As I reflect on these last few years (and 2023 specifically), I can’t help but think that it’s all felt like one long rollercoaster. In 10 or 15 years, somebody’s going to look back at financial statements from 2020-2021 and think, “What the heck was going on there?”
For a while, it seemed like most rules of thumb or business trends you could lean on were all thrown out the window. Events unfolded as they never had before, and it was just one unexpected thing after another. That being said, while 2023 did still present its fair share of challenges, I’d say the past year has represented a return to stability, generally speaking.
Simmons’ supply chains have improved dramatically, meaning we can get blades into our customers’ hands faster. The labor shortage we experienced in 2022 is now a thing of the past. Lastly, our input costs started to stabilize, which allowed us to minimize the pricing impact to our customer base. Overall, market conditions returned to a much more stable level. We didn’t see the wild swings of the past few years, but we were still forced to weather the tail-end effects of the pandemic. However, a slower fiscal year provided Simmons with the opportunity to make concerted efforts to further enhance our manufacturing processes and offer new products to our customers. It also allowed us to take some great strides forward regarding our sustainability initiatives, all of which have set us up for continued growth and success in the coming years.
Challenges and Setbacks
2022 was certainly a banner year from a top-line perspective. However, 2023 presented some unexpected challenges. Notably, the US government stopped injecting money into the economy, which left consumers with less discretionary income to spend on products our blades are used to create. That reduction in income combined with heightened inflation led to a significant softening in the foam industry and other markets Simmons serves. Many of our existing customers saw a decrease in demand for their products compared to the peak of the pandemic. As a result, the demand for Simmons’ blades also saw a considerable dip, making it challenging to replicate the top-line achievements of 2022.
On the bright side, 2023’s softened demand did allow us to take a step back and identify ways to streamline our operational processes. It also allowed us to make capital investments to improve existing products and introduce some brand-new products, which I’ll touch on more below.
Innovations and Process Improvements
Despite its challenges, Simmons brought some exciting new production capabilities online in 2023. These capabilities not only expanded our capacity but also paved the way for enhanced blade offerings.
- We added a new carcass-splitting blade and a full line of skinner blades.
- We also greatly expanded our selection of packaging knives to cater to the full range of blades required in the meat, poultry, and fish processing industries.
- We leveled up our customization capabilities to create Scallop blades with blank ends, which are commonly found in the bread slicing and food processing industries.
- Lastly, we added our first brand-new product in years in the form of a CNC blade designed for difficult-to-cut foams.
I expect all these new capabilities (and more I haven’t listed here) to set us up for some very profitable growth over the coming years.
Commitment to Sustainability and Social Responsibility
Sustainability is something that is really important to me personally, so I’ve made sure it’s important to Simmons as a whole.
In 2019, we installed almost 1,300 solar panels on the roof of our manufacturing facility. In 2020 and 2021, we didn’t make much progress regarding our sustainability initiatives due to effects of the pandemic. However, that changed after we established the Simmons Green Team in late 2022. Our Green Team is comprised of people from various departments within Simmons that are passionate about being good citizens of Earth. They’ve provided a ton of great ideas regarding sustainability and social responsibility initiatives and we began to act on those ideas throughout 2023.
We plan to provide a closer look at what Simmons’ Green Team has accomplished thus far next year, but until then I’ll say that I am proud of the strides we’ve made toward reducing waste, improving our recycling capabilities, and collaborating with like-minded local businesses in 2023. Of course, we plan to further enhance our sustainability initiatives in 2024.
Looking Ahead to 2024
From a top-line perspective, the past year didn’t turn out quite like we had hoped it would. However, I found tremendous relief in the fact that we didn’t see the unprecedented economic swings and unpredictable events of the past few years. I also found myself extremely proud of the way the Simmons team capitalized on the more stable landscape to streamline processes, ensuring efficiency and flexibility in the face of unexpected market conditions. The improvements we’ve made to our existing products and processes and our investments in new products and capabilities will only become more important moving forward.
As 2023 winds down, I feel confident in saying that Simmons is leaner than ever before, more adaptable, and ready to take advantage of emerging opportunities in 2024 and beyond.