Opinion - Letter from America

Sustainable toys - a conundrum…

After 20 years working at A.C. Nielsen/D&B Research Company, Rick opened the first Learning Express Toys franchise in the Chicago area in 1996, and then became a sub-franchiser, opening nine more stores. Although leaving the corporate environment behind, he has combined his expertise in data and numbers with a passion for the toy retail space. This month, Rick confesses that he finds selling green or sustainable toys a real conundrum.

Below, I set out my problems concerning green toys, and hope that I can solve them. But first, let’s start with a round up of some simple highlights of 2021 and quick forecast for Q1 2022.

At Learning Express, we have achieved record sales driven by above average foot traffic and our highest ever average ticket prices. Due to the key drivers of fidget toys and Squishmallows, margins also went up, and we ended the year with inventory levels in line with pre-covid years.

For Q1 2022, we expect to see January and February sales beating 2021 inflated levels, followed by a slowing as we enter the spring and start to compare against previous record levels. Overall, Q1 will be considered strong but with a late Easter (April 17th), there will be some slowing in growth.

According to Allied Market Research, which I contacted for this article, the worldwide green or sustainable toys market was valued at $18,939.1m in 2020, and is estimated to reach $59,643.9m by 2030, registering a compound annual growth rate (CAGR) of 12.5% from 2021 to 2030. Their research definition is as follows:

“A sustainable toy is recyclable and ecofriendly in nature, that is manufactured using biodegradable materials such as cotton, wool, water-based inks and paints, wood, soy inks and bamboo. Sustainable toys have tight quality control procedures, remain transparent about their process, and use only quality recycled materials to ensure their toys are safe for little ones. Toxic chemicals, metals, glue, and conventional paints are strictly prohibited to be used in green toys. Manufactures must replace plastic with recycled material.”

The sustainable toys market is growing at considerable CAGR, owing to an increase in public consciousness regarding environmental impact and climate changes, an increase in the adoption of organic and sustainable materials and the effects of the pandemic, according to Vinay Gandhi, global strategic partner at Allied Market Research.

Learning Express Toys has tried to sell different ‘green’ products over the last 5-10 years, as well as testing different merchandising sets in store, and while sales are OK, they simply have not matched the rate we see with other competitive (mostly non-green) items. This frustrates me because when we ask our customer base, or undertake a survey, everyone votes for and says they will purchase green toys. At point of sale, however, they usually opt for a lesser priced item.

But we are not giving up; I believe in the cause and feel we must all do more to make our products sustainable, as well as deal with all the packaging that comes with product deliveries. There is so much waste with boxes packed in boxes (sometimes several layers) that ultimately gets trashed. Last year as we experienced our greatest sales year, but our worst year of product-related waste. It’s sad, so I am now working with a small entrepreneurial group (an incubator programme of students at our local High School) to explore and look at ways to reduce packaging in shipping. We aim to find packing materials that are biodegradable and flexible yet strong, so that packaging may be reduced and more easily recycled than traditional cardboard. Wish us luck.

I am hopeful that, working with the major players operating in this market (which include Lego, Hasbro, Goliath Games and Clementoni), we will be able to find the right balance of business profitability and common-sense regarding our planet. To me, the toy industry can lead the way, and show customers it’s not just about price, but rather a more sustainable future.

Richard can be reached on LinkedIn or by email at LE45@sbcglobal.net.