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Strategies September 9, 2008, 5:01PM EST

Ammo Goes Upscale

(page 2 of 2)

ATK appeals to younger hunters with dramatic packaging and advertising

Outselling Century-Old Rivals

Laggards just a few years ago, the ATK brands together now outsell all other commercial ammo brands, besting Winchester and Remington. "They are great marketers," says Gary Buescher, vice-president for hunting and firearms at outdoor retail chain Gander Mountain (GMTN), which has kiosks at some of its 113 stores showing loops of Federal ammo being used to take down wildebeests in Africa and other animals. ATK also has in-store charts to show how much weight its bullets retain upon impact (the less it breaks apart, the more deadly it is).

ATK's biggest source of demand remains the military. Production of .50-caliber rounds has increased twelvefold since the U.S. invaded Iraq in early 2003. Often fitted with explosive-tipped bullets, the rounds are usually fed into heavy machine guns mounted on Humvees. One .50-caliber shot can pierce an armored vehicle and blow it up. "The guys in Iraq just love them," says a former U.S. Marine who works at Lake City.

As for the election, ATK Chief Executive Daniel Murphy claims he's "not at all concerned" with a party shift—though he expects a "change of priorities." Along with hawking upscale bullets to hunters, ATK has rolled out accessories including rifle scopes, clothing, and gun bags to help offset any decline in military sales.

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Shooting Gallery

When Field & Stream's David E. Petzal wrote about ammo shortages last fall in The Gun Nut blog, his readers jumped in. Some blamed the "militarization of law enforcement." Others cited China's demand for raw materials like lead. "There's a war on," wrote one. "If I have to shoot a little less to support the troops, so be it."

To read Petzal's blog, go to http://bx.businessweek.com/defense-industry.

Hindo is BusinessWeek's Corporate Strategies editor in New York .

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