BUYING A SMALL BUSINESS

Green Toys

As parents begin to consider the sustainability and health impact of what their baby plays with, this niche industry is outperforming its own parent industry.

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For six decades, the Spielwarenmesse International Toy Fair, the world's largest trade fair for toys and games, has demonstrated the innovation and imagination behind childhood fun. Its 62nd show, held in February 2011, showcased the newest, burgeoning sub-sector of the toy industry: sustainability.

Spielwarenmesse's environmental focus highlights the emergent potential of the green toy industry. Green toys currently represent only a sliver of the $21.87 billion toy industry and are defined loosely and at the manufacturer's discretion as "environmentally friendly." But the NPD Group, a leading market research company, and estimates that green toys retail is outperforming its parent industry by 150 percent.

Green Toys Inc., a producer of toys made entirely out of recycled materials and entirely in the United States, has seen an 80 percent growth in sales each year since it began in a California garage in 2007. Its simple products, such as the Green Toys Tea Set and the Green Toys Dump Truck, top Amazon's list of bestsellers in eco-friendly and green toys. President and co-founder Robert von Geoben believes his company's stratospheric success reflects the possibilities of the industry as a whole and the changing mentality of parents as consumers.

"Parents are starting to look at toys like they look at food," he says. "It used to be this plastic thing and you didn't question what's in it. Now green has gone mainstream, they want to know what is in their toys, and our company has grown like gangbusters." Toys Go Green, an empirical study of German consumers in November 2010, also reported that "in the last 12 months, more than 80 percent of consumers bought sustainable toys and are intending to do so in the future as well."

Small, innovative companies currently dominate the relatively young industry, but as major toy companies begin exploring green products consolidation becomes more of a reality. But, von Geoben believes there is plenty of room for new, authentically green companies to enter.

"A green product company is really a material technology company as much as it is a brand," he says. "Consumers are very smart and you have to give them a whole complete green package or they'll reject it. Never underestimate how much consumers care."

By the Numbers:

$21.87B U.S. retail sales of toys generated in 2010
2 Percentage increase in total U.S. toy market from 2009 to 2010
150% Estimated rate green toys sales are outperforming total toy sales, according to the NPD Group
80 Average percent growth in sales for Green Toys Inc. per year since 2007
Last updated: Apr 11, 2011




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