Rivard Report: The Fourth of July holiday must be the biggest day of the year for fireworks. Or is it New Year’s Eve? Give us a brief tutorial on the fireworks business, which seems to offer a product people only use a few times a year.
Luke Girdley: The retail fireworks industry is based on a seasonal business model. There are two fireworks seasons for us in Texas: one from June 24 to July 4, and another from December 20 to January 1. During this time, it is legal for us to sell fireworks to the general public. However, fireworks can be used in unincorporated areas of Texas on private property with permission of the property owner any time during the year.
In San Antonio, we used to see Fourth of July and New Year’s Eve sales run fairly evenly. Over the past decade or so, the business has shifted more towards New Year’s Eve. In other regions where we are located, such as Dallas, New Hampshire, and Nevada, we find that Fourth of July is the dominant selling season. Most of the sales are done on December 30 and 31, and July 3 and 4. It’s like having four “Black Fridays” per year.
(Editor’s note: Personal use of fireworks is still banned within city limits.)
RR: Give us a sense of what this past week has been like for your company. How many fireworks get bought and fired off in a city of our size?
LG: A good barometer for how our retail business will fare is the number of wholesale customers we have. This season, we have been very busy with wholesale customers, so we expect the Fourth to be very busy. The combination of recent rain and the Fourth being on the Friday of a long weekend point to strong sales. As for the amount of fireworks being bought, all you have to do is look at the skyline around the city during the later hours of the Fourth, and especially approaching midnight on December 31. People enjoy the experience of lighting a fuse and seeing a silent reaction turn into a loud, colorful burst of energy. On the Fourth, it’s a celebration of freedom, and on New Year’s Eve, it’s a celebration of the past year and of what’s to come.
RR: Your company reaches beyond San Antonio to other parts of the state, right? Where else do you operate?
LG: In addition to San Antonio, we have stands and stores in Dallas, Houston, Corpus Christi, El Paso, Abilene, Amarillo, Lubbock, Laredo, New Mexico, Nevada, New Hampshire, and other areas. At our core we are a local, family-owned business that started in Texas and we will continue to expand in our home state.
RR: How do we compare to other cities in terms of our appetite for fireworks, what we buy, what people in other cities buy?
LG: All of our stores are very similar with regard to the types of products we carry, and we have quite a wide variety. Different locations may have slightly different tastes and we adjust our inventory to meet those needs. Overall, we have seen a shift away from smaller novelty-type items like little hens and ground spinners to larger, multi-shot items and reloadables. Ten percent of our sales alone are a specific reloadable customers always come to Alamo for, the Voodoo Balls. Other strong sellers like Big Tex, Stars Over the Alamo, and Ministry of Magic have all fared well and demonstrate our customers’ evolving tastes for bigger, more elaborate items. These are items that do the aerial, fireworks bursts that everybody compares to larger fireworks shows.
RR: Okay, take us beyond firecrackers and sparklers. What’s on the shelf that people love the most? Anything new, cool or innovative, or are fireworks today about the same as when the Chinese invented them a few thousands years ago?
LG: Our suppliers, with our guidance, have continued to evolve our product lineup based on the desires of our customers. We used to carry single or multi-shot items with large, cardboard tubes. The problem with these items is a lot of the weight and volume of the product has nothing to do with the performance of the item; they had strong shelf appeal, but their performance wasn’t as good as it could be. We stopped carrying these items, and have moved towards items that have the legal maximum amount of powder in them, which is 500 grams of black powder, hence the term “500G cake item.” These “cakes” come with a wide variety of sounds, effects, and colors. Advances in production ensure they are consistent and never “duds.” We also try to inform our customers by having videos of products available online and video of products available at the store so the customer knows exactly what they’re getting, rather than guessing what’s in the box. These improvements in quality and service has built brand strength and customer loyalty.
RR: So what does the average fireworks family spend when they stop at a roadside stand? Are there different fireworks for, say, the kids, the teenagers, the adults?
LG: We see all sorts of people at our stands. Some customers will spend thousands of dollars to entertain a large group of friends and family. Others will buy a few hundred dollars and shoot it off throughout the year. We also get customers who buy just sparklers, or just roman candles. In general, most customers will spend around $40-50 and get a little bit of every item. We usually see larger sales in our indoor stores, on average, because of selection and service. Others enjoy the carnival-feel and tradition of buying fireworks from one of our stands. Everyone has their favorite type of firework, and we strive to provide items for every taste. We train our salespeople to explain the proper way to handle fireworks before, during, and after their use.
RR: What if I want to stage my own impressive fireworks party? Can I buy the real stuff? Or do I hire someone like you, an expert, to safely stage a show to impress my friends? Do you guys also do the big public fireworks shows, or is that a different business?
LG: Professionals who do commercial pyrotechnics work in a different realm of the business. We sell consumer grade, 1.4G (hazard division rating) fireworks that are meant to be used by the general public. Most professional shows that you see at theme parks use commercial grade fireworks, which are 1.3G. These shows are typically custom made, very expensive, and require specialized handling and storage. They also require special licensing and training. Fireworks companies usually specialize in either retail fireworks or professional shows. At Alamo Fireworks we focus on consumer grade fireworks. This isn’t to say you can’t get the real stuff from us; we don’t just sell snakes and sparklers. We push the legal limit on what you can buy.
RR: How do you hedge against the enormous risk in Texas of a drought year when it is simply too dry to set off fireworks? Doesn’t it just about kill you when officials prohibit fireworks inside the city or county?
LG: I think we sweat out whether or not it’s going to rain more than farmers and ranchers do (no offense to you AG folks out there!). Reasonably, customers are more comfortable using fireworks when there is luscious green grass with little chance of catching fire. But, we also have to contend with the recent powers given to county judges who can unilaterally declare a “state of disaster” and temporarily single out and ban fireworks during the two major seasons. The law, local government code 351.108, is intentionally vague and offers no guidance to the county judge on when to ban fireworks or at what measurable levels of drought. Provisions in the law allow for evacuations and emergency response preparedness, befitting a “state of disaster.”
However, when fireworks bans have been declared under a “state of disaster”, I haven’t seen the emergency responses or evacuations associated with more visible disasters, like hurricanes or tornadoes. El Paso County, for example, has banned fireworks for three years in a row, citing drought as their reason for doing so. Of course there’s a drought in El Paso; it’s in the middle of the Chihuahuan desert! And while there is a reliable measure for drought indicators, there is no specific measure which must be met before they can declare a “disaster.”
RR: You obviously have your big days of the year, but can people buy fireworks year-around? Are you working year-around or do you have other projects?
LG: Other than the two major seasons and Cinco de Mayo, we cannot sell fireworks at retail. We can, however, sell at wholesale to customers year-round who have a wholesale permit. Additionally, our interstate stores are open year-round and require a certain amount of attention. As a company, we have a couple dozen full-time employees who work year-round. Since the majority of our sales occur in a mad dash over just a few days, we have to plan months in advance to have all of our accounting in order, secure new locations, and maintain hundreds of existing locations. Not to mention, we directly purchase and procure our fireworks, which means we do all of our own advertising, pricing, inventory, and marketing. With only a few months in between each season, there is plenty of work to be done.
RR: Are fireworks still made in China? How do you keep up with the latest products, and how do you make sure the stuff you are stocking is safe and the quality control is there? Do you guys visit the factories?
LG: Nearly all of our products are made in China. The Chinese have a centuries-old tradition of making fireworks, and have kept up with modern demand by innovating new manufacturing methods. We have employees who fly to China during the year to see product demonstrations and make decisions on our product lineup. For quality control, our products pass through AFSL (American Fireworks Standards Laboratory) which tests our products for safety and quality
RR: Does the Girdley family enjoy fireworks, or is that like a chef coming home and preparing an elaborate meal, not so much fun?
LG: We definitely enjoy watching and shooting fireworks, but like anybody who does something all day, the novelty and excitement wear off. We get the most enjoyment when we produce videos of new items for our customers to see online. There’s excitement when seeing something for the first time.
*Featured/top image: An aisle of fireworks at one of Alamo Fireworks’ megastores. Photo by Luke Girdley.