Martin on Environmentally Friendly "Earth Guitar"

uh I pulled into Nazareth. That has to do with Martin Guitars and where the company is based in Robbie Robertson, of the band, he revealed, I think a few years ago that he was sitting around in his Woodstock home with his Martin guitar looking for some inspiration, and he looked inside his guitar and saw the words made in Nazareth, and so a song and an iconic lyric was born.

Speaking of iconic, the Martin Guitar Company, they have been making guitars for a well nearly two centuries, established back at eighteen thirty three. They just announced the release of two new guitars as part of the National Association of Music Merchants Believe in Music Week's Virtual event, which wraps up today. So let's talk about that. Let's talk about the iconic guitar brand. Chris Martin, the fourth is the

c of the Martin Guitar Company. He is with us on the phone, not from Nazareth, but from Bethlehem, Pennsylvania, and he joins us here on Bloomberg Business Week. Hey, nice to have you here, Chris, welcome. Thank you so much. So I have to ask you, first of all, are you sixth generation for the company running the company? I am the sixth generation. I'm C. F. Martin. The four two of my ancestors were named Frank for some reason. Okay, because I was doing some research and I was trying

to make sure I had the count right. How are you And what's the past year been like for you guys? Well, you know, um Pennsylvania, the governor basically shut the state down in about a week. So every day which like, okay, tomorrow we'll do this, and then tomorrow was like, oh no, we're going to do this and this, And by the

end of the week we were closed. And I thought, I said to my colleagues, so I've been through guitar booms and busts for a variety of reasons, often economic, sometimes cultural, And I said, all right, let's just go for a break. Even if we can, you know, we'll bring the business down will Unfortunately, you know, we have to lay off a bunch of people that will get unemployment and we'll go to break even. And then all

of a sudden, the phone started to ring. And it turns out that when people were stuck at home, they really wanted to buy a guitar. Did that was that April May? Like how quickly did that start? So February March. By April we kept petitioning the governors, like, the governor, people want our product? Can we can we go into the warehouse? Can we just get a half a dozen people into the warehouse to ship the product that's on

the shelf. And they said, okay, only half a dozen with protocol, wear a mask, take their temperature, social distancing. And then we put together a protocol. You know, we have a forty page book out. This is the way we're going to reopen the business. And we showed that to the State of Pennsylvania and they said, huh, all right, you seem to be serious about wanting to get back

into business. And I think that will help allow the State of Pennsylvania to say, hey, some of these firms that are really trying to be diligent about the virus should go back to work. So I've been working from home, but my dedicated colleagues who actually make the guitars are in the factory making guitars because we're back ordered. Okay, so let's talk about the kind of demand that you've seen. You're back ordered. Tell me what normal order is in

a non pandemic world. Have bit we're like for you guys, and then what it's been like post pandemic and everybody's like, I'm home, I want to play guitar. So you know, from you go from Obama to Trump, Connie has been pretty good and so you know, we benefit, you know, and people have some discretionary money. But this demand, and it's not just Martin. Everyone who makes some kind of musical instrument that you can play at home right now,

they're back ordered. We're all we're all scrambling, We're all like, okay, we're trying to catch up. And and the real challenge is to allocate the scarce product that we have uniformly across our customer base around the world. Well, that's interesting, right,

because you have global demand. Um, how many give me an idea where you know, Bloomberg were into you know, how how many guitars and I know you guys have a bunch of different guitars, but how many can you produce in a week, And it's it all handwork or

it's a mixture of hand in it's a combination. My family's business has always respected technology, and one of my competitors, i A will say this honestly, Bob Taylor got to jump on us in terms of using computer numerically controlled routing machines which really make the early part of the

manufacturing process very efficient. And we got religion. So I often joke when I give a factory toward that my ancestors, if they could come back and see the factory that lay left me, their head would spin maybe, but they are ultimately they are put together by hand, right was no one. I don't care where you make guitars. No one has invented the guitar put it together machine. And we're showing for our folks who are watching on our

YouTube channel are Bloomberg Business Week YouTube channel. You can see some of the manufacturing in the handwork that goes into it. I love to get an idea of a business like yours. And you say you respect technology, and so it's a combination of technology and people putting the guitars together. I think you said you get about a hundred and eighty five out in a week. Talk to me a little bit more about that. Well, we have two factories. We have the main mothership, I call it inn.

You know, my great great great grandfather started his business in Lower Manhattan, moved to Pennsylvania, and then early in my career Crutton Street, if I recall, if I read it right, we opened up a sister facility in let Go. I'm Kya Dora, and so at that facility we make all of our Martin guitar strings. And we make what I'll call a medium priced Martin guitar, and so we actually do more volume because the price is lower. So

we're doing about four units out of that factory a day. Wow, that's I don't know where they're all going, but they're going somewhere. Well, it's interesting. So what do you expect to you, you know, anticipate. I mean, you've got to feel good about the demand that we're seeing. You wish it was not against a health pandemic. But I think one of the things that we ask about a lot

of businesses is do you anticipate that this continues? Because once the world opens up, right, all of a sudden we have a lot of challenges for our time again. So yes, A good friend of mine, Brian Majesty. He and his brother have a trade publication, Music Trades, and Brian was involved last week in an event at our virtual trade show. And Brian made the prognostation whatever that word is. You know, he likes to analyze data and then from the analysis kind of tell you what he

thinks might happen. And he said, I think, okay that people, not everyone, but enough people are going to continue to work from home, maybe not every day, but often enough that they will still want to buy guitars because they have some free time. You know, in between work you're doing you're doing zoom calls all day. You've got twenty minutes break before your next call. And how many times have we seen we're seeing you know, someone on TV and doing a zoom call and in the backgrounds of

guitar a lot of times. Yeah, so they pick it up. They got twenty minutes to just do something else and then go back to work. Well, I have to say my husband loves to play guitars, guitart. He has a few of them, um, and he's got you can never have enough. I know that. That's what he tells me. I say that about shoes, and that's why we have a happy marriage. Um. But he has a Martin and the acoustic sound is just pretty incredible. I think it's a bread and butter guitar. Yeah, and it's just a

beautiful sound. Um. You know it's int thing too that I wonder and talk to me because you guys too. A lot of things that we've talked about over the past years, companies innovating, being disrupted, and I do wonder whether it's digital online, if you're seeing you know, you grow your business that way even more because of what's

happened the pandemic. And talk to me too about you guys are creating an earth guitar or an environmentally friendly guitar, which I think is another bigger trend that's coming out of the pandemic that we're all thinking a lot more about, especially as the world shot shut down, right and all of a sudden there was clean air. We're just so the fires in California, like they were just thinking a

lot more about our environment. So the first question what we've seen at the retail level is the retailers that already had a robust online presence have done better than the brick and mortar retailers. Some do both. Some came from a digital world and then did brick and mortar. Most came from brick and mortar and did did a digital world. But the ones that can do both because people are gonna want to go back into a music store.

There's something about hanging out in the music store, playing the guitar, talking to other guitar players, maybe buying something. But in the meantime, you can't do that. The other thing what I've seen in just in my career is that you know, we use these they are called rare exotic woods for a reason, and we need to find alternatives and we need to take better care of the rare exotic woods. And so we've partnered with the Forest

Stewardship Council and they audit us. They come in annually and they want to make sure that when we say we've bought this would legally. They come in and they say prove it. We want to see the paperwork, we want to see the And so that's what the Earth Guitar is. It's a way of us saying you can buy these rare exotic woods and you can buy them legally and correctly, and and that's that's what it's really all about. Is there's still a llegal logging going on.

There's still you know, would that gets sold nefariously. I want no part of that. And I don't think any guitar should have I don't think anything made out of wood should have any illegal wood in it. And so there's still a big concern, you know, and you look over you know, you look in some parts of the world and a hundred dollar bill will buy a lot

of illegal wood. Yeah, I can imagine that. And listen the way of consumers, you know, they care about this stuff, and they're increasingly asking the questions for me too as well. So what is this? Believe in music Week, it's a virtual event. People who are interested in check out the NAM side and a m M dot org today and this weekend blog on it's free. Um, it's gonna be some really good music this evening and tomorrow. So it

was our we had to pivot. Normally, this week would be our traditional big international trade show as part of our trade association in Anaheim. Can't do it Right's going to happen? And Joe, the CEO of NAM said, Chris, I don't want to sit this one out. I said, Joe, we can't. He said, if we sit it out, we're gonna lose people. We're going to lose the connection that our association brings to all of the tribe. And so this was our digital show and what it's turned out

to be. As Joe said the other day, he said, you know, it's not the same as a physical trade show, but boy, in terms of connecting all of us that haven't seen each other in a year, yeah, it's done a really good job. Yeah right, and just bringing the community. Listen, I've used the word over and over again. Community, but it's an important one. Hey, very quickly thirty seconds here. Uh. You do a lot of collaborations with celebrities clapped in

and others. In terms of making guitars. Is there's someone you haven't made one with that you'd love to do? Yeah? Absolutely, And we've tried and tried and tried. So there's a there's a couple of Bob Dylan, Neil Young. Anytime you're ready, We're ready, alright, deal and when and when they when they do it, you can let us know come on back on it and tell us about it. Um listen, Chris, thank you so much. Good luck with event, and great to check in with you, and I hope we can

do it again in the future. For well. Chris Martin, the fourth CEO of the Martin Guitar Company. We said, family run, family owned, joining us on the phone from Bethlehem, Pennsylvania.