As global supply chain disruptions continue to wreak havoc across industries, Sharpie maker Newell Brands has emerged as an unlikely beneficiary of its domestic manufacturing strategy. While competitors grapple with shipping delays and material shortages, the Atlanta-based company has gained market share in its writing instruments segment.
I. The Unexpected Advantage of Domestic Production
Newell Brands CFO Chris Peterson revealed during the Q2 earnings call that the company's writing business outperformed at least one competitor primarily because most products are manufactured in the United States. This domestic production model has insulated the company from ocean freight delays, port congestion, and component shortages plaguing import-dependent rivals.
The advantages of U.S.-based manufacturing include:
- Reduced transportation costs and risks: Eliminates volatile international shipping rates and lengthy transit times
- Faster delivery cycles: Proximity to market enables quicker response to demand fluctuations
- Enhanced quality control: Tighter oversight of production processes and standards
- Greater resilience: Faster recovery from geopolitical or natural disruptions
"Supply capability could become a real advantage for our writing business," Peterson noted, highlighting how operational stability has become a competitive differentiator.
II. Market Share Gains During Back-to-School Season
CEO Ravi Saligram reported market share expansion in gel pens and other writing products as demand rebounded with school reopenings. KPMG research shows 2021 back-to-school spending projected to grow 9% year-over-year, while S&P Global Market Intelligence data indicates writing product imports remain below pre-pandemic levels despite increased demand.
"With more schools returning to in-person learning, writing instruments are seeing broad-based recovery," Saligram said. "Our share gains in key categories like pens, markers and highlighters translated to significant consumption in the U.S. market."
The writing segment's core sales grew over 25% - outperforming company averages - with Saligram expressing confidence in maintaining this momentum.
III. Persistent Supply Chain Challenges
Despite the writing unit's success, approximately one-third of Newell Brands' products sourced from Asia continue facing supply constraints. Peterson identified multiple pressure points:
- Container shortages and freight rate volatility
- Extended Asia-U.S. shipping times
- Domestic trucking capacity limitations
- Labor shortages affecting production and logistics
- Raw material and component scarcities
"This environment isn't unique to us - all competitors face similar challenges," Peterson noted, while Saligram acknowledged Asian sourcing would remain problematic.
IV. Strategic Implications for Supply Chain Management
Newell Brands' experience offers several insights for corporate supply chain strategy:
- Diversified sourcing: Balance domestic production with global supply networks
- Reevaluation of nearshoring: Reassess total cost of overseas manufacturing
- Data-driven decision making: Monitor market conditions and competitor vulnerabilities
- Risk mitigation planning: Develop contingency plans for critical components
- Supply chain agility: Build flexibility to adapt to changing conditions
V. The Future of Supply Chain Resilience
The current crisis is accelerating supply chain transformations, with companies reconsidering production footprints and investing in digital technologies like blockchain and IoT for enhanced visibility. Organizations demonstrating supply chain resilience like Newell Brands' writing division may gain lasting competitive advantages in this new environment.
As supply chain disruptions persist, the ability to reliably meet demand could reshape industry leadership across multiple sectors. Newell Brands' mixed performance across business units illustrates both the benefits of domestic manufacturing and the ongoing challenges of global supply networks.