COVID-19 Special Report: Fly Fishing Retail and Supply Chain Impacts

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Hey, everybody. Welcome to another episode special episode of the Barb Life fishing podcast. I'm your I'm your host, Chad A.

With me today? I've got Brett Run Run lin. Did I say that right? Ren lin or Ren? Sorry. That's correct. Oh, are you got it Ren? Ren on the on the phone with me, Hogan Brown as well, Brett is the director of global operations for clean canteen. So he manages basically,

a number of different things, but one of the things we're gonna focus on today for this

particular Covid

special episode is is kinda like supply chain stuff.

You know, clean canteen, if you guys don't know who they are, They they do a variety of, different drink where,

mostly stainless steel or all stainless steel brett.

And All stainless steel. Yeah. In service,

they're based out of Chico and they service

the... You know, out... It's an outdoor Ran in a in a way in a lot of ways. So I I would classify as an outdoor brands. So that's why we've got them on.

Hogan Brown, you guys all know. He's been on the show many, many times.

He he's a guide. He's an... He's a professional angle. He also is a teacher, but he also sits on the board of Av.

Hogan, what is av stand for?

After stands for the American fly fishing trade

association, especially the trade association for the entire fly fishing industry. Yeah. And so,

Hogan on to kind of talk at a high level of, you know, what what the... What the word on the street is on, in terms of how folks are doing mitigation plans and strategies around dealing with Covid nineteen

pandemic at this point.

The date today is, I believe it's March t. Correct, guys.

I think. Yep. Yeah. March t and sounds right. Yeah. The time is

four twenty Pm. Perfect time.

So, basically,

what what I wanna talk about, yeah, was just, like the retail supply chain stuff as it affects. I think fly fishing obviously, but also the outdoor industry as a whole.

So let's get started,

Brett

talk to me about the last thirty days. Like, when when did you guys start

feeling something is off in terms of, you know, your supply and was it before? Yeah. Yeah.

Yeah, It was it was well before that. I mean, that we started it hear about it because we have staff that

stationed in China.

And

we started to hear about the the first inkling of it in, late December.

And then actually,

one of my sourcing managers, his last trip, the last trip of anyone

that it doesn't reside in China was in early January.

And by time he got back on the tenth,

we were already...

In

mitigation mode and and trying to get prepared for what we saw coming down the pipe

being that we had, the folks on the ground in China. I think we had a little bit of in the earlier peak as to what was coming,

and then

of course, the the quarantine

lockdown in China ended up happening right around the twenty second twenty third,

during their Chinese New Year celebration for those that aren't aware.

Every year,

according to lunar calendar, Chinese New Year

happens in China... And the government essentially shuts down,

and business shut down for, an entire two week period

So this this the quarantine first occurred during that time.

And

this year, it varies is learn of course. So this year it was set to,

everyone set to go back forth on February second or third.

And instead the government just kept extending,

the way they termed it, extending the holiday,

which is it varies by region, but it it ended up extending through to...

Like the twentieth

eighteenth to the twentieth, and then

and then folks were started getting back to work. But

the factories themselves since they rely on in in China, and

primarily.

They rely on migrant labor. So while the sales staff and the front office staff got up back to work, it was

it was quite a while afterward, I say at least two weeks afterwards and right around March ten is when we had all of our primary factories up and running.

But

I think that you know,

there there's waves,

a lot of

lot of models, logistics models have

kinda chart out as waves of interference. And,

first wave being in terms of being able to come back along the online is a kind of simple consumer goods.

Then, which, of course, our stainless steel a water of bottles

and the caps, associated with them falls in that first phase.

Some degree hasn't relates to fly fishing I would assume that, like, let's say, rod building

those things would follow in it as well. Probably not flies, based on what they know, because they require hand work,

and you'd have to have skilled labor in place, and and that's been a bit of a bit of a push over there.

But, anyways,

we essentially,

we only really ended up seeing thirty to forty five days of delay in shipment,

and and I attribute that to variety of factors. One is,

you're already planning for the Chinese New Year. So you're bringing in goods

heavily.

And then, secondly, in our case, we were facing

and and no one talks about tariffs anymore, you know, That used to be my life. Now it's

covid nineteen introduction. But, tariff,

we're facing a an introduction of a a four b tran,

then probably no one on this

podcast,

know exactly what that means less in

supply chain. But that was due to come in into effect on December fifteenth for our bottles. So we had already purchased up

quite a bit.

So

the net effect for us is thirty to forty five days of shipping,

what was not

that serious.

In fact, what we're seeing in terms of issues now

is more the supply side for us wasn't really

as damaging as

it could have been.

And the the real impact is kinda coming home to roost right now with our... We have distributors in

twenty six different countries,

and they service

something on the order of fifty five to sixty countries

globally. And,

as these countries are going into lockdown,

a lot of these distributors who take their shipments and select China.

Are starting to... The dues are cancel orders.

So the the... And and the there's really no way of knowing how deep that well is gonna go. So

that's that's what we're dealing with currently as well as obviously, keeping our operation going

during this period here in the states and having, you know, majority of folks anyone who can essentially work from home.

And then

and having a skeleton crew and working with the attorneys to get the designation as being

as being,

essential,

which we did do

as we... You mentioned that outdoor business.

Previously, but we actually do a a large majority of our our un majority domestically, but a large percentage of our sales

go into a grocery rate as well. So... Oh, okay. Didn't.

Yeah. Yeah.

Outdoor is definitely where we started and where our heart is and we remain active in that space,

but that we do... We have moved into, at, the kinda high end grocery rate, and we do a lot of stuff cool foods and and and both like that. So... And that

that enabled about fifty billion going improve. But the demand is way way down. Yeah. Can you... For my own identification, what is for b mean in a supply chain context?

Yeah. Well, that kinda going back to the to the tariffs,

and the delay that the Trump administration broke them down,

each way with tariffs is referred to as a tran.

And

in our case, our bottles were caught in the four b wave.

And it it just it goes down it and down to how the products were split.

And, you know, this my, we were preparing,

know, testify to find,

in front of the in the state's trade representative

to

dispute.

The tennessee and to play it back the case that click handle a twenty five percent

business on product. No. Brett. Hold on Be hold on. Hold on. Hold on. Yeah.

I... It's the the the quell call quality is just awful right now.

Hogan, did you?

Did you hear that too? Did it sound like he was in a bubble?

Yeah. He just probably not talking into his microphone or something?

Okay. Go ahead. Like, after your question. Yeah. Just like, you know, the last... Just repeat the last ten seconds.

Sure.

So

the at any rate, the four b

tran is just the that

refers to the the

list of products that we're gonna include our, stainless steel water bottles, and that was set to go in the effect on December fifteenth.

But, on December fourteenth,

Trump decided to

for that and announced that he had signed his Phase one

agreement

with the Chinese trade delegation. So

we ended up dodging that bullet and

catching an entirely new one when the covid they came around

in February.

Yeah.

Okay. So they basically,

from the the situation on the ground for you guys and and a lot of folks in a similar

situation where they rely on manufacturing inch out of China, is there pretty much back

in terms of you said the kinda like the lower... Low... Not not lower end. But, like, the

the type of the type of manufacturing, it doesn't require hard skills to to know,

where I would say it's more of Yeah. Automation focused instead of, you know,

detail hand work. Is that correct?

Well,

at to some degree, yes. I would say that it's less complicated. And and what it actually... I mean, actually our product does require,

fair amount of hand work

although the trend to automation is happening. I think it has... Or what it has more to do with is the size of the bill of material,

because the more you rely on parts from other sub suppliers. Yeah. The more likely it is that one of those sub suppliers is had interruption. In our case, there's the components, the number of components that go into the product is really low on a relative scale. So the more complex your product is in the more specific, the input either of a sub component or material is the more likely it is that you're... It's still experiencing

interruption. Okay. It takes longer to find an alternative. So something like a fly like you were saying or say, a fishing, real

that that would be, like, Yeah. Milled or or or however, at... However they do it or any of the injected mold stuff, maybe that's more a little more complex. They... They're probably still having issues then, It sounds like

Well, yeah. I think it it really... It it depends.

I

I I with the fly,

the fly

specifically,

you know, that is a top skill.

So

if you have

disruption in folks returning work, which certainly was the case

coming out of Chinese New Year, you know, the

almost certainly, and maybe in some cases,

folks are able to have an only local population. But,

it, you know, it takes time to teach somebody to tie accurately quickly. Right? Yeah. So the know, would imagine that the interruption you know, was a little bit more prolonged in that in that sense. Yeah. When it comes to the more technical

operation, you know, like, Cnc machining, you're talking about milled

rails and these kinds of things. It you need a skilled operator for that as well. So

at at this point,

people... It seems

to be across the board in China,

that things are kind of getting back online.

The the big

issue now is,

at least from a supply chain standpoint for all consumer goods.

Is we're all rushing to try and reduce the what number of orders that are in the pipeline

because, you're seeing this

worldwide, at least in the west,

worldwide

decrease

in demand, and, you know, it can be...

It's the terrible irony is at first our my company, and myself along with most others.

We're really just focused on getting things back up and goods flowing back in.

And now we're like, whoa.

Because if you take on all that product, it can lock up your cash and and actually cause a lot of problems and the demand is not there as Covid spreads around the globe. Right. Right.

And and just selling hard goods is all... Everybody's got that same same exact issue at some point. You have to warehouse any anything. Exactly. Exactly.

That's right. It's money on the shelf. And

if people are not spending that money,

it your stuck with it, and it can it can just exacerbate terribly the

the whole cash flow issues that are coming up in this situation.

And and then the longer this goes out, the worst... The higher the risk, obviously. Right?

Absolutely.

And, you know, so I've transitioned...

I'm absolutely involved on a daily basis on the supply side dynamics and trying to manage that. You know, there's lots of things that we're monitoring,

including

issues with import at the ports,

because during the slowdown in China, a lot of the port workers were laid off,

even though the ports we import mainly into the port of Oakland here in California.

But if these folks get sick, you know, there's not a... There's not a,

une ending supply of skilled crane operators, for instance, and these guys of things. So we're... There's lots of other concerns on the supply side, but largely,

the bulk of my time now it's transitioned to

maintaining operations and kinda of trying to

walk that tight rope

of cutting expenses without knee capping the company in the future. And,

so far, I feel like we've done a really good job of that,

but there have been some tough decisions have be made Yeah. Can you... Is there stuff you're comfortable sharing, like, what you guys... What you guys have done to mitigate the the the... This glut of inventory, like, to deal with that?

Sure.

Well, I mean, to be clear, we we don't have a glut right now, but we are working actively with our,

suppliers. And this is where,

you know, having that great

relationship with your suppliers.

It it is where... And I mean, along with the employ contract and everything else. It's,

necessary.

Really pays benefit.

And that is...

The suppliers understand the situation. It's global So thought, there's no trouble subs

the need for this. That we're working with them daily.

You know, I was making sure my youngest son was doing this geography homework earlier, and then also,

working through a list of,

skus of product types that we would, you, requesting or be canceled in manufacturing.

And then trying to work with the supplier and make sure that they don't get hung out,

in terms of holding the bag on inventory as well. Trying to essentially, again, walk that tight rope of

of making sure

no one party,

it takes an irr blow.

But also,

making sure that we're adjusting as much as possible to keep down

the inventory because

that's critical right now.

And, you know, I I would expect and hope

that

you know, the folks in the fire fishing industry are able to work with their suppliers in the similar manner.

Yeah. And I would say that this applies across the board. I think the most immediate

affected area it'd be,

would be, service industry,

particularly restaurants,

that, you know, if you've signed your Pi, your purchase invoice,

confirming a purchase order,

you know, in the supplier does not give released, they're basically

gonna

contribute to ending the business as a customer that they could have otherwise when this thing passes. So it's really incumbent on, all suppliers to

give ground and and relief in that regard and have kind of a long view

in terms of what they can do

for their customers.

And and that's the kind of treatment we're getting

from our suppliers overseas

and and how we're,

operating with our customer. Yeah. I mean, I think that that's that's kinda like, the only way this is gonna happen is if everybody in that that value chain,

you know, works works in concert to alleviate stress on each other's pipelines.

Hopefully.

We can, you know, weather the storm together, you know, from a business side and and just kinda get through it and and, hopefully, make it make up for it on the on the back end of this thing. It's it's pretty nuts.

Yeah. Upgrade. Agreed.

It went... So in the process of all this, Like, have you guy... Have you identified some things that you guys could have done better?

And I'm sure you have... If if you have,

is there...

What sort of new policies are you putting in place if you can share some of that stuff?

Like, or what... Maybe maybe you've, like, I id stuff to come back on once the shit hasn't quite hit the fan is hard?

But you need to, like, maybe re tool some process. Is there anything around there you could talk about?

Well,

without getting into too many specifics. I... I think actually, you know,

One thing I I do want, I think it's worth addressing is, I've had a lot of

questions and comments either,

from our board.

And from other places

about, you know, how quickly can we diversify out of China.

And I am certainly not gonna say that,

having all your eggs in one basket is a good idea. However, there isn't really, you know, realistically a strategy.

To

mitigate, a, pandemic,

as it goes anywhere. Yeah. So it's it's... I think that, you know,

all organizations and for a variety of reasons, I I I I'm particularly proud of our

organization's ability

to react quickly,

especially in supply chain.

We're if we're organic company. We don't take any outside money. And so,

I think, you know, we're excellent at at monitoring and and and adjusting quickly, but also out of need

by virtue of the fact that we're organic. So Yeah. That's really the key. In, these situations is being able to look out and

even when others around you either in the same industry or within your own organization,

maybe and in this case, especially, you know, in early February,

when I was talking about cutting sales forecasts and, you know, flashing them,

it it it just

especially initially, it wasn't a really popular

popular topic to be bringing out that shit, I think that that that more than a few folks looked at me like,

you know, this is some crazy hyper.

But that really is the the the critical

step that needs to be taken these kind of events is

you gotta recognize what's coming and then do something about it as soon as he recognize it.

Understand how it's gonna affect everything that you have in motion and make those adjustments immediately,

because you're gonna... If you're the first in your in your,

area to do that in your, industry,

the better off you'll be down the road. Yeah.

And we've already seen some of that where folks have pivoted from our competitors to us because we're

still able to accommodate

request, which is important to get through these times.

Yeah. Alright. Well, thanks for sharing all that with, brad. I wanna

transition over to Hogan. I got... There's some background noise. I don't know what that is, but look, sounds like a gate or something.

What is that?

Probably my chair.

Okay. Yeah. Stop moving. Hogan. Okay.

So... Sorry. Sorry. And no worries. So, Hogan,

first of all, you we, you know, you and I had a... When did we talk? I think we talked on Saturday, and you were telling me about because, again, you guys, Hogan also a teacher,

and, you know, the the entire entire teaching industry right now has

literally had to basically do

distance learning overnight

you know,

can you kinda talk about that a little bit before we get into the fly fishing stuff because it's a really interesting problem that Yeah a lot of teachers and families we're dealing with right now and, like, how... And and talk about, you know, hamilton city specifically because the... The Soc economic

situation there's a little bit of interesting as well

that a lot of people and I think more affluent communities don't understand what what... How this is affecting folks in lower income areas.

Yeah. Yeah. For sure. So, you know, the the one thing education had going forward is,

probably over the last five years. You have seen

a trend

to

more of a a technologically based

education. You know,

many of us, if you were in college in the last

health ten, twenty years,

you probably had the option to take an online class

in college

long before having to take an online class in high school.

Well,

I would... I wanna say about five years ago,

Google came in and basically

for the better part took over,

technology and education, they, created a whole,

operating system based on the cloud with Google Drive, and then they created a, basically a school system called Google classroom,

which is

essentially a way for a teacher to

do everything

via

online. It's basically the framework for online education.

You know,

most schools, even even at my school where I work, like,

you know, textbooks have gone online,

assignments are given online and turned in online,

So

the framework or the infrastructure to do an online distance learning

kind of

system

has been there.

Now, not every teacher has embraced that or used all these new tools

and not every student has the ability at home to access all those new

new tools.

So, you know, to access this stuff at home. You gotta have Internet. You gotta have a device, you know,

a laptop is usually preferable, you know, but I have kids that sit in do homework on a little iphone screen.

So

I think education as much as people,

talk about how hard it's gonna be. The infrastructure is there for education to pivot to a more online based thing.

But the reality is,

you know, most of what takes place at a a high school which which It to, you know, the interactions with the students and the relationships you build with the students, You know, that's not gonna happen over

Google classroom or an online meeting. So Right.

The other thing as this kinda, you know, shakes out, like,

you know, it really depends,

like, in my community, you know, If I if I took a... You know, I got about a hundred and fifty student,

you know,

not all those students have Internet access at home. You know? So how do those kids access

their education if we're gonna go to a complete online

field? You know?

Well, okay. So maybe they have a phone that provides Internet access. Where are you gonna, you know, read a document and tech book or, you know,

you know, type your homework on the, you know, your cell phone, probably not,

but a lot of kids do it,

then, you know, we have kids that don't even have phones, you know? So

this huge discrepancy with

access

to education when you go to a completely on based online based system is gonna be incredibly

soc

economic driven.

I know just in the two weeks that we've been out of school we've handed out,

you know, every laptop that we have on campus. We got most of our kids with a device.

We've put up free internet, Xfinity and a couple of the big companies have come in and just

basically given pre Wifi f.

You know, I think we have seven hundred students

in our district and we've been handing out about five hundred pre meals a day. You know, a lot of kids are Know, they rely on breakfast and lunch from a school. So

there's definitely

a

a hurdle for the soc economic kids when you don't have school for the kids.

You know? Yeah. Because... I mean, they're... Obviously, they're getting their education, but they're also getting in in a in many cases sustenance, you know, and a lot of people don't do... Well, absolutely, they're getting. They're getting, you know, interaction

Yeah. And I mean, a a lot of communities around here.

You know, it's the busiest time of the year for agriculture, you know,

agriculture is not stopping and working. So a lot of our kids, You know, if you're a

seventeen year old male in your home, you you're going to work. Right. You know? And if you're

not, then you're gonna babysit your younger siblings because mom and dad are going to work. So,

you know, am I gonna ask you to sit down in front of a computer screen and listen to me sure about something where you got your three younger siblings running around in the back now. You know, I... You so...

Yeah. It's it's a hurdle, man. It's. Definitely

definitely hurting some kids. You know, we're trying our best. But... How is this not ideal? How's food being distributed then? Because you said that... They were giving out meals. Still... So in our district, you know, our cafeteria staff is produced thing basically, like, drive through lunches and breakfast that students can pick up Monday through Friday

and all of us basically are volunteering

and going in and.

Hand and out food and helping out.

Yeah.

So...

Yeah. No. The the the educational component of what's happening is

I don't think a lot of people quite realize what's gonna happen. I mean...

Placement

Yeah. Yeah. I mean, so you're looking at, you know, I'm

I teach Ap courses.

So, you know, college board gives their Ap courses

and

you know,

may.

So

they still haven't decided really are are we gonna have an Ap program this year. You know, and these are... There's the college board. It's the same people that do the Sat.

You know?

You have junior that realistically this will be the last

semester that will go on their college applications come next year,

you know?

So what does the kid's grade look like for the spring semester of twenty twenty

if he's not, doesn't have Internet access, if his dad's making it work every day if she... If it's a daughter's son, she has to stay home and babysit the kids, my mom and dad go to work? Like, what happens to their last Gpa, they put on a call application next semester. You know, what if they were planning on taking the Act

Or the Sat this semester. You know? And you can't you can't just, like, oh, or, let's just pause everything and and start it back up when it goes because kids are still being born and other ones are still moving through the process.

Right?

Yeah

know

out and make room for more because they're a certain amount of capacity times.

Yeah. So, I mean, it's it's definitely gonna be... There's gonna be a hiccup. You know? I mean, it's a at the

you know, it's a at a case case. I think it's k eighth level. They've just spend all state testing this year. There's gonna be no standardized state testing,

You know.

You know, there's a lot of funding that's based on standardized testing. You know,

it's

it's kinda we're entering into a an unknown

you know, kinda component of, we're not sure.

So...

Yeah. And every district's is little different. You know what I mean every... You know, my kids are in Chico, unified night work and Hamilton unified, and, you know, we're doing things a little than Chico is, and they're doing things a little different than we are, but everybody's scrambling to figure it out. You know? Yeah, I bet that the kids are probably adjusted

easier to it than the teachers that didn't already have it built into their curriculum in terms of the distance learning stuff, I would assume.

You know, if you didn't have the kinda infrastructure already built in,

yeah. You're probably struggling.

Yeah. But at the same time, man, you'd be surprised how many kids still, like pen and paper.

You know? I mean, it's...

Well, you know, if it... We're talking about, you know, I got kids that, you know, the only internet access they have is when they have Wifi, free Wifi at school, you know, and that they can connect their phone to that. They don't have a cell plan. They don't have Wifi At home. They don't have a laptop or a computer

you know,

you know, if you don't have access to the Internet and technology, you're not comfortable using it. You know what I mean? Yeah. I it's it's really sad. Like... Their Internet and computer access should be... I I think just kind of a public utility because it's it's such a competitive advantage for those people that have that ubiquitous connection.

And, you know, if you're... If if you wanna be competitive when you're eighteen nine twenty when you're getting in the job world and you've you've got this

you know, this disability, this tech technological

disability because of your Soc economic background, it's that's pretty shitty.

You know, it just kinda keeps people Yeah. Trapped in a in a in a rut.

You know?

Well, absolutely. I mean, I I was

dealing with students today, you know,

students using their email for the first time. You know what I mean? Like Yeah.

We're talking brutal. Sixteen, seventeen, eighteen year old kids, you know? But if you don't...

If you you don't have a computer, or you don't have a cell phone, you don't use email. You know what I mean? Yeah. Well, I'm hoping that, you know, all this stuff that's that's happening is

is gonna, you know, put a spotlight on

some of the the problems that we have, you know, the social problems that we have and... I think it's gonna man. I mean, that's... Yeah. But, you know, that's one thing I keep going back to is

that... Yeah. Yeah. Well, you're also his new teacher. I know this this is not really a a fishing podcast today or it's so far, it hasn't been, but I apologize, but, it's just fascinating because, you know, you've got, I've got two guys on... Right now that are, you know, dealing with stuff on the ground and it's really interesting. We're gonna get the fly fishing thing in a minute. But

let's talk about... I wanna switch gears and talk history because Hogan also a history teacher. Sure. So Yeah. Talk to me about

the difference between the great depression and what's going on now.

And it's specifically, like, how we came out of the great depression, Like, what was done, You know, what kind of what kind of social programs? Putting into place or or big initiatives were putting a place to pull us out of that.

Obviously, there was a warning. Yeah. Okay. So...

Yeah. No. No. No. So, you know, prior to the great depression, you had to...

You had this...

We're

you had a general to be very general and overarching is the government didn't get involved in the economy.

You gotta think

the government traditionally leading up to the great depression

would side with big business

and not get involved in the economy. You know, if you look at it from a historical point of view, the the the irony of the fact that we're deploying the national guard to

help with things in this day and aids, the creation of the National guard was to put down strikes.

So labor was considered

an enemy. And so if there was a strike,

the federal government would use the national guard to put a strike down.

So we had this kinda

laws a fair hands off economic approach going into the Great depression. And,

you know, there were theories in society like the concept of social Darwin ism,

where, you know, the poor were poor because they're less inferior.

You know, You had eugenics being taught in colleges. You... It was a dog eat dog world the rich get richer and, you know, the poor

They send themselves out. They're the less inferior. And

as we went through the twenties, a lot of people begin to benefit from

the strong economy, and they begin to benefit from the consumer economy that was growing. And

you know,

the we saw the development of what was a true middle class, and we saw,

you know, ready availability of credit and all these things. And

the one thing that people after member when when you hear reset and depression tossed around,

I think. And I'm by no means an economist that talks on Cnn or anything like that. But

what happened in the great depression was that there was fundamental fault with the economy.

And

the crash in the depression was due to fundamental faults

in the economy. What we are seeing now is we are seeing an incredibly strong economy

react

to a soc physiological.

Yeah. Problem. And that... That's why I actually wanted to go down down this because that distinction is very, very important. I, you know, a lot of people are home. Very important listening and the... It's all doom and gloom and you read a bunch of shit on Tv, and it's all doom and gloom, but it's all very real stuff, but also,

you know, it... We're a very resilient

country

and we have a very Brazilian economy. Absolutely. So... Yeah. Sorry. Go ahead. I just

it make... Oh, no Don't no. That is Brett told you the. Yeah.

And Brett made the point very clearly.

To me and in what he was saying is he's... The supply side of our economies

is there. And I mean, if you wanna get into the fly fishing and that that's the supply side is there.

From is there's no demand. Yeah. And there's no demand because people are being forced to stay home.

It's not... You know, I'm sitting here in my office for I don't know how many days straight. It's not that I don't wanna go out and spend money. Yeah. And go do stuff. It's because I'm being told not to. And it's not even because I'm not making money.

Like,

you know, most of us,

you know, definitely there are parts of the economy that are taken hits, you know, I'm taking a hit from my guiding and stuff, But

as soon as my clients are able to leave their house. They're gonna book days again. And as soon as, you know, the neighbor kids are able to go see the latest pixar movie at the movie theater, they're going again. Yeah. You know? I It may take a little bit of while to start the engine back up. But

the fundamental

economics.

It was not... This is not a problem with the economy. It's a problem with demand, and

we're... And that's good. I mean, we're being forced to stay home and curtail our demand, and I guarantee is as soon as I'm allowed. I'm gonna start throwing money at every bar and restaurant in Chic. So... Yeah. I'm sick in the same thing every day. You know.

Yeah. It's say... Yeah, the service three. I think... Yeah. Go ahead. Sorry.

No. I I I think the service industry you're probably gonna say that short term, they're gonna get crap. Yeah. Yeah. But,

you know, And I don't know the the business model, the service industry is probably as well as you do. But

is they can weather it or at least

find a way

the demand there as soon as this is dope. Yeah. You know. Yeah. The service industry, you know, I I think this this is indicative of any retail situation where you have a you have a a a a landlord and somewhat at leases from that landlord. And this is to Brad point about, you know, working with your supply chain and and figuring out something that's gonna work for both parties because there's a mutual interest and, you know, it's kind of, like a s

relationship in along lot of ways.

The landlords gotta to gotta take the long approach, you know, the long game approach because, the the, the restaurant two are or the the retailer.

They're are cash flow driven business, you know, it's a service business by by by definition.

So it's gonna be...

If we're gonna weather the storm. I mean, if you own a... If you own something that you're renting out to a retailer or consider keep that in mind. You know? And I... And I don't need to be preach, I that wouldn't... I I I think it's pretty obvious.

But you gotta get people breaking. No I don't think it's at all. You know? Yeah. Well, I mean, it's it's... The smart businessman,

you know, is gonna go, okay. If I take this guy out

and establish business.

Is a new business gonna come in here and be able to make it when this thing's all over, like this guy will be? Or shit the bed in six months, and then, you know, an empty spot for three or four or five. Yeah. Yeah.

Yeah. Exactly. I mean, it's it's the long term approach like you said.

So...

Yeah. Okay. So. Let's talk let's talk after.

Yeah. So

you know, we we first started talking about this probably a about

oh, about two weeks ago,

as a board and kinda looking at because, really, the the app is composed,

of

guides,

retailers,

manufacturers

and

media,

you know, print media

and such. And the largest component is guide.

But who really started to feel the pinch

at first was

manufacture

because of

a lot of flies

like actual physical flies are not made in China. They're made and actually, the Philippines or Vietnam where there's a little bit more skilled labor base. But U. Pretty much most hard goods. Yeah. Pretty much most hard goods and soft goods

are

made in China. So Rods reels,

fly line, bags, waiters, you name it.

Pretty much, I would say most things in the fly fishing industry outside of flies,

are either made in the United States or in China.

So

the retailer... Or excuse me many manufacturers were the first ones to kinda

feel the pinch, but

what started to happen was

the fly fishing industry runs orders.

They write they...

Most fly fishing

orders are written in

September, October.

These are called... These are basically your pre season buys and you select multiple shipment dates throughout the year for the product line.

Most products are on a calendar year,

meaning there's only new products released once a year. Some of the clothing manufacturers will do a a spring in a fall, but

that's pretty rare.

What started to happen was this thing started to hit. The supply chain obviously got interrupted.

But the first real hit that I started to hear was when fly shop started canceling orders.

Meaning, if you have a huge shipment coming in

March fifteenth for all your spring flies,

a lot of these shops started adjusting or canceling orders

that were thirty to sixty days out based on what was kinda starting to come down the pipeline so to say. Yeah. So

who that really started to hurt was

it masks it kinda... What happened was was what what Brett was talking about that.

Now

the fly fishing industry had began production on orders written that September in October, and that product would come in state side, probably February, January for its first shipment

in the fly shops within their arrangement, look at their ship date. And they're like, yeah. No. We don't want that stuff anymore.

And so now you have the manufacturers sitting on this massive backlog of product.

Now

the smart shops and the reps

from what I've gathered worked with these guys, and they didn't completely cancel the order. They just delayed the ship date.

You know, one rep who's a good friend of mine said he was nearly seventy thousand dollars

in two weeks of canceled orders.

So

you're looking at a big

glut

of

stuff

at the kinda,

manufacturer level.

From the fly shop level,

you basically fly fishing is a non essential activity. Right? So a lot of fly shots about to close

or do, like, curb side delivery.

And,

you know,

doing curb herbicide delivery in Northern California where most people aren't allowed to leave their house

doesn't really work. You know?

So in a month, you know, March, April May should be some of the busiest months

in California,

whereas say Montana, Idaho and Wyoming or some of the the Midwestern states

it's not felt as much there because they're

not into their busy season yet.

Whereas Right. You know, most shops,

they should be April the trout opener, March April May on a year like this where we actually have a nice spring, rivers,

you know, guide should be guidance thirty days a month in fly shop should be cranking.

Right. So our area

is getting hit

much harder

than say, Montana, Idaho and Wyoming.

The other part of the country of the area that shift getting absolutely crash is the Florida keys is this is

spring tarp and season where the world essentially

comes to the Florida keys to fish from mig tarp,

and it's basically

locked down.

So you're... We're looking...

You know, if you kinda trace it down that way. Fly shops. I mean,

I can't imagine fly shops are

doing too well.

I know guides across the country and looking at, like, eighty to a hundred percent losses

for the months of March, April and May,

from what we've gathered through some of our, you know, surveys and research. Yeah. The travel industry

decimated. You know, what you talked about the decimated, you know, not existent. Yeah. Well, that's that's one... Companies in fly fishing? That's one that's fucked for probably a while. Like, that's not just gonna... That's not gonna rebound back. That's gonna be a a slow process to... Come back because there's just so many people that are gonna be so, you know,

honestly, like, Ptsd for for a lot of folks. They're not gonna wanna go to absolutely. They're not gonna wanna fucking travel. They're not gonna wanna get an airplane, you know, all this stuff. No. That's that's

that's one of my concerns. In our our industry is just the, you know, the travel the travel destination stuff is

is gonna be... And, you know, there's a pretty slow to come back.

Yeah. And and, you know, that's kind of the

You know, that's a double edged sword.

So if you are a flash shop with a huge travel business or you're a...

You know, we have companies that all they do is travel. Yeah.

That crush that component.

Yeah. Now as an industry as a whole, what happens and we've seen this before is...

So,

you know, doctor Bob who's not gonna take his trip to the Amazon

for the, you know,

Christmas island

gonna save his fifteen thousand dollars. Well, he's gonna book a guide. Yep. And fish locally, Yep. A ton more net. Yep. So it's not that those guys don't fish.

That money just gets directed to a different avenue of the industry. Yeah There's... You know, if you're a a travel agency, that doesn't do anything for you.

But as an industry picture, the money still rolls through the industry. Yeah.

Yeah. I think the the local guy yeah, yeah. I think you know, that that doctor Bob guy,

he's just trying... His perception of risk is lower if he just can drive up to Northern California, for example, and go do a tail

drift on the lower sack, you know, as opposed to going to the Florida keys and taking, you know, having to go through route through denver and then and then, you know, New Orleans or something and on your way,

you know,

Yeah. It's absolutely. And and to be fair, most, you know, they are a shop with a big travel business,

you just, you know, and doctor Bob's your client on, usually takes two destination trips. You just steer that guy into your local guide operation. Yeah. And the money still stays under your roof. It's just,

you know, getting redirected. I mean, there's some there's some companies

in our industry that are purely travel based, which

Yeah. Is there gonna take a hit? I would be? Yeah. I mean, that's their risk of not... Not diversifying, but, I mean, like, to Brett point earlier, Like, how do you...

Is, like, you who's the guy that, like, three years ago would die on the... Die on the the sword for a, you know, a a a pandemic, you know, mitigation plan and dump a bunch of money into it just just in case. You know, that's not that... That's not gonna get funded. Yeah. That's not gonna get funded. You know? No.

No.

No.

So

you know, right now, we've got some legislation push through and the Care Act, which provides

some small business loans,

some, basically disaster relief for small businesses,

payroll tax relief,

a suspension of tariff payments,

and then small business loans,

that our fly shops can apply for.

Now that doesn't do anything for our guides,

but we're gonna be releasing here in the next hope I was working on it earlier today with our president and our, director

there is funds within the Care act that was passed that independent contractors, which are all... Most of our guides are can apply for direct relief.

And

this is not uncommon.

There is precedent for this in

the early two thousands the salmon season

was canceled.

I'm sure you've talked about that and heard about that on the podcast.

The federal government

paid guides

the,

basically the sum of their best season.

So if, you know, Guy Joe's best salmon season was

a hundred and fifty days, and he made a thousand days,

they paid that for three years.

So

with the fact that a lot of boat ramp, state parks and a lot of even if we wanted to guide, the access to water has been cut off,

I know Northern California Guides Association, James Stone. I know the American Saltwater Captain's

Association, many of our trade

kinda of guide unions.

Have I've already written letters

an approach Congress about some sort of

relief, and I think we should have something here in the next couple days that we can get the guys that they can apply for.

So...

That's awesome. We're trying as a a Yeah. We're trying as a trade union to take care of these guys. I'm kinda the...

There's two of us on the on the board that are guide me and Lucas Be, Lucas set the red fish guy out in Louisiana. So,

we're kinda of the the noisy voices in the room about,

providing direct relief. I mean, a lot of our guys are gonna lose...

I I was swapping emails with Anthony, and I think Anthony and

Anthony probably lose about a hundred and fifty trips maybe over the next couple months. Yeah.

Andrew,

Harris the confluence is right in there. At the hundreds. You know, we're talking eighty, ninety percent losses.

Yeah. For, you know, months where these guys should be guiding thirty days

a month, you know?

So... It... Would you be able to come... Once you guys have some really, you know, crystal clear

direction on on how that's all gonna work? Can we do another episode just like a quick bonus episode? Ten, fifteen minutes to kinda of, like... Sure. I I'd love to because you...

Yeah. I should have a,

I have the language

that part of the legislation, but there's no way I'm sending that off to

a bunch of fly fishing guides as instructions. So what app is doing is we're putting together basically, like, a one page hand out for all our guides that say,

step one.

Step new. Well, let's just, you know, go through that. We'll just go we'll just go through that document. Yeah. Okay. Absolutely.

Well, happy to do that. What Brett still there?

I think Brett fell off. Okay. You said if you wanted him back on, give him a call, you he dropped to the call. No worries. Yeah. No worries.

Well, I was gonna ask, I was gonna ask, like, with this glut of inventory that's out there,

how's that play out? Do you know?

In the with... In the fly fishing space have you guys talked about how that... How the economics are

Yeah. So it's it's a moment

glut. You know what I mean? And this plays in the back, even we were talking about the history lesson is,

you know, whether it's clean canteen bottles or, you know, parachute Adam, like,

say,

fly company is now sitting on and fuck it the parachute items because

the fly shop cancel them. Right. Well,

a smart shop is gonna say, okay. Well,

everything I'm reading is, you know, June July,

maybe get back to normal. So why don't I take my March April shipment

and double down on my June and July shipment

not cancel the order just delay the ship date, which means I'd then have ninety days after that to pay the bill,

with the fact that as soon as they lift the freaking walls up that people are running in here and going fishing.

You know,

because you don't wanna be the fly shop that when they lift the walls and everybody runs out is like, yeah, I don't have anything.

You know, because then you missed the opportunity. So... Right.

I think that glut of inventory will be consumed. It's just not gonna be consumed in the second quarter. It'll probably be consumed in the third and fourth quarter.

You know? Yeah. I'm I I been scared this think what steel had season looks like for twenty twenty.

Oh, god. You know, bunch bunch kudos people. Well, I think, you know, I think a lot of, the brick and mortar

that never

really put up a website of any sort with, you know, just an e commerce... A simply commerce site on on Shopify

or probably, you know, thinking about Yeah. Maybe doing that this time around.

Yeah. And I mean, I, you know, the five fishing community, as you know. I mean it's like,

I I would

I would imagine, you know, people are

buying stuff to type flies, buying books street and stuff like that. I mean,

I know that stuff doesn't pay pay the bills on a month to month basis. But, you know, anything you can do to help support your local fly shop,

you know,

go in spend some money on something. I I put a little generic list together that I sent out and got repo all over about things you can do to help out. You know nelson.

Yeah. A lot of it's just cash flow issues for a lot of these businesses, whether it's a guide or a fly shop. You know? Yep.

So... Well cool, man.

Yeah. So we'll we'll survive. We'll survive. You know?

Yep. Yeah. Alright. Well, do you have anything else to to say before we let you go?

No. No. Just

you know? If you if you haven't seen that list that I put out, I'll send it to Chad, Chad can put it up or if you already did. But, you know, there's a lot of little things we can do to help support the industry. You know I I mean, I guide, but I had couple guide trips on the books where I was gonna take my kids, and they were paid for, and,

one of them I had to cancel, and I just

reschedule let the guy keep the money helps with cash flow on his end, and I know I'm gonna go. You know, if you gotta cancel a guide trick look a guide to keep the money, You know, It's probably to buy them groceries or pay as rent.

You know,

high margin items in a fly shop or all the stuff you can buy right now, you know, fly sign material. You know, go buy a tying kit, rod building kit, you know? Yeah.

There's a lot of ways we can support our little little industry. So...

Yeah. There's there's all kinds of, little lakes and things to fish around here. You just gotta get on Google maps.

Yeah.

Yeah. I mean, I've been going out as much as I can. The weather's been a little screw the last couple days, but I've been trying to get the boys out and go fish or go for a hike and it's really... I mean, you probably experienced this too. You know, it is

I've had to smile the amount of people I see out hiking and

along the River banks and just outdoors. Yep. You know? Cool. Yep.

Yeah. It is...

I have this

under overarching positive miss that this is

gonna be a good thing. Yeah. I mean, I do too, man. I re hit the reset button. Yeah. I did... I do too. I saw, I... On another episode.

I I forget which one. I said, like, you know, these people that are red discovering the outdoors are discovering them for the first time, like, I did four years ago.

Those folks will stick because they're gonna under... They'll they'll realize the Oh, yeah. The the mental health benefits and the physiological benefits of it and and they may stick, and it might be better for the outdoor industry,

you know, at the end of all this.

So... Yeah. I I honestly think there's a lot of lot of... A lot of industries are gonna snap back out of this and do pretty well.

You know, if we can just get through it together. Yeah. Yeah and and that's your... Your... The point you made earlier about, you know, this is not a fundamentally It's not a, you know, a problem with our financial system or anything like that. That's You know, that's the thing to... No. No. I I I was listening to Some show and, yeah. Somebody was said, you know, you know, maybe by an economist standards, we have... We we would reach, you know, the the unemployment applications were pretty high the other day and

unemployment levels that were

equal or greater than the great depression, but it's

it's a completely different animal. The the the the great depression was fundamental flaws in the economy, the economy collapse. It was... This is the pandemic It was rotten to the core the entire economy? This is different. Exactly.

Exactly.

Exactly. Cool. Alright. Well,

let do you wanna you wanna plug the the websites in in your your Instagram or really? Yeah. Sure.

Yeah. Sure. I mean, I I would definitely if you guys are interested in in anything

fly fishing industry related to checkout av dot org.

You know, if you're a guide to fly shop, I would highly encourage you to join is there many benefits

that we list on the website. If you wanna learn more about what I do, you can check out h g b fly fishing dot com and

all my social media links and everything are there. So,

big thing is, you know, to support the industries that you want to see at the end of this. You know?

Thanks for listening to you guys. Whatever it is.

I'm gonna... I I know this it's been a pretty sober week for a lot of people and humor is always a good thing. So I'm gonna... I think this is funny. I'm gonna leave leave you guys with this and then and then go.

I'll start it now. Hogan, don't let me tell me if you've heard this one.

K. Hold on. Here go.

Because coronavirus, you are going to be quarantined,

which you have a choice.

You a

quarantined with your wife and child or b.

He goes for b.

Anyway. Yeah. My dad sent be that. Yeah. That's been going around. That's one of the... That's one of the clues. Yeah.

That's the only clean one I've got a, thousand that I could share.

But I thought that was funny. Oh, yeah. The the the meme industry is is at an all time high with this with this thing. Yeah. If I if our camry was based on memes, we'd be fine.

Exactly exactly. Well. We'll thank alright everybody. Well, thanks for having me.

Thanks. Alright care. Bye. Take care.

Bye.

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