Startups are embracing circular economy principles and taking on the big players by making safe, locally made toys from recycled straw, sawdust and plastic milk bottles
Connecticut photographer Jim Barber never fretted about where his kids’ toys came from until a 2009 news alert reported record lead levels in the toys of three of the nation’s major toy makers. As Barber joined other concerned parents in removing offending products from their collections, he was shocked to find out how many came from China. “Most had to be thrown away,” he recalls.
This very concern later inspired Barber’s business, Luke’s Toy Factory, a startup making eco-friendly, sustainable and safe toys from recycled, organic materials. Barber and his now adult son, Luke, who designs the toys, use an organic wood composite using sawdust, rice holes and wheat straw— waste materials outside the food stream, and combine this with plastic. “The toys then feel and act like wood—durable and attractive, and yet contain 40% less plastic than conventional toys,” Barber explains.
The company has full funding and is currently on Kickstarter.com, the crowd-funding platform to gain preorders for the first toy—a fire truck designed with five interlocking parts. Subsequent products such as dump trucks, flat beds and tanker trucks will connect with the first toy’s base frame, Barber says. Already orders are strong, in part because the price ($19.95 per truck) compares with mass produced toys, and everything is US made—an important component to their big picture business goal, Barber says. Domestic production ensures all aspects of creating the toys can be carefully monitored for safety. Eliminating shipping from China allows a shorter time to market and a leaner inventory.
In practice this means Luke’s Toy Factory is located in Danbury, Connecticut, with its factory is in Southington, Connecticut. All materials come from Michigan and Kansas and the tooling from a tool shop in Massachusetts. “We want to help keep jobs in the states and show other US-based entrepreneurs there is no reason why we can’t make our toys here,” Barber says.
A waste-to-toys effort
Luke’s Toy Factory is part of a larger waste-to-toys effort within the toy industry to make high quality, eco-friendly products from recyclable, organic materials, all domestically, within the states. The largest and first player in the US market, Green Toys Inc, makes toys from recycled plastic milk bottles devoid of BPA, PVC or phthalates.
President Robert von Goeben says the company started small in 2007, literally out of their San Francisco garage - it now exports to over 90 countries and sells in retailers including Whole Foods and Pottery Barn.
This year, Green Toys Inc entered South Korea, a huge market. What’s pushing sales, he says, is the growing trend of parents looking at toys as they do food. Consumers question the impact on their health and environment of many products, including toys. Quality toys of recyclable materials appeal to consumers’ memories of old-fashioned imaginative toys and a desire for kids to have a grounded childhood. “That’s our sweet spot,” he says.
Von Goeben sees his company's competition as more than just other companies using recycled plastic. “Most of the wooden toys companies like Melissa and Doug are our competition. We must make it as good as theirs and quantifiably green.” Like Barber, von Goeben views US-made as essential to their business model. He views US-made goods as the world’s highest quality goods and in toys, quality really matters. “Our customers trust us when they bring our products into their home. It’s a big responsibility we don’t take lightly.”
How big a business?
Experts wonder, however, whether the sustainable toy market will become as large as mass producers like Hasbro. Arie Y Lewin, director of the Center for International Business Education and Research at Duke University, says the likes of Luke’s Toy Factory will probably do well, but remain as a niche market. On his quarterly trips to China, Lewin sees extremely high-quality China-made products. So he doesn’t think the fact that his toys are US-made, alone, will win consumers over. Nor does he anticipate consumers will choose a toy because it’s made of sustainable materials. “If these sustainable toys do well, it’s because the products are interesting and good, that’s it,” he says. He adds that in order for localized and sustainable products to do well, companies must change their products frequently, keeping close tabs on which products consumers like.
Von Goeben adds domestic manufacturing is challenging and requires working with factory owners to help build up their capacity and confidence again after production was outsourced to Asia. And while he’d love to see more US-based companies duplicating Green Toys Inc, making toys with no metal axels, no glue, paint or screws - and from recycled plastic - is tricky and quite technical, he says.
Where Lewin feels optimistic for more ventures like Green Toys Inc and Luke’s Toy Factory is the organic grocery market, which began with Whole Foods Markets and now has spread to unlikely retailers such as Walmart. (This proves, in Lewin’s view, that the consumer demand is there for domestically and/or locally made goods from recyclable and organic materials. He thinks it can grow from a niche market into one embraced globally.) Additionally, US labor costs are becoming more competitive to low-cost countries such as China, and China’s growing middle class provides other opportunities for China-based factories. “All of this may cause more production to return to the US,” Lewin says.
He adds that if US consumers really take to locally made, eco-friendly toys, then the company may become a viable acquisition target. This already happened in 2010 when Wham-O Inc, a large Chinese toy maker, acquired Sprig Toys in Colorado, which used a wood plastic composite from Canada to manufacture electronic toys.
The toy business is risky, Barber notes, and big players typically profit only from the hits. For example, Hasbro’s Easy-Bake Oven has sold 30m products and still sells well after 50 years. He feels unique in that his model ignores that theory. All his trucks will work together, and that’s fun for the consumer. “Kids love this toy and if I can prove you can make quality and affordable products here versus China, that is success.”
Debbi McCullough is an independent writer, editor and owner of Hanging Rock Media, based in Cary, NC.
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