Infant Industry: The Battle of the Brands
Boon and Munchkin fight it out in the Target baby aisle.
by Greg Allen
March 20, 2007
Munchkin's first Great Idea was baby bottles with Dr. Pepper labels on
them. (This makes me think that lofty mission statement was polished up off-site.) The idea
came to Dunn when he put a nipple on his Diet Coke bottle and fed his infant
daughter
her formula. (Coca Cola wouldn't agree to the license.) First
full-year sales: reportedly $15 million.
The company wanted to get away from licensing, start developing its
own products, and by 1999, original designs constituted 95% of the company's $24
million revenue. "We don't have the luxury of coming out with me-too
products, because we don't have the name that some of the other
(companies) have," Dunn told the Los Angeles Daily News.
But
it wouldn't take long. By "innovation," she meant "licensing Viacom cartoon characters on everything."In 2002,
Munchkin expanded by buying out a waning product line from Johnson &
Johnson. As for the names other companies have, they went for that,
too, licensing Blues Clues and Dora from Nickelodeon. It was the same year they
reported $5.5 million EBIT on $36 million revenue (which, even if you factor in
the Forbes Privately Held BS
Discount Rate of 25%, is to be commended). As a former Wal-Mart buyer
said in the article, "The only thing that drives sales is innovation,
and that's what they do best." And by "innovation," she meant,
"Innovation. And distribution, like having Wal-Mart, Target, and
K-mart as your three biggest accounts. Oh, and licensing Viacom
cartoon characters on everything."
Since 2005, Munchkin has had either six
years of double-digit growth, or nine years of 20%+ growth, either of which is impressive.
In 2006, they reached $73 million in revenue, which is apparently when
companies feel they have the luxury of producing successful me-too products. Thus, the turtle. (I confess, I
haven't asked the new Juvenile Product Manufacturers Association Chairman Andrew Keimach about such knock-offs, but
only because I figure he's too busy at his day job, EVP, Sales for
Munchkin.)
So, is Munchkin a hard-fought parent company success story, or
did they cross the rubicon into corporate hegemony when they came out with this me-too product? Would they be as palatable
as Boon if they were simply less successful? What's the acceptable price premium
for the indie,
innovative product?
$12? 80%? (Or, in the Like-A-Bike case, 560%?) Is big-box distribution a sign
of success for Boon, but a sign of selling out for Munchkin? Or is the problem
the licensing juggernauts of Dora, et al?
Will everything
change again when Boon's EVP takes over the JPMA?
©2007 Greg Allen and Nerve Media
About the Author |
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Greg Allen's films have screened at MoMA's Documentary Fortnight, and at the DoubleTake, Berlinale, and Palm Springs film festivals. Greg began publishing Daddy Types, the weblog for new dads in early 2004, right before his daughter was born. He lives in New York City and Washington, DC. |
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Boon and Munchkin fight it out in the Target baby aisle.
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