Speaker 1: This is Bloomberg Business Week with Carol Masser from Bloomberg Radio. Nasure,
Speaker 1: what's been all right? It is an iconic song. We're
Speaker 1: talking about the band. The song is the Weight and
Speaker 1: uh I pulled into Nazareth. That has to do with
Speaker 1: Martin Guitars and where the company is based in Robbie Robertson,
Speaker 1: of the band, he revealed, I think a few years
Speaker 1: ago that he was sitting around in his Woodstock home
Speaker 1: with his Martin guitar looking for some inspiration, and he
Speaker 1: looked inside his guitar and saw the words made in Nazareth,
Speaker 1: and so a song and an iconic lyric was born.
Speaker 1: Speaking of iconic, the Martin Guitar Company, they have been
Speaker 1: making guitars for a well nearly two centuries, established back
Speaker 1: at eighteen thirty three. They just announced the release of
Speaker 1: two new guitars as part of the National Association of
Speaker 1: Music Merchants Believe in Music Week's Virtual event, which wraps
Speaker 1: up today. So let's talk about that. Let's talk about
Speaker 1: the iconic guitar brand. Chris Martin, the fourth is the
Speaker 1: c of the Martin Guitar Company. He is with us
Speaker 1: on the phone, not from Nazareth, but from Bethlehem, Pennsylvania,
Speaker 1: and he joins us here on Bloomberg Business Week. Hey,
Speaker 1: nice to have you here, Chris, welcome. Thank you so much.
Speaker 1: So I have to ask you, first of all, are
Speaker 1: you sixth generation for the company running the company? I
Speaker 1: am the sixth generation. I'm C. F. Martin. The four
Speaker 1: two of my ancestors were named Frank for some reason. Okay,
Speaker 1: because I was doing some research and I was trying
Speaker 1: to make sure I had the count right. How are
Speaker 1: you And what's the past year been like for you guys? Well,
Speaker 1: you know, um Pennsylvania, the governor basically shut the state
Speaker 1: down in about a week. So every day which like, okay,
Speaker 1: tomorrow we'll do this, and then tomorrow was like, oh no,
Speaker 1: we're going to do this and this, And by the
Speaker 1: end of the week we were closed. And I thought,
Speaker 1: I said to my colleagues, so I've been through guitar
Speaker 1: booms and busts for a variety of reasons, often economic,
Speaker 1: sometimes cultural, And I said, all right, let's just go
Speaker 1: for a break. Even if we can, you know, we'll
Speaker 1: bring the business down will Unfortunately, you know, we have
Speaker 1: to lay off a bunch of people that will get
Speaker 1: unemployment and we'll go to break even. And then all
Speaker 1: of a sudden, the phone started to ring. And it
Speaker 1: turns out that when people were stuck at home, they
Speaker 1: really wanted to buy a guitar. Did that was that
Speaker 1: April May? Like how quickly did that start? So February March.
Speaker 1: By April we kept petitioning the governors, like, the governor,
Speaker 1: people want our product? Can we can we go into
Speaker 1: the warehouse? Can we just get a half a dozen
Speaker 1: people into the warehouse to ship the product that's on
Speaker 1: the shelf. And they said, okay, only half a dozen
Speaker 1: with protocol, wear a mask, take their temperature, social distancing.
Speaker 1: And then we put together a protocol. You know, we
Speaker 1: have a forty page book out. This is the way
Speaker 1: we're going to reopen the business. And we showed that
Speaker 1: to the State of Pennsylvania and they said, huh, all right,
Speaker 1: you seem to be serious about wanting to get back
Speaker 1: into business. And I think that will help allow the
Speaker 1: State of Pennsylvania to say, hey, some of these firms
Speaker 1: that are really trying to be diligent about the virus
Speaker 1: should go back to work. So I've been working from home,
Speaker 1: but my dedicated colleagues who actually make the guitars are
Speaker 1: in the factory making guitars because we're back ordered. Okay,
Speaker 1: so let's talk about the kind of demand that you've seen.
Speaker 1: You're back ordered. Tell me what normal order is in
Speaker 1: a non pandemic world. Have bit we're like for you guys,
Speaker 1: and then what it's been like post pandemic and everybody's like,
Speaker 1: I'm home, I want to play guitar. So you know,
Speaker 1: from you go from Obama to Trump, Connie has been
Speaker 1: pretty good and so you know, we benefit, you know,
Speaker 1: and people have some discretionary money. But this demand, and
Speaker 1: it's not just Martin. Everyone who makes some kind of
Speaker 1: musical instrument that you can play at home right now,
Speaker 1: they're back ordered. We're all we're all scrambling, We're all like, okay,
Speaker 1: we're trying to catch up. And and the real challenge
Speaker 1: is to allocate the scarce product that we have uniformly
Speaker 1: across our customer base around the world. Well, that's interesting, right,
Speaker 1: because you have global demand. Um, how many give me
Speaker 1: an idea where you know, Bloomberg were into you know,
Speaker 1: how how many guitars and I know you guys have
Speaker 1: a bunch of different guitars, but how many can you
Speaker 1: produce in a week, And it's it all handwork or
Speaker 1: it's a mixture of hand in it's a combination. My
Speaker 1: family's business has always respected technology, and one of my competitors,
Speaker 1: i A will say this honestly, Bob Taylor got to
Speaker 1: jump on us in terms of using computer numerically controlled
Speaker 1: routing machines which really make the early part of the
Speaker 1: manufacturing process very efficient. And we got religion. So I
Speaker 1: often joke when I give a factory toward that my ancestors,
Speaker 1: if they could come back and see the factory that
Speaker 1: lay left me, their head would spin maybe, but they
Speaker 1: are ultimately they are put together by hand, right was
Speaker 1: no one. I don't care where you make guitars. No
Speaker 1: one has invented the guitar put it together machine. And
Speaker 1: we're showing for our folks who are watching on our
Speaker 1: YouTube channel are Bloomberg Business Week YouTube channel. You can
Speaker 1: see some of the manufacturing in the handwork that goes
Speaker 1: into it. I love to get an idea of a
Speaker 1: business like yours. And you say you respect technology, and
Speaker 1: so it's a combination of technology and people putting the
Speaker 1: guitars together. I think you said you get about a
Speaker 1: hundred and eighty five out in a week. Talk to
Speaker 1: me a little bit more about that. Well, we have
Speaker 1: two factories. We have the main mothership, I call it inn.
Speaker 1: You know, my great great great grandfather started his business
Speaker 1: in Lower Manhattan, moved to Pennsylvania, and then early in
Speaker 1: my career Crutton Street, if I recall, if I read
Speaker 1: it right, we opened up a sister facility in let Go.
Speaker 1: I'm Kya Dora, and so at that facility we make
Speaker 1: all of our Martin guitar strings. And we make what
Speaker 1: I'll call a medium priced Martin guitar, and so we
Speaker 1: actually do more volume because the price is lower. So
Speaker 1: we're doing about four units out of that factory a day. Wow,
Speaker 1: that's I don't know where they're all going, but they're
Speaker 1: going somewhere. Well, it's interesting. So what do you expect
Speaker 1: to you, you know, anticipate. I mean, you've got to
Speaker 1: feel good about the demand that we're seeing. You wish
Speaker 1: it was not against a health pandemic. But I think
Speaker 1: one of the things that we ask about a lot
Speaker 1: of businesses is do you anticipate that this continues? Because
Speaker 1: once the world opens up, right, all of a sudden
Speaker 1: we have a lot of challenges for our time again.
Speaker 1: So yes, A good friend of mine, Brian Majesty. He
Speaker 1: and his brother have a trade publication, Music Trades, and
Speaker 1: Brian was involved last week in an event at our
Speaker 1: virtual trade show. And Brian made the prognostation whatever that
Speaker 1: word is. You know, he likes to analyze data and
Speaker 1: then from the analysis kind of tell you what he
Speaker 1: thinks might happen. And he said, I think, okay that people,
Speaker 1: not everyone, but enough people are going to continue to
Speaker 1: work from home, maybe not every day, but often enough
Speaker 1: that they will still want to buy guitars because they
Speaker 1: have some free time. You know, in between work you're
Speaker 1: doing you're doing zoom calls all day. You've got twenty
Speaker 1: minutes break before your next call. And how many times
Speaker 1: have we seen we're seeing you know, someone on TV
Speaker 1: and doing a zoom call and in the backgrounds of
Speaker 1: guitar a lot of times. Yeah, so they pick it up.
Speaker 1: They got twenty minutes to just do something else and
Speaker 1: then go back to work. Well, I have to say
Speaker 1: my husband loves to play guitars, guitart. He has a
Speaker 1: few of them, um, and he's got you can never
Speaker 1: have enough. I know that. That's what he tells me.
Speaker 1: I say that about shoes, and that's why we have
Speaker 1: a happy marriage. Um. But he has a Martin and
Speaker 1: the acoustic sound is just pretty incredible. I think it's
Speaker 1: a bread and butter guitar. Yeah, and it's just a
Speaker 1: beautiful sound. Um. You know it's int thing too that
Speaker 1: I wonder and talk to me because you guys too.
Speaker 1: A lot of things that we've talked about over the
Speaker 1: past years, companies innovating, being disrupted, and I do wonder
Speaker 1: whether it's digital online, if you're seeing you know, you
Speaker 1: grow your business that way even more because of what's
Speaker 1: happened the pandemic. And talk to me too about you
Speaker 1: guys are creating an earth guitar or an environmentally friendly guitar,
Speaker 1: which I think is another bigger trend that's coming out
Speaker 1: of the pandemic that we're all thinking a lot more about,
Speaker 1: especially as the world shot shut down, right and all
Speaker 1: of a sudden there was clean air. We're just so
Speaker 1: the fires in California, like they were just thinking a
Speaker 1: lot more about our environment. So the first question what
Speaker 1: we've seen at the retail level is the retailers that
Speaker 1: already had a robust online presence have done better than
Speaker 1: the brick and mortar retailers. Some do both. Some came
Speaker 1: from a digital world and then did brick and mortar.
Speaker 1: Most came from brick and mortar and did did a
Speaker 1: digital world. But the ones that can do both because
Speaker 1: people are gonna want to go back into a music store.
Speaker 1: There's something about hanging out in the music store, playing
Speaker 1: the guitar, talking to other guitar players, maybe buying something.
Speaker 1: But in the meantime, you can't do that. The other
Speaker 1: thing what I've seen in just in my career is
Speaker 1: that you know, we use these they are called rare
Speaker 1: exotic woods for a reason, and we need to find
Speaker 1: alternatives and we need to take better care of the
Speaker 1: rare exotic woods. And so we've partnered with the Forest
Speaker 1: Stewardship Council and they audit us. They come in annually
Speaker 1: and they want to make sure that when we say
Speaker 1: we've bought this would legally. They come in and they
Speaker 1: say prove it. We want to see the paperwork, we
Speaker 1: want to see the And so that's what the Earth
Speaker 1: Guitar is. It's a way of us saying you can
Speaker 1: buy these rare exotic woods and you can buy them
Speaker 1: legally and correctly, and and that's that's what it's really
Speaker 1: all about. Is there's still a llegal logging going on.
Speaker 1: There's still you know, would that gets sold nefariously. I
Speaker 1: want no part of that. And I don't think any
Speaker 1: guitar should have I don't think anything made out of
Speaker 1: wood should have any illegal wood in it. And so
Speaker 1: there's still a big concern, you know, and you look
Speaker 1: over you know, you look in some parts of the
Speaker 1: world and a hundred dollar bill will buy a lot
Speaker 1: of illegal wood. Yeah, I can imagine that. And listen
Speaker 1: the way of consumers, you know, they care about this stuff,
Speaker 1: and they're increasingly asking the questions for me too as well.
Speaker 1: So what is this? Believe in music Week, it's a
Speaker 1: virtual event. People who are interested in check out the
Speaker 1: NAM side and a m M dot org today and
Speaker 1: this weekend blog on it's free. Um, it's gonna be
Speaker 1: some really good music this evening and tomorrow. So it
Speaker 1: was our we had to pivot. Normally, this week would
Speaker 1: be our traditional big international trade show as part of
Speaker 1: our trade association in Anaheim. Can't do it Right's going
Speaker 1: to happen? And Joe, the CEO of NAM said, Chris,
Speaker 1: I don't want to sit this one out. I said, Joe,
Speaker 1: we can't. He said, if we sit it out, we're
Speaker 1: gonna lose people. We're going to lose the connection that
Speaker 1: our association brings to all of the tribe. And so
Speaker 1: this was our digital show and what it's turned out
Speaker 1: to be. As Joe said the other day, he said,
Speaker 1: you know, it's not the same as a physical trade show,
Speaker 1: but boy, in terms of connecting all of us that
Speaker 1: haven't seen each other in a year, yeah, it's done
Speaker 1: a really good job. Yeah right, and just bringing the community. Listen,
Speaker 1: I've used the word over and over again. Community, but
Speaker 1: it's an important one. Hey, very quickly thirty seconds here. Uh.
Speaker 1: You do a lot of collaborations with celebrities clapped in
Speaker 1: and others. In terms of making guitars. Is there's someone
Speaker 1: you haven't made one with that you'd love to do? Yeah? Absolutely,
Speaker 1: And we've tried and tried and tried. So there's a
Speaker 1: there's a couple of Bob Dylan, Neil Young. Anytime you're ready,
Speaker 1: We're ready, alright, deal and when and when they when
Speaker 1: they do it, you can let us know come on
Speaker 1: back on it and tell us about it. Um listen, Chris,
Speaker 1: thank you so much. Good luck with event, and great
Speaker 1: to check in with you, and I hope we can
Speaker 1: do it again in the future. For well. Chris Martin,
Speaker 1: the fourth CEO of the Martin Guitar Company. We said,
Speaker 1: family run, family owned, joining us on the phone from Bethlehem, Pennsylvania.