Sorting out a puzzling problem- Part 1

It’s a challenge many businesses around the world are currently experiencing- the impacts of tariffs on small artisan businesses. Each segment of our industry faces some similar challenges, and some unique ones. In the last few weeks, I have been picking up several pieces to what is happening in the puzzle industry. You should be warned- I love puzzles and I love puns, and I am trying to keep a lighthearted approach to articles that are very challenging. Let’s start putting together the pieces.

Digging in to the puzzle industry, it is surprisingly challenging to get statistics. Puzzles are often lumped into the broader category of games. And those reports that break out the industry vary in reporting a few hundred million a year to over a billion a year as the size of the market. Like many industries- there are some large manufacturers, and a robust artisan puzzle market.

For reference, I’ll call the larger manufacturers big puzzle as I refer to them later in the article. They are companies like Ravensburger, Springbok and Cobble Hill just to name a few.

How many people are puzzle regulars?

While it is hard to find sales data for the industry, there are different ways to measure its impact. In 2019, Ravensburger commissioned Ipsos to run a study on the puzzle industry, and here is what they learned. Interestingly enough, this study was before COVID.

“Nearly half (48%) of American adults enjoy puzzling at least once a year – that is, jigsaw puzzles meant for adults (e.g., those that have 500+ pieces) – including one in five who say they puzzle monthly/weekly/daily (19%). Those most likely to enjoy puzzling at least monthly include men (24% vs. 14% of women), younger adults (34% of 18-34-year-olds vs. 10% of those age 55+), and those with children living at home (28% vs. 15% of those with no kids).” Source: Ipsos Study on puzzles

So let’s take you and a close friend. One of the two of you is a puzzler at least once a year. And add three more friends- one of the five of you puzzles regularly. It’s a much larger industry than most people realize. We just don’t talk about it that much as its often a solitary endeavor.

“Those who puzzle are most likely to do so by themselves (59%) - though three in ten (29%) enjoy puzzling with their spouse/partner and just over a quarter puzzle with their children/grandchildren (26%). Puzzling with other family members (16%) or with friends (13%) is not as common, though more than one in ten nevertheless do.” Source: Ipsos Study on puzzles

How did puzzles get to be such an ingrained part of our culture?

Puzzles as part of our culture

I reached out to Anne D. Williams to learn more about the history of puzzles in America. She is a jigsaw puzzle historian and author. I asked her how she started in this industry. She shared:

“I have always like puzzles. I started collecting puzzles in the 1970s. Around 1980 as my curiosity grew, I started doing more research on the history of puzzle. One thing led to another. I published my first book on puzzles in 1990 and then my second in 2004. I’ve also curated a number of puzzle exhibitions”.

Her article in the American Journal of Play on Adult Puzzling and Hard Times is a must read. It’s a fascinating look comparing and contrasting puzzling during the great depression and COVID. Let’s rewind to the great depression.

During the Great Depression, interest in Jigsaw puzzles grew. Existing manufacturers like Parker Brothers had to scale just to keep up with demand. You’ve heard of Parker Brothers, right? It’s the company behind the games Clue, Monopoly, Risk and Sorry.

“Parker Brothers marketed its first jigsaw puzzle in 1887. Parker also produced children's puzzles, as well as the Climax, Jig-A-Jig, Jig Wood, and Paramount lines.” Source: Wikipedia

“At first, people did traditional wooden puzzles, cut by hand using a jigsaw, also known as a scroll saw. These puzzles were relatively expensive; a three-hundred-piece wooden puzzle cost between $1.50 and $4.50, a steep price, given the prevailing wage of twenty-five cents per hour. To save money, many puzzlers used that era’s equivalent of Netflix, local libraries that rented puzzles for five cents per day or twenty-five cents per week. Puzzle exchanges and puzzle clubs also allowed people to find new puzzle at a low cost.” Source: Adult Puzzling and Hard Times

As the effects of the great depression dragged on, one company got creative. Creativity during challenging times is ingrained in our culture. And what they did was quite clever.

“the Lambert Pharmacal Company of St. Louis decided to try stimulating sales by offering a free cardboard jigsaw puzzle to each buyer of its Pro-Phy-Lac-Tic toothbrushes. The firm simultaneously raised the toothbrush price by 16 percent, from twenty-five cents to twenty-nine cents. Amazingly, its sales quadrupled. Since the puzzles cost only about one cent to produce, profits soared.” Source: Adult Puzzling and Hard Times

Yes, you read that right. Puzzles drove toothbrush sales. Now you can imagine what happened when other companies saw this- they followed suit. Soon you could get puzzles with many things you bought!

“A February 1933 article reported an estimate that the industry was producing ten million puzzles each week, of which about 30 percent were sold and 70 percent given away for free (Advertising Age 1933). Given that there were only thirty million households in the United States at the time, jigsaw puzzles were entertaining a large fraction of the population.” Source: Adult Puzzling and Hard Times

Now let’s fast forward to COVID. Puzzles were a safe alternative for entertainment while we all stayed home. And did we ever puzzle with that time at home! Artifact puzzles was kind enough to share more information to help show what happened during the pandemic.

The more I talked with Anne, the more I came to understand that puzzles are both a mainstream hobby and a comfort hobby. During COVID, puzzles were an alternative to Netflix and chill. And one that is better for your mental health than just disconnecting.

“Studies have shown that jigsaw puzzles can help improve visual-spatial reasoning, short-term memory, and problem-solving skills as well as combat cognitive decline, which can reduce risk of developing dementia. There are also mental health benefits to puzzling.” Source: Fortune.com- The life-changing magic of puzzling: Why solving jigsaw puzzles is good for your mind and body

Now, with our first pieces of the puzzle on the board, let’s shift our focus and talk about the artisan puzzle industry. We will leave big puzzle out of the conversation right now, but they will come up a bit more in part 2.

The two areas we want to focus on are the artisan wooden puzzle market, and the artisan cardboard puzzle market.

Artisan wood puzzles

Earlier we discussed how many manufacturers started giving away cardboard puzzles during the depression. You might have assumed that the wood puzzle industry disappeared. It didn’t. It is alive and well today, and is an absolute art form.

I interviewed Terra Rodgers of Chestnut and Hemlock to learn more about the wood puzzle industry.

Here is an example of what I am referring to with wood puzzles- they range from small artwork you can hold in your hand to much larger pieces. In many cases they may also be hand painted, though not always.

I asked Terra to share more about her business: “I make ¼ inch thick wood puzzles. The pieces themselves are like a work of art. Some people make grid cut wooden puzzles. The best way to think about wood puzzles is as a combination artwork and puzzle. Even the individual pieces are like artwork due to the intricacy of how they are made. For the consumer, wood puzzle prices will typically range from $1 per piece upwards of $7 per piece. Wood puzzles are not something we typically make large inventory for. While we may make some in advance for events- we normally make the puzzle once it is ordered.”

The new tariffs instituted are not the first disruption this industry has seen has in the last few years.

Terra shared: “We’ve experienced a number of challenges since the start of the pandemic. First, our supplies were disrupted as the worldwide supply chain ground to a halt. Next, in 2022 we experienced our second disruption. Baltic Birch is popular to use for wood puzzles. Baltic birch is now considered conflict timber since Russia invaded Ukraine.”

What exactly is conflict timber?

Where is most commercial Baltic birch grown?

“Russia has the largest reserves of birch forests and, consequently, birch logs globally. The reserves are in the so-called “birch belt” stretching from the Ural to the Baltic Sea region, including Finland. Some birch forests exist also in Belarus and Ukraine, but the plywood supply from these countries can also be limited, at least for the time being.” Source: Can the European markets survive without Russian Birch Plywood?

US sanctions on Russia introduced a 50% tariff on Baltic birch. I asked Terra how she approached this challenge.

“I didn’t want to use conflict timber, so I started looking for alternative sources and alternatives types of wood that I could use for the puzzles. We cannot just use any wood- it has to be high quality without a lot of imperfections. First, we looked for alternative countries to source Baltic birch. This led us to source from Estonia, Lithuania, and Finland. I’ve also looked at potentially using Italian Poplar for puzzles. It’s a little softer wood and easy for me to work with.”

It’s clear to see that the proposed tariffs would become the third major disruption for the wood puzzle industry. I asked Terra how this might affect her business:

“You know, it’s difficult. Many companies tried to stock up on supplies in advance where they could. But as a small company we can only buy a limited amount in advance. It affects the wood we use for making puzzles. It also affects our packaging as we line our boxes with fabric. There’s more of an impact than you might realize. And it’s not easy for us to source all these products here.”

Missed Opportunities

Like any good business owner, once you have been in business a few years you see gaps in the market. These gaps give you new ideas of products that you can create to meet a market need. An owner who is willing to invest in their business can often continue to expand. Terra is one of these owners, but now she is stuck.

“I’ve been doing research for a little while on expanding into the cardboard puzzle market. I was really excited about this, as I believe I found an interesting niche. I’ve looked around to try to find puzzle equipment here in the United States. Unfortunately, I can’t really find any that would work for me. There aren’t any puzzle equipment manufacturers left in the US.

I need to buy a new machine, and those are made in China. With the escalating tariffs with China, it is too expensive to buy the machines to get a payback in a reasonable time. I can’t afford a 145% increase in the cost of the machine with the tariffs. This expansion of my business is now on hold.”

Where does this leave us?

In the last few weeks, I’ve learned so much about the global supply chain for the puzzle industry. There are many complexities and intricacies to this market. It’s an ingrained part of our popular culture. Popular before the pandemic, it experienced tremendous industry growth during the pandemic. Even with the existence of big puzzle, many puzzle making companies are small businesses. And the whiplash of tariffs is causing much uncertainty for both consumers and their businesses.

In part two of this article, we add more pieces to complete our industry puzzle. In that article, I share first hand the impact on two cardboard puzzle companies.

You can read that article here: Sorting out a puzzling problem- Part 2