The Last Word on Hair Hackles…

Okay, we might be flogging a dead horse with more talk on hair extensions and hackle.  But the thing is, Steve Schweitzer wrote a thorough piece on this issue… and we only ran part one.  To read that, click here…

Here is the  “rest of the story,” including a forecast for what happens months down the road from now, and a candid discussion of the lessons the fly industry should learn…

Story by Steven B. Schweitzer

The feather fashion trend may not go away entirely.  There might be a shift in what and how feathers are used.  Incorporating other decorative feathers into clothing, accessories like purses, or jewelry may make a mild comeback.  Using feathers in this manner has been around since feathers themselves. see feather headbands, for example:   Even if there is an appetite to use feathers outside of hair extensions, the smart money stays put.  Following fashion trends can be suicidal for manufacturers not accustomed to doing so.

Fly Shops Participate
Fly shop doors have been swinging overtime to the hair salon traffic.  “Everyone has reaped the benefit, wholesalers, retailers, distributors…everyone” remarked a local Denver fly shop owner, “The real question is when can I get more?”

Not all fly shops are affected however.  Those who are remote and don’t have centers of fashion near them still have product on the wall.  If those fly shops are industrious, they have an opportunity to market to the core business which is the hobby fly tier…or the hair fashion industry… their choice.

Hackle Growers Keep Course
The growers are obviously at the dog-end of the tail-wagging supply chain.  They control the supply.  Typical thinking says if hackle growers don’t react to the market demand, they are missing out.  But it seems all the key hackle growers are keen to the recent demand and are taking advantage of the situation.  With a given limited supply, hackle growers have sold to the fashion industry all that is feasibly available, apparently keeping back core product to service the fly tying community.  And the growers don’t plan on chasing the fad.  With a 12-month product maturation life cycle, it’s not like they can kick up a third shift to make more feathers.  “Any long hackle has been spoken for, for 2011. Anyone [fly shops]who didn’t see this coming and didn’t plan ahead will see some empty pegs for awhile”, said one grower, “ We have made very minor adjustments in our production to accommodate a potential uptick in the future and to keep the fly shop top-of-mind.”

The hackle growers are used to receiving criticism about supply and pricing, that’s commonplace for anyone at the beginning of the supply chain.  But the fashion industry is particularly vocal.  Fashion divas and some industry voices claim the prices have doubled overnight and the industry is holding out inventory.  Wake up critics, this is good ol’ American capitalism working at its finest.  If demand supports it, premium prices prevail.  As I see it, the crime isn’t with hackle growers trying to cash in while the opportunity is hot, the crime is in the 500% markup per feather, the hair salons are charging in response to the same demand…just sayin’.

There’s an outside chance that hackle growers can extend the trend if the fashion industry wants to wait.  If large salon suppliers want to pre-pay a crop of birds, there might be reason to put more birds on the ground to support the trend.  But that’s a big “if”.  Otherwise, hackle growers, with a product maturity lead-time of 12 months, are hesitant to react to this craze with new feather crops.

A long-standing sales imbalance just might be solved for the hackle grower as well.  Each bird yields two primary pelts – a saddle and a neck (cape).  Cyclical sales trends over the years leave hackle growers with excess supply of either.  Rarely do both capes and saddles sell equally.  Now that the saddles are all but gobbled up, the supply of capes should be readily available.  It seems this quick-strike hair feather fad is good news to the hackle grower all around.

Another reason this fad has been good to the hackle growers is the immediate cash offset to lofty operating costs, a price readily paid by eye-lash batting hair fashioners.  The fly tying industry isn’t particularly empathetic to the cash it takes to run a bird operation.  “Nobody has offered to pay my price increase in feed since the IFTD Show in September.  How many companies would survive with a 60% increase in their production costs [overnight]?” asked one grower.  The sudden cash influx to the growers might be the silver lining to this perceived dark cloud.  With skyrocketing operating costs, feather prices have increased to the fly tying community, but the commensurate sales have not been there.  Sales have dipped over the years, in part due to the rising prices of capes and saddles.  But the recent sales to the fashion industry provides needed operating cash to the growers – cash that can be re-invested into keeping the operations alive and well.

There are a few caution areas for the hackle grower, however.

If the core hackle demand is not met for our industry, enterprising tying houses and retailers will quickly supplant the feather with synthetics.  We’ll most likely see more flies made of synthetics over the next year or so until the fashion industry leaves the fly shops.  Synthetic flies typically have better bin and sales appeal too.  Reversing the material usage from synthetics back to feathers may be difficult – and unfilled feather orders from tying houses will leave money on the table.

The other area hackle growers must concern themselves with is the value of long-standing relationships with bulk hackle purchasers.  Entities such as distributors and fly tying houses all consume hackle in quantities that seem unimaginable – thousands of pelts at a time.  Hackle needs don’t go away for these mega-consumers.  If the hackle growers usurp the standing needs of these customers in favor of the quick-strike and short-lived money, mega-consumers will re-consider their allegiances.   One mega-consumer interviewed for this article said “The relationships I have with my suppliers takes precedence and I won’t bother with negotiating prices to save a buck or two, because it doesn’t mean as much to my bottom line as it does to preserve the relationship.  But now, if my business is being supplanted by the hackle growers chasing the quick buck, especially since I’ve been a customer of theirs through thick and thin over the years, then I must re-evaluate where I stand with them.”  Watch-out hackle herders; get ready to sit at the negotiating table again.

The Fly Tying Consumer Benefits
“[The] fashion industry like saddles, fly tiers prefer capes…if you overlook capes as a tier, you will miss some of the best deals of the future”, stated one distributor.  With a unanimous voice, growers, distributors and retailers all believe this won’t really affect the hobby tier who primarily uses capes.  Cape supply should flood the market in the near-term, satisfying the fly tying consumer’s needs.  That is unless the fashion industry takes to capes…and mega-consumers are forced to use capes.   For the near-term however, the hobby fly tier will fair out just fine.  Hobbyists: Stock up now if you need a cape or two.

The Commercial Fly Tying Houses Will See Effects
The commercial fly tying houses will be most affected.  They use capes for the size variety, but saddles tend to be the preferred feather.  Saddle feathers are long and consistent, yielding more flies per pelt, reducing the overall cost per fly.  If the saddle supply is thin, they’ll continue to tie hackled flies, but using capes, which typically yields less flies per pelt.  I wouldn’t be surprised if wholesale prices for hackled flies just might increase over the next year – which will result in a higher price to the end consumer.  Of course, another approach the fly tying houses might take is to limit the number of fly patterns which use hackle, and introduce new synthetic patterns.  Commercial tiers are extremely agile entities and are experts at adapting to the fickle fly market.  This bump in the road is no different.

One commercial fly tying house stated: “It’s a bidding war for hackle right now.  But we were here before, and we’ll be here after, [hackle growers]make sure you keep us top of mind.”

The difficulty is not knowing what will be available and what won’t be – commercial fly tyers need consistency in what they get.  The recent fashion industry raid on saddle hackle pokes a hole in the consistency factor.  “We would like to be in more solid ground to get what we order when we order it and not guess as to what we get” stated the same commercial fly tyer.  Fortunately, in the near term the tying houses are mostly insulated by having good saddle supply…for now.

The commercial tying industry would like to see more supplier parity come of this cash influx to the hackle growers.  The three big hackle growers that supply the industry worldwide are all located in the U.S. – Whiting Farms, Metz and Keough Hackle.  Between them, there is volume disparity with Whiting supplying an estimated 70% of the marketplace.  Commercial tying houses hope this situation helps build parity and stability in the hackle business, but time will tell.

How Should The Industry React?
So, what does this mean for the industry?  The hair-hackle craze is a prototypical “blue ocean” opportunity.  A “blue ocean” (a wide open space with no boundaries) is a previously unknown market that presents itself for opportunity.   The fly fishing industry for the most part is a “red ocean”, a known market space with very little differentiation.  How the industry reacts to this blue ocean opportunity will be the real key to maximizing the long-term benefit for all.  (more on blue ocean strategies: http://www.blueoceanstrategy.com/)

Lesson #1: Resellers, we should to protect and grow our industry by figuring out a way to market similar products to other blue ocean industries – in other words, how do we adapt our recent lessons for future product sales, particularly outside of our little box?  “This should be a wake-up call to the smallest industry in the world”, stated a distributor, “The fashion industry is a multi-billion dollar industry, we have no chance of supplying the fashion industry with feathers…ever.  All the hackle growers in the world won’t be able to keep up.”

As mentioned earlier, fly shops are asking “when can I get more feathers?”  No, I think the real question is how can a fly shop introduce substitute product (that is in good supply) to feed the current fashion craze.  What about long strands of Krystal Flash™ or Flash-a-bou™?  I wonder what would come of some enterprising fly shop producing a quick YouTube™ video showing how to crimp flashy synthetic strands in hair. That’s a blue ocean opportunity.

The fashion crazed salons just may take to placing synthetics in hair in lieu of feathers.  Or, they may accept other types of feathers, not just from chickens.  Or, the feather and synthetics may be once again incorporated into fashion design for products such as purses, clothing and jewelry.  In any case, we should all be on the look-out for new trends to capitalize upon outside our industry – those are the blue oceans for us.

Lesson #2:  Suppliers, stick to your knitting: the core competency of the suppliers in the fly fishing industry is to supply the fly fishing industry, period.  Trying to ride a fashion wave is suicide.  Branching out to sell to other industries should not be at the expense of your core business.  This isn’t to say you can’t sell to other markets, just don’t betray the hand that fed you to this point.  Keeping course to our core competencies is a smart long-term business strategy.

We as an industry should take this recent fad as a kick in the shins and wake-up to other blue ocean possibilities.  Other industries may want what we produce.  Resellers, it is your job to cultivate new market space;  and suppliers, it is your job to feed the demand.  Work united and don’t wait for the new markets to come to us, we should go find them.