July 4th: Fireworks company CEO details ‘tremendous’ demand for displays this year
Phil Grucci, CEO and creative director of Fireworks by Grucci, joins Yahoo Finance Live to discuss business ahead of the July 4th weekend and how demand has rebounded to pre-pandemic levels.
Video Transcript
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BRIAN SOZZI: The cost for fireworks are sky high this year, as inflation rocks the industry, with overall costs rising 35%, according to Pyrotechnics Association. Joining us now to discuss ahead of the July 4th weekend is Fireworks by Grucci CEO and creative director, Phil Grucci. Phil, great to see you. A lot of companies we have talked to, they're in cutback mode. They're looking to cut costs. So I'm curious on what type of demand you're seeing for your displays this season.
PHIL GRUCCI: Well, the demand for the displays is tremendous. We've got a full recovery that we just experienced. Typically, we would have a year to prepare for shows, but our performances all started coming in at the beginning of March. They were late, but they came in fully. So we're back to 2019 levels, as it relates to the demand for the shows.
Cutbacks on expenses is another story, though. Our expenses are rising through the roof as it relates to shipping costs, freight costs, gas, gasoline prices, finding the available labor to work. So we're experiencing many of the things that are happening nationwide right now.
The cost of the fireworks have gone up because of the raw materials. Supply chains are shortening. So there's been a lot of challenges out there this year to prepare for this 4th of July. But we're ready. We're here now. And we've got 400 team members that are out from here to Hawaii, preparing for firework shows and to celebrate this Independence Day weekend.
JULIE HYMAN: How many shows are you doing over the course of the weekend, Phil?
PHIL GRUCCI: All total, just over 70. There's 400 pyro technicians to service those 70 performances. We're as far west as Pearl Harbor, Hawaii, and far down south as Key Biscayne, Florida.
JULIE HYMAN: And so when you talk about supply chain, I'd love some more detail on that. So you guys are putting together the shows. You design them, right, what they're going to look like. You put them on. But you get the fireworks actually made in-- I assume most of them, if not all of them, are made in China, right? So what are sort of the raw--
PHIL GRUCCI: They--
JULIE HYMAN: What are the raw materials that go into it? And how is the supply chain now, compared to what you've seen in years past?
PHIL GRUCCI: So they were mostly from China. Certainly, the consumer fireworks market and supply chain is mostly all from China. But from the professional side, we had a shift last year, and actually, the latter part of the year before that, primarily to our European suppliers, because the Chinese supply, through their labor price problems, their getting containers out of China, the shipping lines getting jammed up, they weren't getting product out quick enough.
They were making it, but they couldn't get it out quick enough. And we couldn't receive it in the United States quick enough. So we shifted our supply chain to Europe, primarily Spain, certain locations from our hometown, where our heritage started back in 1850 in Bari, Italy. So a lot of our product is coming from Italy and from Spain right now.
BRAD SMITH: So people are getting creative with the types of displays that they're putting on and contracting work from companies like yours to really entertain all of the spectators. And particularly, I think about drones and this commercial drone market that's-- I mean, we laugh right now. But I mean, it seems like this is an industry that's going to grow and continue to have more of these events where it can just send a bunch of drones, put on different light shows, and then send them and reuse them elsewhere. And so the reusability factor comes in over there.
PHIL GRUCCI: So my take on the drones is-- my take on the drones, so we purchased and we've invested in a fleet of 500 drones that we utilize in our performances. But they're not going to be a replacement for fireworks. They do have a place in an overarching performance where you're incorporating the logos because they have the capability of being very specific in placements of those dots in the skies.
But when the people go to a fireworks performance, they're looking for all the senses to be touched. A drone performance done well, you're really highlighting the feature of sight, right? When you go to a fireworks show, it's sight, it's smell, and it's the sensing of feeling on your skin, the impact. It's like watching anything on television. It's a large low resolution television screen in the sky.
But used properly, like I said, we've invested in the drone industry. But I wouldn't propose that it's going to be a replacement for fireworks. From an entertainment value and also a certain-- the industry is going down the path of being more conscientious-- not more conscientious, but innovating for the environment as well. Lower smoke products, biodegradable cases, minimal fallout.
A lot of our performances now are designed and the product is being placed on buildings, on multibillion dollar buildings. So you can't have the fallout that you've had-- that we've had in more traditional type fireworks. So you have to be innovative, just like anything else, to stay ahead of the curve on the innovation, on the design. Make it more unique. Use different types of technology, such as electronics and computers.
So the drones are a perfect example of that. But maybe it may sound biased coming from a fireworks performance company, but we have incorporated them in our programs, but I don't believe the day is going to come that it's going to be a replacement for them.
BRIAN SOZZI: So what type of innovation might I see? When I'm walking to a local show this week, holding probably a beer, how are fireworks going to look different this year compared to last year?
PHIL GRUCCI: Well, the colors that we have selected, the different patterns and shapes, the technology of being able to fire different ways of fire-- so the old days of the pyrotechnician going up to a mortar and lighting it with a torch pretty much gone away. So shows like you see on the screen there right now, you can never do that the old traditional way. And that's taking advantage of design and adding it to technology, where you can fire 3 and 1/2 miles-- that image is 3 and 1/2 miles wide-- fireworks that are all synchronized.
So, many of the big cities are utilizing computers to coordinate the programs and show a choreography that you've never been able to see before. That image that was just up on the screen is our pyrodrone. So we've incorporated pyrotechnics within the drone technology so you can put the shape up in the sky. But again, the real dramatic part of it is the pyrotechnics.
