Pens, Mechanical Pencils, and Parts

SIC 3951
PENS, MECHANICAL PENCILS AND PARTS

This industry contains establishments primarily engaged in manufacturing pens (including ballpoint pens), refill cartridges, mechanical pencils, fine and broad tipped markers, and parts.

NAICS Code(s)

339941 (Pen and Mechanical Pencil Manufacturing)

Industry Snapshot

In the late 1990s, pens alone generated $1.7 billion in annual sales, according to the Writing Instrument Manufacturers Association. Total industry shipments climbed from $1.55 billion in 1999 to $1.59 billion in 2000, although they remained lower than their 1998 peak of $1.73 billion.

Nearly 50 U.S. companies manufacture writing instruments that are sold in the United States and throughout the world. The ballpoint pen, introduced to the U.S. market in 1945, continues to dominate writing instrument sales. Combined sales of markers/highlighters, roller ball pens, and mechanical pencils represent about the same market share as ball point pens alone.

Organization and Structure

Manufacturers and suppliers of pens and other writing instruments traditionally have been large public companies, such as BIC Corp., and conglomerates, like the Gillette Co., which sell writing instruments and other non-writing related products.

Writing instruments are sold to wholesalers and retailers and then are resold to consumers through fine jewelry stores, stationery and office supply stores, department stores, discounters, mass merchandisers, catalog showrooms, and specialty stores. Pen manufacturers not only produce writing instruments but also are responsible for marketing and selling these products to retailers and consumers.

Background and Development

The Pen. The earliest writing instruments were developed during the ancient civilizations of China, Greece, Egypt, and Mesopotamia nearly 5,000 years ago. Mesopotamians used wooden styluses to impress their characters on wet clay tablets. The Egyptians used hollow reeds to apply ink on sheets of papyrus, while the Chinese drew ideograms with brushes made from animal hair.

The Europeans began to use goose quills as ink pens in the sixth century, and this practice grew rapidly during the Middle Ages. Flocks of geese were specifically bred for their feathers as quill production became an important industry throughout Europe. For nearly 1,000 years the quill pen remained the most popular writing instrument.

In the nineteenth century, however, the steel pen replaced the quill. The steel pen point, or nib, first appeared in England sometime between 1790 and 1803, but this product was not manufactured efficiently or economically until the 1830s. In another 50 years American inventor Lewis Edmon Waterman created the fountain pen, which features its own self-contained ink supply. Waterman's product ushered in a new generation of writing instruments that dominated the first half of the twentieth century. His basic design, which includes a metal nib, a built-in ink supply, and an outer shell, are still the main components of fountain pens today.

Fountain pens experienced a resurgence in popularity at the end of the twentieth century. According to retailers, most fountain pens were purchased by individuals or corporations for use as business gifts or promotional items. Two reasons for the fountain pen's popularity were its association as a status symbol and its improved technology, most notably replacement ink cartridges.

Ball Point Pens. The ballpoint pen also dates back to the late nineteenth century. This type of pen consists of a metal ball that is housed in a socket and rotates freely. The ball, constantly covered in ink from a reservoir, rolls across a writing surface.

Commercial models of ballpoint pens appeared in 1895 and the first satisfactory model was patented in Argentina by the Hungarian Lazlo Biro. His ballpoint pen, commonly called the "biro," soon became popular in Great Britain during the late 1930s and 1940s. The ballpoint pen was introduced to the U.S. market in 1945. U.S. manufacturers quickly adopted the new design and soon dominated worldwide production in the ballpoint pen industry. By the late 1990s more than three billion ball point pens were manufactured each year in a variety of styles, point sizes, and colors, with prices ranging from no-frills disposables selling for $1.00 a dozen to state-of-the-art, solid gold retractables costing hundreds of dollars.

Felt-Tip Pens. In 1964 the porous-point or "felt-tip" pen was developed in Japan. Papermate's Flair model was among the first felt-tip pens to hit the U.S. market in the 1960s, and it has been the leader ever since. Following their initial success with felt-tips, manufacturers branched out with a variety of fiber-tipped instruments, including highlighters.

Roller Ball Pens. The most recent large-scale innovation in the writing instrument industry is the roller ball pen, which was introduced in the early 1980s. Unlike the thick ink used in a conventional ballpoint, roller ball pens employ a mobile ball and liquid ink to produce a smoother line. Technological advances achieved during the late 1980s and early 1990s have greatly improved the roller ball's overall performance.

Current Conditions

The industry's 112 establishments shipped $1.59 billion worth of goods in 2000, a 21 percent increase from the $1.31 billion shipped in 1995, but an 8.8 percent decrease from the $1.73 billion shipped in 1998. The country's leading production states are Tennessee, Rhode Island, and Wisconsin.

Industry Leaders

BIC Corp. Connecticut-based BIC Corp. is one of the largest manufacturers and distributors of ballpoint pens in North America. BIC ballpoint pens are available in nonretractable, non-refillable models and retractable, refillable models, as well as in various ink and barrel colors and point sizes. BIC also manufactures highlighting markers and roller pens and distributes mechanical pencils.

Gillette Co. More commonly associated with men's shaving products, Boston-based Gillette has become a leader in the writing instruments industry. With the low-price Papermate, mid-price Parker, and high-end Waterman franchises, Gillette has established a strong position in the industry at all price levels, distribution channels, and geographic areas.

Gillette built its leadership position in the writing instruments market through the acquisition of Waterman in 1987 and Parker Pen Holdings Ltd. in 1993. After its purchase, Gillette soon began to sell Waterman fountain pens at discount outlets in the United States. Francine Gomez, then chief executive of Waterman S.A. and a third-generation family operator, was displeased with this decision. Although sales increased 40 percent since the Gillette takeover, Gomez argued that the company's marketing strategy in the United States devalued the luxury image of Waterman in France. Gomez resigned from the company in 1988.

A. T. Cross Co. Based in Lincoln, Rhode Island, A. T. Cross Co. has been a major international manufacturer of fine writing instruments sold to the consumer gift market through stores worldwide and to the business market via a network of companies specializing in recognition and awards programs. Cross products include ballpoint pens, mechanical pencils, rolling ball/porous-point pens, and fountain pens.

Other major U.S. companies in this industry are Illinois-based Sanford Corp., Philadelphia's Hunt Corp., and Tennessee-based Berol Corp.

Workforce

The industry employed a total of 8,153 people in 2000, roughly 30 percent of whom worked in Tennessee and Rhode Island. The 6,000 production workers who manufactured pens and mechanical pencils earned an average hourly wage of $14.16.