Happenings in Nazareth: C.F. Martin & Company in 2017

MMR recently chatted with senior officers of C.F. Martin & Co. to learn about developments of note the storied guitar manufacturer, what instrument introductions have been making waves of late, how recent import and trade regulations are effecting the company, and how they view the current state of the acoustic guitar market. 

It’s been a busy year for Martin already – the third Ed Sheeran Signature model, the Jason Isbell Signature, et cetera. What’s been the early reaction to these new instruments from both dealers and players? 

Michell Nollmen, VP of global marketing and sales: We were very pleased with our Summer NAMM results. We launched the allnew D28 (2017), which has been very well received by dealers and distributors worldwide. The new D28 (2017) features an aged toner top, open gear tuners, antique white binding, forward shifted bracing, a tortoise pickguard and a high performance neck taper. The new D28 sets a new standard for one of the most popular acoustic guitars ever made. We think that every Martin Dealer, everywhere in the world, should always have the new D28 (2017) available for consumers to play at their store. 

We also debuted the Ed Sheeran and Jason Isbell signature models, which were very well received. And the StreetMasterTM, a D-15 and 000-15, with a vintage look, created much excitement and interest at the show. Finally, for only those who attended Summer NAMM, we had a show special, the SS-00l Art Deco-2017 and we sold out of this limited edition guitar. 

How would assess the state of guitar market at the moment, specifically acoustic guitar? 

MN: Sales for 2017 have been challenging. While business seems to have stabilized somewhat, we see challenges now and in the midterm. New CITES regulations hampered our first quarter results as we scrambled to ship guitars and strings to our distributors outside the U.S. Between lower priced guitars from Asia and changes in the retail landscape, due to consumer shopping habits, the marketplace for acoustic guitars won’t be easy. 

Our sales, year to date, are slightly behind last year, but they are close to what we expected. We had a great first quarter in 2016 and with the challenges already mentioned, we had a hard time reaching the same levels this year. As we launch our new models and work collaboratively with our dealers and distributors to generate demand for our guitars, we are confident that business will be better but recognize the challenges we all face in the acoustic guitar market.  

The “aged” custom guitar process created a lot of buzz in Anaheim this past January. What was the catalyst for coming up with the process and how as it been received in the months since Winter NAMM? 

Jeff Allen, senior director of global manufacturing and operations: We had a great response to the Aged guitars and immediately sold out of the initial run at the NAMM Show this year. It’s very exciting. New guitars that have been aged to appear older isn’t a new concept since many of our competitors already have very seasoned programs where they have been offering distressed or aged models for many years. One of the motivators for us to pursue an aged program at this time was the used market. There are a lot of musicians out there who already own one or more Martin guitars and would like to have the resources to acquire an older 1930s or 1940s Martin.  

Finding that perfect older Martin and then the cost of purchase can be somewhat prohibitive. Some of those older guitars can cost three-to-five times what our new aged guitars would sell for. There are several added benefits to owning a new aged guitar other than cost versus an old Martin. Our tooling and manufacturing process is second to none and you also get a lifetime warranty on a new purchase. All of those benefits motivated our customers and dealers to ask for an aged product. Being a guitar player, it’s easy to see the allure of a guitar that has been painstakingly aged to mimic the appearance of a 1930s era Martin. 

The process however, is quite different from other brands whose aged product is primarily on electric guitars. We had to start from scratch and learn how best to age an acoustic. The inside of the body has exposed wood; no finish applied to the inside of the body. This feature, along with a more delicate finish and no paint, created some challenges. We went into our museum and reviewed dozens of our original ‘30s and ‘40s era guitars to see how they have fared all these years. We paid close attention to the wear marks, how the lacquer is cracked, the shape of the small impact dents, the edge of the fingerboard, and even the inside of the body. We knew we had achieved our goal when we were able to fool many people into thinking our Aged Proto was the real thing. 

We wish we could make more aged guitars more quickly but, the fact is, the process isn’t fast at all. The aging process takes time. We are producing our Aged guitars one at a time and only a few people work on them. The process is very involved and time consuming. I wish it were as easy as taking steel wool to the finish and dinging the body but each detail is lovingly reproduced so that the wear appears as if the guitar has been loved for decades. It takes roughly twice as long to build an Aged D-28 Authentic than a non-Aged D-28. Seems like it would be simple, right? Just take a new guitar and rough it up. But we don’t do “simple” at Martin. It’s got to be as authentic as possible and that takes time and patience and a lot of experience. We’re creating a guitar that doesn’t just look older, or sound older, or feel older – we’re creating a new guitar that actually has a half-century’s worth of mojo. We have great passion for this process and these instruments. That’s the key – making something you love and something you can be proud to own yourself. 

Any thoughts on the climate post-rosewood and Bubinga import regulations that took effect this past January? How has it impacted Martin’s ability to acquire tonewoods? How difficult is it to ensure compliance with the new standard? 

Frank Untermyer, director of supply chain management: With only 90 days’ notice prior to the listing Dalbergia (rosewood) and three species of Guibourtia (Bubinga) on CITES Appendix II on January 2nd, Martin Guitar – like the entire industry – faced an extremely tight time line and a significant burden in adhering to the new regulations. The CITES listings impact both the import of Rosewood and Bubinga as well as the export of finished goods containing either of those woods. This represents a significant departure from prior CITES II listings, such as Swietenia macrophylla (big leaf mahogany), where a CITES annotation exempts finished goods. 

Because we have long exported limited numbers of guitars containing from Dalbergia nigra (Brazilian rosewood) which is listed on the more highly regulated CITES Appendix I, Martin Guitar already had extensive experience with CITES. Martin has long supported sustainable wood harvesting, being an industry leader in offering guitars built from sustainable wood, maintaining a membership with Forest Stewardship Council (FSC) and purchasing FSC certified wood whenever possible. Martin has a strong relationship with United States Fish & Wildlife Service (USFWS), the United States CITES management authority. USFWS support in negotiating the permitting process was most helpful. We consider USFWS to be a genuine partner. 

Approximately 40 percent of Martin Guitar’s sales are comprised of exports. As we only received our first permits in mid-January, the CITES listing caused a significant backup in our export process and associated forgone sales opportunities. In addition to developing our own systems, an additional hurdle was the education of our international distributors regarding how we would work together in coordinating permitting. The entire European Union, as well as a number of other countries, requires import permits. Dealing with different interpretations of the CITES regulations from country to country has proven to be challenging. Nonetheless, without exception our distributors have worked closely with their management authorities to smooth the permitting process. We now have a workable export process in place. However, ongoing management of the process is required to insure regulatory compliance while maintaining a smooth export flow. 

Production scheduling and requisite inventory levels have also been impacted by CITES. Due to permitting delays we are now scheduling production to be completed on our CITES export shipments weeks prior to the planned ship date. While we do make some non-CITES export shipments of our Navojoa built instruments, the vast preponderance of our exports must be permitted. Having any rosewood guitars on a shipment – which Martin Guitar invariably has – triggers the permitting requirement. 

One need only look at the strong trade in vintage Martin guitars to recognize the long life of an individual guitar. An instrument can be exported and re-exported any number of times. Reverse logistics, the return of instruments from international customers, also requires the issuance of CITES permits. When guitars are returned to our Nazareth facility (for repair or any other reason) the international customer must obtain a re-export permit. When we then ship the instrument back to the customer another re-export permit is required and, most often, an import permit from the management authority in the destination country is also required. This endless loop of permitting presents a real industry burden and has resulted in a decline in cross border guitar sales, with some retailers exiting the market. 

Compounding issues, all of the permitting is paper based, requiring validating stamps and signatures. The result is that original documents – which could easily be lost or misplaced – are being sent around the world. Working with Congressman Matt Cartwright’s office (Pennsylvania 17th District), reports have been drafted that accompany appropriations bills for USFWS and Customs and Border Patrol (Homeland Security) recommending funding of electronic permitting in the United States. Even if the appropriations bills are not entered into law we are optimistic that the reports’ recommendations will proceed under a continuing resolution. 

This could be the first step in the coordination of an international electronic permitting process. The importation of Dalbergia has presented another hurdle. Much of the rosewood used for guitars is Dalbergia latifolia (East Indian rosewood). The Indian government regulates the harvesting and sale of East Indian rosewood. Accordingly, it is referred to as “controlled wood.” As a result, the Indian government filed a “reservation” (in effect an objection) with CITES to the Dalbergia listing. The situation remains in a state of flux. The Indian government first did not issue any CITES export permits, then issued some for a limited period and, as of this writing, once again is not issuing CITES permits. India’s preference is to issue alternate export documentation. Our concern is whether the USFWS will accept the Indian government’s documentation in lieu of a CITES export permit. Unfortunately, the Indian management authority did not attend the CITES Plants Committee held this past July in Geneva, where the Dalbergia and Guibourtia listings were discussed in depth. Martin Guitar was represented and is participating in two working groups on the issue. Some years ago Martin Guitar built a strategic wood inventory for just these types of emergencies. As such, we have not experienced any impact on production. 

In the months since regaining ownership of Martin trademarks in China, has the company been able to verifiably observe that the situation over there has improved? In general, what are your thoughts on counterfeit instruments – do you feel it’s a problem that’s improving or getting worse? 

Cynthia L. McAllister, director, intellectual property and community relations: The counterfeiting of famous brands such as Martin will persist for the foreseeable future. By regaining ownership of our trademarks in China, we were able to record these trademarks with China Customs (GACC) and have uploaded photographs to the China Customs database to assist enforcement agents in distinguishing authentic from counterfeit Martin guitars. This strategy supplements our recordals with U.S. Customs and Border Protection. Additionally, we are brand members of the International AntiCounterfeiting Coalition (IACC). We participate in the IACC MarketSafe program, which provides unique opportunities to develop a productive and sustainable partnership with Alibaba to combat online counterfeits. 

Have you been noticing any significant trends in the acoustic guitar market so far in 2017? 

MN: We see more of a continuation of existing trends. One of those trends is toward small-bodied acoustic guitars and we continue to provide a great offering to stay ahead of that trend. As a matter of fact, Martin has been in the small-bodied guitar business for 184 years! We also see a lot of interest in distressed or aged guitars. Players are looking for that vintage tone and feel in a new instrument. This is another trend we are right in line with. Strong independent music stores continue to be a place where people can try an instrument before purchase but people are increasingly open to purchasing expensive instruments online. We are finding that, for features, people at the higher end are typically ooking for a purpose driven instrument. They want a guitar that brings joy through its sound and playability and helps to inspire them to play more and just enjoy creating music. 

Are there any upcoming developments, events, or product introductions in the coming months that you’d like to share with our readers? 

MN: We have some really exciting products in the works for 2018. Please be sure to visit us at Winter NAMM. You won’t be disappointed!