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Shortage of Materials Forces Vermont Companies to Get Creative

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Steve Montanez making food coloring at Ann Clark Cookie Cutters in Rutland - COURTESY OF EVELYN HENDERSON
  • Courtesy Of Evelyn Henderson
  • Steve Montanez making food coloring at Ann Clark Cookie Cutters in Rutland

Soon after he started working for a Rutland cookie-cutter manufacturer in January, Steve Montanez noticed a longtime supplier was having trouble providing the food coloring used in its products.

"It was a 12-week lead time and then, when 12 weeks came around, it was, 'Oh jeez, Steve, I'm so sorry. It's going to be 16 weeks,'" Montanez said.

The company, Ann Clark Cookie Cutters, makes about 30,000 tin-plated steel cutters each day and needs food coloring for the cookie-decorating kits it sells online.

So Montanez, an accountant who used to own the chocolate company Vermont Truffle, researched how to make food coloring. By mid-June, his new employer had purchased a food-coloring mixer from Italy and was building a clean room to make it in-house.

The company will include its own food coloring in holiday cookie-making kits this year.

"I could not be happier," said Montanez, who is now Ann Clark's food operations director and in charge of new product development.

Such global supply-chain problems are affecting businesses around the world — and prompting companies in Vermont to get creative.

Factories and shippers are short-staffed; some have shut down. Many of the materials needed to manufacture items in the U.S. are stuck overseas in the supply pipeline. Consumers, meantime, have been spending freely on items such as household goods and recreational gear, driving up demand. Factories went into overdrive to meet demand — leading to a backlog of containers piled high at ports, and cargo ships idling in harbors, waiting to be unloaded.

Ann Clark had the means to adapt, investing $400,000 in machinery to manufacture food coloring. But most businesses can't make everything they use, so they're stocking up any way they can and asking customers to be patient.

To help businesses weather the new supply-chain problems, the Vermont Manufacturing Extension Center published a white paper this year that outlines the advantages of finding local sources for materials. For one, it's easier to establish a trusting relationship with suppliers who share a language and culture, the report says.

"[Having] overseas suppliers means living with tariffs, global politics and economies, and natural disasters in faraway places," it reads. Business ethics and avoiding knockoffs are another concern. "The U.S. has some of the strongest [intellectual property] protections in the world, so working with a domestic supplier decreases the chances of IP theft."

Copeland Furniture in Bradford buys its wood in the northeastern U.S., but that domestic supply, too, is harder to get. The demand for household goods has sent hardwood prices soaring. Sawmills were closed in the early months of the pandemic, creating a backlog of orders, said Ben Copeland, the director of sales and marketing.

Shipping costs have also climbed sharply. It once cost a company about $1,500 to send a 40-foot container by sea from Shanghai to the West Coast, according to Chris Brennan, trade lane manager for A.N. Deringer. The St. Albans company is the largest privately owned customs broker in the country. It now costs $10,500 to ship that cargo, Brennan wrote on Deringer's blog — a 600 percent increase over the seasonal average of the last five years, he said.

Air freight costs, too, have risen 400 percent since before the pandemic, Brennan wrote.

Copeland is grateful that there's so much demand in the furniture market. But he's had to raise prices three times in the last 12 months.

"Everyone in the business is doing that," Copeland said. "It's unprecedented."

Goods are still moving, but unpredictably. That's easy to see at grocery stores, where empty shelf spaces appear and disappear. Ray Bouffard, who owns Georgia Market, said that because he buys his wares from four small distributors, he's in a better position than larger grocers, such as Hannaford, that have their own warehouses. When one of Bouffard's distributors is out of something, he calls another, and often they have it.

"It's a moving target; the market is very much fluctuating," Bouffard said. "You might be out of something temporarily; it might be a couple of weeks. But if you're out of Green Giant corn, you have Del Monte or private label. You have corn on the shelf — just not the one you're necessarily looking for.

"My customers are happy as heck that we have toilet paper on the shelf," he added.

Cindra Conison with her dogs Cuba and Aria at the Quirky Pet in 2019 - FILE: JEB WALLACE-BRODEUR
  • File: Jeb Wallace-Brodeur
  • Cindra Conison with her dogs Cuba and Aria at the Quirky Pet in 2019

As with Copeland Furniture, the Quirky Pet, a small specialty store in Montpelier, only sells American-made products. But dried animal parts that owner Cindra Conison retails as dog treats, such as chicken and duck feet, are unavailable. Slaughterhouse suppliers have told Conison they're slowed by the labor shortage.

The Northeast Kingdom Artisans Guild draws its inventory from a very local area: Vermont and a small part of neighboring New Hampshire. But longtime board member and cofounder Amanda Weisenfeld said the St. Johnsbury store has run out of paper goods needed at the counter, such as cardboard jewelry boxes. To prepare for the holiday season, she has stocked up on boxes, bags and tissue paper.

So many customers are looking for original works of art that the guild's artists can barely keep up with demand, Weisenfeld said.

"People are buying like crazy," she said, noting that her peers at other art stores are experiencing the same thing. "The galleries, we're all sort of holding our breath and waiting for this amazing shopping spree to end."

Copeland has four times more furniture orders than usual, so delivery is taking weeks longer. There's not much the company can do except ask customers to be patient. Early on, he said, some complained.

"I would say the vast majority of people now understand," said Copeland, whose father started the Bradford manufacturer in 1975. "They have encountered it on just about anything they have wanted to purchase."

Back in Rutland, Ann Clark shipped its first batch of the Vermont-made food coloring to Amazon on October 29. It also sent samples to 65 cookie-decorating influencers a few days later.

CEO Ben Clark — whose mother started the company in 1970 — is certain that his company is the largest supplier of cookie cutters in the country, and he's pretty sure it is the largest in the world. Cookie decorating is a big business, and Ann Clark is one of the star attractions at the annual gathering known as CookieCon, in Reno, Nev.

Many of the top cookie-design artists have hundreds of thousands of Instagram followers. Georganne Bell (@lilaloa_cookies) of Salt Lake City has designed cookie cutters for Ann Clark, and the company pays her royalties.

"She's one of the top players in the game," Clark said.

Ann Clark faces keen competition from cookie-cutter makers in China, where labor prices are much lower. And though it briefly halted production over the summer due to a lack of steel, the company's U.S. sales could benefit from supply-chain and shipping issues as the holidays loom.

"Are those Chinese cookie cutters already here? Are they on a boat stuck offshore someplace?" Clark asked. He thinks the latter is likely.

Last year, Ann Clark's custom cookie-cutter business — popular with clubs, teams and companies that want cookie cutters in the shape of their logo — was bigger than usual. This year, he expects that demand to grow.

"Everything is made in China," Clark said. "So suddenly, they're going to call us."

The original print version of this article was headlined "Supply and Demanding"

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