The post-Newtown gun sales boom was nothing less than spectacular. As existing gun owners hedged against fears of new civilian disarmament legislation and newbies joined the fold, gunmakers couldn’t make guns fast enough. Until they could. In 2014, demand slumped by 15 percent, sending firearm prices and margins downwards. It was still a good year, especially compared to, say, five years ago. All of which leaves gun sales . . . growing. Albeit at a slower rate. Until Hillary’s elected. I’m not sure if Dallas-based market researchers MarketsandMarkets put that happy prospect in their calculations, but no matter how they slice it they’re bullish on ballistics. Specifically . . .
Globally, the legal small arms market is forecast to grow from $4.1 billion in 2014 to $5.3 billion in 2020, a compound annual growth rate of 4.2 percent, according to projections in a new industry report from MarketsandMarkets, a Dallas-based market researcher. The projections reflect sales of small arms in the hunting, sport shooting, self-defense, law enforcement and professional markets. (Products include pistols, rifles, machine guns and carbines.)
According to M&M’s forecast, five companies—Sturm Ruger, Alliant Techsystems, Smith & Wesson, Freedom Group and Colt Manufacturing—account for more than 40 percent of the total market. CRT Capital analyst Brian Ruttenbur, who follows the major gun makers, said the U.S. represents 41.2 percent of the legal global small arms business and is the world’s leading exporter and importer of small arms . . .
Ruttenbur also estimates that the current legal, U.S. small arms market stands at roughly $8 billion annually, when including new firearms sales but excluding accessory sales such as gun sights, cleaning supplies, and the like.
Although the growth curve story (via cnbc.com) must be reassuring to the large corporate playas, there’s been some major restructuring in several segments of the market.
The AR biz is no longer monolithic. Thanks to improving manufacturing and marketing technology (go internet!) dozens of small manufacturers have replaced the Colts of the world, offering choice, quality and brand-based boasting rights. The number of relatively small sub-$1000 1911 makers has also increased (e.g., STI plans to double production).
Will consumers be willing to abandon the Remingtons, Mossbergs and GLOCKs of the world in the rifle, shotgun and handgun markets? While Remington has done its best (worst) to alienate consumers and open the door for smaller makers (e.g., Henry Repeating Arms and Savage), the mass customization trend hasn’t hit these genres. Yet. Watch this space.