520
Speaker 1: about my birthday, which is early one. Yes, but we've gone.

5
00:00:15,520 --> 00:00:17,560
Speaker 1: I've gone both ways over the years. Because my kids

6
00:00:17,600 --> 00:00:19,840
Speaker 1: were younger, they had some allergies, we would go for

7
00:00:20,040 --> 00:00:22,400
Speaker 1: several years we went to fake tree. I'm kind of indifferent.

8
00:00:22,560 --> 00:00:24,759
Speaker 3: Yeah, we got a bit of both. Do we got

9
00:00:24,800 --> 00:00:27,240
Speaker 3: like we get one real one for the smell and

10
00:00:27,440 --> 00:00:29,640
Speaker 3: one fake one for the downstairs.

11
00:00:29,880 --> 00:00:31,320
Speaker 4: Right five? So let's how you do it?

12
00:00:31,320 --> 00:00:33,040
Speaker 1: All right? It all works out. People have their their

13
00:00:33,240 --> 00:00:37,320
Speaker 1: play there. Chris Butler joints US National Tree Company CEO

14
00:00:38,360 --> 00:00:40,760
Speaker 1: joining us here, I believe from Cranford, New Jersey, which

15
00:00:40,800 --> 00:00:44,720
Speaker 1: is a cool little town there. So Chris talk to

16
00:00:44,840 --> 00:00:49,400
Speaker 1: us about kind of Christmas decorations. What are people doing

17
00:00:49,440 --> 00:00:52,320
Speaker 1: these days? What's different today versus I don't know, ten years,

18
00:00:52,360 --> 00:00:55,120
Speaker 1: fifteen years ago. It seems like people are going nuts

19
00:00:55,400 --> 00:00:56,760
Speaker 1: for Christmas decorations.

20
00:00:57,440 --> 00:00:58,320
Speaker 4: They are going nuts.

21
00:00:58,400 --> 00:01:00,280
Speaker 2: Yeah, and I like what both of you guys you

22
00:01:00,760 --> 00:01:03,320
Speaker 2: switch between the artificial and the reel. We're big fans

23
00:01:03,360 --> 00:01:07,360
Speaker 2: of real as well as artificial. Obviously, eighty percent of

24
00:01:07,480 --> 00:01:14,319
Speaker 2: US consumers by artificial trees, and so you know, the

25
00:01:14,400 --> 00:01:17,160
Speaker 2: reel is definitely the minority. But again, obviously we're big

26
00:01:17,200 --> 00:01:20,080
Speaker 2: fans of trees in general, but you know it's the

27
00:01:21,240 --> 00:01:23,720
Speaker 2: the pre lit now, So trees come pre lit. Obviously,

28
00:01:23,800 --> 00:01:26,120
Speaker 2: there's no mess, they're a lot cheaper, the materials are

29
00:01:26,120 --> 00:01:28,240
Speaker 2: a lot better, there's a lot of functionality with the

30
00:01:28,319 --> 00:01:30,280
Speaker 2: lights that you can get today, and so so that's

31
00:01:30,319 --> 00:01:32,399
Speaker 2: really what we're seeing. And there's a lot of extra

32
00:01:33,600 --> 00:01:36,080
Speaker 2: wreaths and garlands and things being bored as well. And

33
00:01:36,120 --> 00:01:39,120
Speaker 2: I think with the Instagram generation, the show me generation,

34
00:01:39,680 --> 00:01:41,959
Speaker 2: people are really now decorating to kind of show their

35
00:01:42,000 --> 00:01:45,160
Speaker 2: friends and show their followers just how beautiful our homes

36
00:01:45,160 --> 00:01:47,200
Speaker 2: can be. And so you know, as you said, Carolyn,

37
00:01:47,600 --> 00:01:48,920
Speaker 2: they have a lot of trees in a lot of

38
00:01:48,960 --> 00:01:51,480
Speaker 2: different rooms and so you know, maybe the kids have

39
00:01:51,520 --> 00:01:54,400
Speaker 2: a tree now, the kitchen has a small tree putting

40
00:01:54,640 --> 00:01:57,680
Speaker 2: the mantlepiece with garlands and small trees. So you know,

41
00:01:57,680 --> 00:02:02,200
Speaker 2: we're seeing a lot of incremental decorating with a lot

42
00:02:02,240 --> 00:02:04,280
Speaker 2: of different items and in terms of getting back.

43
00:02:04,200 --> 00:02:04,960
Speaker 4: To that swell thing.

44
00:02:05,040 --> 00:02:08,400
Speaker 2: So you're right, the main reason people buy a real

45
00:02:08,440 --> 00:02:11,280
Speaker 2: tree is for that real Christmas smell. We bought a

46
00:02:11,280 --> 00:02:14,520
Speaker 2: company called Sensicles a few years ago and they are

47
00:02:14,560 --> 00:02:18,560
Speaker 2: a scented ornament which smells just like Christmas. So if

48
00:02:18,600 --> 00:02:21,680
Speaker 2: you hang your scentered ornament on an artificial tree, you

49
00:02:21,720 --> 00:02:22,560
Speaker 2: get that real tree.

50
00:02:22,840 --> 00:02:28,600
Speaker 3: That real tree smell as well and noalergies. I'm looking

51
00:02:28,680 --> 00:02:33,160
Speaker 3: at accord on to your website. First thing, holiday magic begins.

52
00:02:33,320 --> 00:02:36,920
Speaker 3: Enter a week, win a gift card, Blackout Friday blowout

53
00:02:36,919 --> 00:02:39,040
Speaker 3: deals up to eighty percent off. How much are you

54
00:02:39,160 --> 00:02:43,239
Speaker 3: having to think about discounting how much amid perhaps fear

55
00:02:43,480 --> 00:02:46,360
Speaker 3: of some that where you're getting your supplies from the

56
00:02:46,400 --> 00:02:47,880
Speaker 3: costs might have to go up in the future.

57
00:02:49,440 --> 00:02:50,600
Speaker 4: Yeah, that's a great question.

58
00:02:50,680 --> 00:02:53,880
Speaker 2: So look, Black Friday through Cyber Monday this year obviously

59
00:02:54,080 --> 00:02:56,480
Speaker 2: is one week later, so the holiday season is a

60
00:02:56,480 --> 00:03:00,919
Speaker 2: week later. So I think every retail ourselves included, are

61
00:03:00,919 --> 00:03:03,720
Speaker 2: really discounting to make sure that we can take it

62
00:03:03,880 --> 00:03:06,120
Speaker 2: kind of capture those sales that we might have missed

63
00:03:06,160 --> 00:03:09,880
Speaker 2: otherwise given the week's delay in terms of the tariffs. Look,

64
00:03:09,919 --> 00:03:14,240
Speaker 2: you know, we've been on a diversification kind of trend

65
00:03:14,280 --> 00:03:17,280
Speaker 2: over the last few years now anyway, trying to diversify

66
00:03:17,320 --> 00:03:20,320
Speaker 2: ourselves out of just one source of manufacturing, which which

67
00:03:20,360 --> 00:03:23,440
Speaker 2: would be China. You know, I think if the tariffs

68
00:03:23,480 --> 00:03:25,600
Speaker 2: go through, who knows what the tariffs will be or

69
00:03:25,639 --> 00:03:27,720
Speaker 2: when they will go into effect, but you know, from

70
00:03:27,760 --> 00:03:31,120
Speaker 2: our standpoint, obviously it's impactful, and so we're trying to

71
00:03:31,120 --> 00:03:34,880
Speaker 2: diversify a manufacturing base between now and you know, now

72
00:03:34,880 --> 00:03:38,240
Speaker 2: in kind of twenty twenty six. You know, the promotional

73
00:03:38,280 --> 00:03:41,800
Speaker 2: things we're doing right now really aren't in answer to that.

74
00:03:41,840 --> 00:03:44,280
Speaker 2: It's really more just to kind of capture those sales

75
00:03:44,320 --> 00:03:47,640
Speaker 2: for this season. But if you are a consumer and

76
00:03:47,680 --> 00:03:49,520
Speaker 2: you're looking for a tree and you're thinking of buying

77
00:03:49,560 --> 00:03:52,520
Speaker 2: a tree or other holiday de corps, this year is

78
00:03:52,560 --> 00:03:54,360
Speaker 2: a great time to buy it, because if those tariffs

79
00:03:54,360 --> 00:03:57,000
Speaker 2: go into effect, prices will definitely go up.

80
00:03:57,040 --> 00:03:57,840
Speaker 4: In the next year or so.

81
00:03:58,160 --> 00:03:59,640
Speaker 3: Can you give us a breakdown of sort of how

82
00:03:59,720 --> 00:04:01,920
Speaker 3: much your supply chain is dependent on China?

83
00:04:02,760 --> 00:04:04,840
Speaker 2: Yeah, it's very large today, so I can't give you

84
00:04:04,840 --> 00:04:06,680
Speaker 2: the exact numbers, but it's very large. But we are

85
00:04:06,720 --> 00:04:09,320
Speaker 2: diversifying out. We've been on this diversification journey for a

86
00:04:09,360 --> 00:04:14,200
Speaker 2: few years now, and so you know, probably by the

87
00:04:14,320 --> 00:04:16,280
Speaker 2: end of twenty twenty six, we could be completely out

88
00:04:16,320 --> 00:04:20,160
Speaker 2: of China, which you know is a significant change.

89
00:04:20,600 --> 00:04:26,040
Speaker 1: So anything particularly the hot cellar this year, Chris.

90
00:04:26,000 --> 00:04:27,800
Speaker 4: Yeah, you know, so it's funny.

91
00:04:27,839 --> 00:04:31,880
Speaker 2: So my wife loves the sparkly trees, the snowy trees.

92
00:04:32,200 --> 00:04:34,400
Speaker 4: And many consumers love those things. But you know what we.

93
00:04:34,360 --> 00:04:38,000
Speaker 2: See year after year after year is that green triangle,

94
00:04:38,120 --> 00:04:40,560
Speaker 2: you know, the kind of the staid, good drink green triangle,

95
00:04:40,720 --> 00:04:46,800
Speaker 2: solid materials, great lights, multi multi function lights. So you know,

96
00:04:46,920 --> 00:04:51,080
Speaker 2: it's not a trend driven it's not a trend driven industry.

97
00:04:51,120 --> 00:04:56,760
Speaker 2: I will say this year disco is back. So who

98
00:04:56,800 --> 00:04:58,720
Speaker 2: doesn't love a bit of disco with their Christmas trees?

99
00:04:58,760 --> 00:05:01,880
Speaker 2: So disco is back. Definitely seeing some sales on some

100
00:05:01,960 --> 00:05:05,640
Speaker 2: of our kind of disco themed items. But again it

101
00:05:05,760 --> 00:05:09,200
Speaker 2: is you know, people still do prefer that traditional green

102
00:05:09,279 --> 00:05:12,520
Speaker 2: tree with either the white lights, clear lights, the multicolor

103
00:05:12,600 --> 00:05:15,080
Speaker 2: or again we have the dual color functionality. So that's

104
00:05:15,320 --> 00:05:16,200
Speaker 2: what we see every year.

105
00:05:16,240 --> 00:05:19,280
Speaker 1: Are you white lights, Caroline? Are you a different colored?

106
00:05:19,760 --> 00:05:22,839
Speaker 3: I think one of ours has multicolored, but I think

107
00:05:22,880 --> 00:05:25,719
Speaker 3: in general I'm a boring person. I like a white

108
00:05:25,800 --> 00:05:28,599
Speaker 3: light with only red and gold vibes going on. And

109
00:05:28,640 --> 00:05:31,760
Speaker 3: then our thing is we collect Christmas decorations from any

110
00:05:31,880 --> 00:05:33,720
Speaker 3: city that we go, so and then you have to

111
00:05:33,760 --> 00:05:35,480
Speaker 3: remind yourself where the hell you've got some of these

112
00:05:35,560 --> 00:05:40,880
Speaker 3: random items. But I'm really interested in not just about

113
00:05:41,360 --> 00:05:43,960
Speaker 3: the idea of what color lights or what you're whether

114
00:05:44,000 --> 00:05:47,600
Speaker 3: you're doing sparkly or disco. But you must be talking, Chris,

115
00:05:47,600 --> 00:05:49,800
Speaker 3: to people in your industry that are doing the real

116
00:05:49,839 --> 00:05:52,239
Speaker 3: tree situation too. How much you're going to have help

117
00:05:52,320 --> 00:05:55,160
Speaker 3: this year by the fact that we're here in the Northeast,

118
00:05:55,200 --> 00:05:58,560
Speaker 3: we've had terrible lack of water, We've had droughts, and

119
00:05:58,960 --> 00:06:01,080
Speaker 3: the local Christmas free tree farms next to me have

120
00:06:01,120 --> 00:06:01,719
Speaker 3: been struggling.

121
00:06:03,120 --> 00:06:05,839
Speaker 2: Yeah, you know, it's a great question. Eighty percent of

122
00:06:05,880 --> 00:06:08,720
Speaker 2: like I said, eighty percent of consumers already by artificial

123
00:06:08,720 --> 00:06:12,039
Speaker 2: trees versus twenty percent of consumers buying the real trees.

124
00:06:12,080 --> 00:06:15,920
Speaker 2: So it's a small market already. And yeah, unfortunately with

125
00:06:16,240 --> 00:06:18,400
Speaker 2: you know, with some climate change or with some just

126
00:06:18,720 --> 00:06:21,480
Speaker 2: weather in general is definitely hurting. Look Oregon a few

127
00:06:21,520 --> 00:06:24,040
Speaker 2: years ago got hit. You know, there's some fungus issues

128
00:06:24,040 --> 00:06:27,279
Speaker 2: in the Carolinas. So it's it's a tough business to

129
00:06:27,320 --> 00:06:29,320
Speaker 2: be in making the kind of doing those real trees

130
00:06:29,400 --> 00:06:32,440
Speaker 2: and look, we're here to pick up the pieces when

131
00:06:32,680 --> 00:06:34,760
Speaker 2: when you know, they falter with some of their supply chain.

132
00:06:35,400 --> 00:06:37,880
Speaker 1: Chris, is there any regionality in your business? Do people

133
00:06:37,960 --> 00:06:40,560
Speaker 1: in the South, I don't know, spend more on their

134
00:06:40,560 --> 00:06:43,279
Speaker 1: decorations per capita than the Midwest or anything like that

135
00:06:43,320 --> 00:06:45,120
Speaker 1: as a pretty standard across the board.

136
00:06:45,400 --> 00:06:46,440
Speaker 4: It's pretty standard.

137
00:06:46,480 --> 00:06:48,800
Speaker 2: You know, we do see the coastal towns going more

138
00:06:48,880 --> 00:06:52,440
Speaker 2: for kind of Christmas by the Sea type themes. But typically,

139
00:06:52,800 --> 00:06:55,839
Speaker 2: you know, our sales are driven by population centers, so,

140
00:06:56,360 --> 00:07:00,600
Speaker 2: you know, very good sales in the Northeast, obviously California, Texas, Florida.

141
00:07:00,960 --> 00:07:05,320
Speaker 2: It's really population driven. We don't necessarily see big regional

142
00:07:05,360 --> 00:07:08,080
Speaker 2: differences in our sales. Anyway we sell, you know, most

143
00:07:08,120 --> 00:07:11,080
Speaker 2: of our sales are online, so we sell through Amazon, Wayfair.

144
00:07:10,720 --> 00:07:12,560
Speaker 4: Home depot based, et cetera.

145
00:07:13,400 --> 00:07:16,520
Speaker 2: And so we really see sales driven by, you know,

146
00:07:16,560 --> 00:07:17,600
Speaker 2: by where people live.

147
00:07:17,840 --> 00:07:19,680
Speaker 1: Hey, Chris, thanks so much for joining us. Really appreciate it.

148
00:07:19,760 --> 00:07:21,880
Speaker 1: Chris Butler, National Tree Company CEO,