Business

Real Concerns or Just Hot Air?

No well-curated Pinterest board or Instagram feed can live without helium-filled balloons. Graduation festivities, birthdays or weddings – all of life’s joyous moments can be turned into social media gold by adding floating pastel-colored globes or shiny metallic numbers and letters dangling from delicate strings. But for balloons to glide elegantly above our heads, they need to be filled with gas, helium to be specific, making them lighter than the air around them. It’s this natural gas that has been increasingly challenging to procure for party suppliers around the country.

“Helium shortage and environmental concerns lead balloon industry to look for solutions.”

Starting in 1996, the U.S. government began to sell its helium reserves, a goal which the Helium Privatization Act of 1996 hoped to achieve in 2015. This would lead the U.S. into a new era as an importer rather than producer of the natural gas, according to a 2010 executive report by the National Academies of Sciences, Engineering and Medicine, located in Washington, D.C.

The reliance of U.S. companies on imported helium from countries such as Qatar has made them vulnerable to geopolitical issues, such as the 2017 trade blockade imposed on the Gulf nation by its powerful neighbor, Saudi Arabia, said Sam Komar, vice president of sales at CTI Industries, a balloon manufacturer and supplier in Lake Barrington, Ill. “That affected the helium marketplace because Qatar was the second-largest supplier,” Komar said. Additionally, CTI’s customers are facing increasing competition over helium from the scientific sector. Scientists and hospitals use liquid helium to cool the magnets used for magnetic resonance imaging or MRI. “That an industry that’s willing to pay a lot of money for liquid helium,” Komar added.

Changes in the supply and price of helium are not a new challenge for the industry however. “This isn’t the first time we’ve faced these challenges, and we’re prepared to help our customers through this shortage,” said Mary Adams, senior marketing manager at Anagram International, another balloon manufacturer and supplier located in Eden Prairie, Minn., which claims a 60 percent share of the global market for metallic balloons. Adams said her company has responded to this continuing challenge by investing in the development of helium-efficient products, like their lines of Helium Savers and XtraLife balloons, which are designed to use less of the noble gas and retain it for a longer time.

Other companies, like Bogart, Ga.-based burton + BURTON have focused on educating their customers about the helium-saving practices. “For those affected, we are concentrating on helium best practices, such as turning off the helium tank after each use,” said Kacie Carswell, marketing manager at burton + BURTON. “Next, we are recommending saving helium for the core revenue-generating balloons.”

Air-filled balloons are becoming increasingly popular, Komar of CTI Industries noted, and companies such as burton + BURTON and industry heavyweight Pioneer Balloon Company, of Wichita, Kan., are guiding their customers toward air-filled options in light of recurring helium shortages. “When helium prices soared in 2012, we were quick to educate our customers about all of the possibilities air-filled designs provide,” said Dan Flynn, Pioneer Balloon Company’s chief operating officer. “In the end, many balloon artists never went back to using helium because they had higher profit margins with air-filled designs.”

Air-filled balloons provide another benefit to the industry: they don’t run the risk of disrupting power lines when released. Helium-filled balloons that are released into the atmosphere have been a major point of contention between the industry and states like California, whose power grid relies heavily on overland power lines, Komar explained. “If a bird ran into [a power line], it would be an issue.” California has made several efforts to educate residents about the dangers of released balloons and even attempted to ban metallic/foil balloons altogether.

In response to concerns about balloons’ potential to disrupt power supplies and complaints by environmental groups about the deadly effect of discarded balloons on wildlife, the industry formed a lobbying group, The Balloon Council, located in Trenton, N.J, and increased education efforts. “Educating consumers continues to be important,” Anagram’s Mary Adams said. “Every foil balloon Anagram makes can be reused and refilled. And an air-filled balloon is just as much fun – and sometimes easier to work with – than helium-filled products.”

However, air-filled balloons often require a balloon cup or stick to remain in the desired location, items which also are facing increased scrutiny by consumers and legislators. “The most difficult challenge is the combination of a shortage of helium paired with single-use plastic initiatives around the world,” Pioneer’s Dan Flynn explained. “In years past, a balloon cup and stick, made of plastic, would be a quick and easy solution to a lack of helium in some situations. Now our customers will have to be more innovative when creating deliveries that would have required helium.”

Heightened consumer sensibilities regarding the environmental impact of balloons and other plastic products have lead companies to increase their focus on educating their consumer-facing clients and researching biodegradable materials. “We have received more inquiries about the biodegradability of our balloons,” Flynn said, before pointing out that latex, an already popular material for air-filled balloons, is biodegradable.

Adams said Anagram, the world’s largest producer of non-biodegradable metallic balloons, has also made efforts to reduce its environmental footprint. “As a manufacturer, our processes reuse supplies like pallets and recycle material like corrugate, and our facilities utilize energy-efficient lighting,” Adams said. “We take our social and environmental impact as a business seriously and have adopted a philosophy of recycle, reuse and rethink to lessen the carbon footprint of our processes and products.”

Despite its challenges, the balloon industry is thriving. “In recent years, the demand for balloons has greatly increased,” burton + BURTON’s Kacie Carswell said. Franchises like Disney’s Frozen have greatly contributed to the industry’s growing success. The two publicly traded U.S. companies in the industry, Anagram and CTI Industries, both reported revenue increases in the balloon sector. Even as CTI experienced a loss in revenue in 2017, the company’s largest product lines – foil and latex balloons – grew by $3.8 million, according to the company’s annual report. “Social media catapulted the fascination with balloons to an even greater level,” Carswell added. “No longer just a balloon on a string, balloons are a must-have in event décor.”