Alliant hunting sales score a bull's-eye

On Wall Street, Alliant Techsystems is known for its military brawn and missile prowess.

But with that market somewhat subject to political winds as the presidential election approaches, the Eden Prairie-based company is aggressively pursuing the other sides of its business, notably hunting.

Last year the $4.2 billion defense contractor launched a series of TV commercials on the Outdoors and Versus channels that promoted its new ammunition for hunting duck, pheasant and grouse. This month, Alliant's new 48-foot marketing trailer made the rounds at Gander Mountain, Mills Fleet Farm, Bluewater Bait & Tackle and Outdoorsman Headquarters stores in Minnesota in Wisconsin to showcase Alliant's hunting stuff.

Such public outreach to "Joe Hunter" is a decidedly different approach for the defense giant better known for its precision-guided missiles, sensors, satellite parts and the rocket boosters that blast astronauts into space. True, Alliant is also the largest small-caliber ammunition maker in the world. But the bulk of those products sell to the U.S. Army for training exercises, not to those chasing Daffy Duck.

Analysts note that the new, intensified outreach to fowl hunters is one in a series of calculated moves designed to diversify the company's product set.

Analyst Loren Thompson, defense consultant for the Virginia-based Lexington Institute, has watched Alliant, also known by its ATK ticker symbol, ramp up commercial-product offerings to include aircraft parts, satellite components, nuclear centrifuges and sports ammo.

Alliant is "generating a significant amount of cash these days, but they don't want to get a lot bigger in their core military markets. The truth is, defense spending is going to level off and there won't be a lot of money for new [military] programs. So, they want to buy into adjacent areas where they see growth prospects," Thompson said. "Getting bigger into hunter ammunition and aircraft is part of the much broader idea of diversifying ATK."

And it's working, he said, partly because Alliant is beefing up its image as the maker of high-tech ammunition for determined hunters who crave deadly accuracy and pure precision products.

Its boxes of sports ammunition "are bright and colorful. They make other companies look like they are selling Band-Aids," Thompson said. "The way ATK is trying to diversify is pretty smart. What they are pursuing is affordable innovation."

Jason Nash, spokesman for Alliant Techsystem's Commercial Products Division, said the company embedded technology in its waterfowl ammunition to make it the best in the industry.

The newly introduced Black Cloud duck ammunition "does two simple things: It gets there faster and it hits them harder."

The company has always advertised its Federal Cartridge sports ammo in hunting magazines. But the jump to cable TV and sporting goods stores has paid off handsomely. Sales of Black Cloud and its Fusion grouse and pheasant ammo have taken off since the ads began running, Nash said.

Black Cloud ammunition sales have been in the tens of millions of dollars, meaning millions of boxes of ammunition have flown off store shelves in a little over 14 months, Nash said.

"Black Cloud is just for targeting the hard-core duck and goose hunter. That is a passionate audience," Nash said. "That consumer tends to be passionate about what they do."

Alliant does not break out its commercial sales. However, ammunition sales leaped 32 percent to $442 million during the last quarter. While the bulk of that jump came from ammunition sales for Army training, duck-shot sales were also firmly in the mix, officials said.

Company spokesman Bryce Hallowell said Alliant's hunting products surged to become first in the industry, supplanting former market leaders Remington and Winchester.

"In the commercial world, the company has really excelled by doing two things. We have created a really aggressive advertising campaign and then we have made a conscious effort to ramp up the introduction of new products," Hallowell said. "It's not just ammunition but also the accessories. Those have really propelled the growth of our Commercial Products Division."

Thompson said more changes are probably coming as Alliant Tech focuses on a two things: new commercial products and "cheaper military solutions."

If the Iraq war ends, "The defense budget will tighten up, but military requirements don't go away. The military just starts looking for cheaper solutions," Thompson said.

Last month, CEO Dan Murphy said that Alliant remains on track to become a $4.5 billion company, up from $4.2 billion last year.

Dee DePass • 612-673-7725