October 7th, 2020 – For the longest time, American manufacturers had a simple and straightforward positioning statement.
This was a narrative that consumers, employees, and investors could get on board with. Products that were made in America were considered better quality than products made abroad. Another bragging point for American manufacturers was the fact that they were hiring American employees, and sourcing their materials from American suppliers.
But, what happens when American manufacturers are competing with other American manufacturers? What is the value proposition of a given company if everyone in a market sector can say ‘Made in America?’
This is the conundrum that many American manufacturers are facing today. Manufacturing products in America typically involves higher cost of goods sold (COGS). Since the cost to build products is higher than production over seas, the price points tend to be higher for American made goods.
But, what if there was a way for American manufacturers to compete on cost with others in their industry who are producing goods abroad?
American manufacturers rely on commodity level pricing for all of their input materials:
These are the products whose price points determine the input costs for American manufacturers. The higher the input costs (COGS), the higher the price point for the customer.
The reason why American manufacturers utilize these products is because there is a reliable supply chain available. Rare materials are great for research and development (R&D), but rarely have the supply necessary to sustainably source for a product that is manufactured at scale. This leaves American manufacturers toying around with the same types of materials year after year.
But, today there is a new world of opportunity that lies in farms across the country. Industrial hemp can be added to, or used as a replacement for, all of the 5 input materials above.
Hemp-based materials allow manufacturers to produce stronger, lighter, cheaper, and more eco-friendly end products.
American manufacturers now have the ability to test hemp materials to determine if the plant can provide the structural integrity necessary for the end product. If the engineers, chemists, and physicists within the R&D labs of American manufacturers can determine that hemp materials could be utilized within the end products, they have the opportunity to revolutionize their industries.
The addition of different parts of the hemp plant (refined to certain sizes) is the X factor that can unlock value previously unseen by American manufacturers.
Within 10 years, stronger, lighter, cheaper, and more eco-friendly products will be common place. All American manufacturers will use sustainably sourced materials in their products, eventually. The question is, who is going to be first? Who is going to lead their industry? The people who wait till 2030 will be years behind the competition.
Heartland Industries is creating a reliable supply chain of hemp-based materials that American manufacturers can trust. These materials make products manufactured in America stronger, lighter, cheaper, and more eco-friendly.
Those manufacturers who choose to leverage the strengths of the hemp plant, and develop a reliable supply chain, will be at the top of their industry in the next decade.
– Heartland Team