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Anderson: At 100, Federal looks ahead while churning out ammunition

Minneapolis Star Tribune logo Minneapolis Star Tribune 3/12/2022 Dennis Anderson, Star Tribune

Federal ammunition of Anoka is 100 years old this year, a hallmark achievement.

Now one of seven ammunition or ammunition-component brands owned by parent company Vista Outdoor of Anoka, Federal's plant operates 24/7 producing ammunition for hunters, law enforcement and governments worldwide.

Founded in 1922 by Charles L. Horn, Federal, which employs about a fourth of Vista's 6,000-strong workforce, has enjoyed an innovative and ultimately successful first century.

Horn initially distributed Federal's ammunition at barber shops, gas stations and grocery stores, and by 1930 Federal's workforce had swelled to 500.

The company's output grew exponentially with the onset of World War II. In 1941, Federal was contracted by the U.S. government to build and operate the Twin City Ordnance Plant in New Brighton. When the plant closed in 1945 (before opening again during the Korean and Vietnam wars), it had produced 5 billion rounds of ammunition for WWII, far exceeding the 1 million originally requested.

In 1951 Federal began producing primers for reloaders, and in 1960 it was the first ammunition manufacturer to color-code shot shells by gauge. In 1973, Federal was the first company to produce steel shot shells.

As Star Tribune business reporter Patrick Kennedy chronicled recently, Vista's ammunition producers increased third-quarter revenue by 60% to $460 million, while gross profit jumped 123% to $178 million.

In total, Vista's 39 outdoors brands increased the parent company's third-quarter net income by 50%.

President of Vista ammunition is Jason Vanderbrink, 42. A native of Michigan and a lifelong hunter, Vanderbrink joined Federal in sales 17 years ago and has been president since 2017.

Vanderbrink has appeared on YouTube recently attempting to dispel rumors and "conspiracy theories" about ammunition shortages that have affected hunters, target shooters and reloaders.

In the interview below, Vanderbrink addresses that issue among others.

Q In addition to Federal ammunition in Anoka, Vista's ammunition and ammunition-component brands include Alliant Powder, CCI, Estate, Remington, Speer and Hevi-Shot. How large is the customer base of hunters and target shooters for these businesses, compared to other clienteles such as military and law enforcement?

A We don't break that down publicly. I will say the shooting and hunting segments have been increasing significantly.

Q Is high school trapshooting contributing to the increased demand for ammunition?

A High school trapshooting has seen phenomenal growth. We've supported it nationally for 15 years, and we employ a person who deals with the schools to ensure they have access to ammunition. We allow youth shooting teams to order ammunition twice a year. It might be a team in Minnesota, Utah, Florida or any other state. We do limit how much each team can order. The coach has to make the order and of course it has to be verified. But the last thing we want is these students to be unable to find ammunition. Whether it's hunting, hiking, backpacking or whatever, we think it's extremely important to get kids outside. To enjoy the outdoors. We also support 4-H and other youth programs. We have one employee and that's all he does. Sometimes we give ammunition for their retreats. Sometimes we give money to their national organizations. We make an effort to donate to programs that support shooting and conservation.

Q Ammunition has been challenging to find in recent years. Why?

A It's been a perfect storm. Social unrest resulted in an increase in sales of firearms and ammunition for personal protection. Then the shooting sports started growing. And during the pandemic we've seen hunting-license sales gain momentum. The demand side of the business has been very challenging. In response, our manufacturing plants are running seven days a week.

Q Vista's acquisition in 2020 of Remington ammunition, located in Arkansas, and the purchase last year of Hevi-Shot, in Oregon, significantly expanded Vista's sporting ammunition production.

A Remington ammunition is heavily focused on the recreational shooting and hunting markets. It had run into financial difficulties, and we were able to purchase its ammunition brands and manufacturing facility. Hevi-Shot, meanwhile, is a premium brand that is big in non-toxic ammunition. Its acquisition immediately expanded our product line in that category.

Q Do Remington products overlap Federal's? Are they distributed differently nationwide?

A Some categories overlap and some are complementary. Remington, founded in 1816, is a much older brand than Federal, of course. There are pockets throughout the country where some brands are stronger than others, but both are sold in all 50 states.

Q Nontoxic ammunition is on the minds of some lawmakers, among others, who argue that lead ammunition should be phased out. What's Vista's position on such proposals?

A Our job is to give consumers as many choices as we can. We don't make the laws. We are aware of nontoxic initiatives, notably in California. The big picture is that nontoxic ammunition is considerably more expensive than lead to make. As a business, we want to maintain competitive prices so our ammunition can continue to be purchased by people who want it. We don't want to see demand go down. By law we pay an 11 percent federal excise tax every time we ship ammunition, and those millions of dollars are returned to the states to support conservation. If our sales go down because our prices go up, conservation loses. As I said, our job is not to speculate about what the government might do but to serve our customers. I will say it would be a monumental task to change entirely to nontoxic, and in the end it would hurt conservation.

Q Considering the amount of ammunition Federal and the other Vista brands produce for firearms ranging from handguns to muzzleloaders, your supply-chain demand for plastic, brass, steel, powder, lead and other components must be challenging.

A Our supplies come from all over the world. But the lead we use at Federal in Anoka is sourced almost entirely in Minnesota from recycled car batteries. But you're correct. Like many businesses right now, for various reasons, our supply chains are stressed.

Q Aside from considerations of toxic and nontoxic, do you see shotshells changing considerably in the future? So many advancements have been made in hulls, wads and, partially as a result, muzzle velocity. It would seem few improvements remain to be made.

A All ammunition has changed a lot in the last 20 years. But we're always looking at ways to improve performance. We strive to be the leader in innovation, and I think you'll continue to see improvements in the next 20 years. It could be with the propellent, the wad, the shot, any of it. We have engineers in different disciplines. Some are chemical engineers, some are mechanical. Common to each is their love of the outdoors, hunting and the shooting sports. They're constantly looking at how we can improve our ammunition.

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