Extreme Makeover

As the toy industry continues to revamp itself in response to recent recalls and production glitches, the construction toy category, too, is reshaping its focus, and finding ways to address such critical issues as rising oil prices, eco-friendly awareness and the implementation of safer materials. Whether they specialize in wooded blocks or plastic building pieces, manufacturers are donning their hard hats, rolling up their sleeves and working on product development plans that will lay a new foundation for the construction toy market.

Perhaps nothing has had more impact on the construction toy category as of late than Mega Brands' massive recall of 2.4 million Magnetix Magnetic Building Sets. At least 1,500 incidents of magnets separating from the building systems' pieces were reported last spring, prompting a joint recall with the U.S. Consumer Products Safety Commission.

One year later, the recall still plagues the construction toy market. Italian-based Plastwood, makers of the magnetic Supermag system, was particularly impacted. According to president Edoardo Tusacciu, the company saw a notable sales decrease in the U.S. market because “some buyers tended to generalize and think of products within the same category as being the same in their design and safety.”

Nevertheless, Tusacciu stands by Plastwood's strict adherence to safety measures and emphasis on quality over price. “We are aware of the danger children are exposed to if they ingest more than one magnet,” he tells Playthings. “We totally agree with the new ASTM standard as well as the new European standard requiring the manufacturer of potentially dangerous magnet toys to place warnings on the packaging.”

In response to the recall, Plastwood has since updated its packaging to add a special warning to consumers, along with a revision to its age recommendation, raising it to ages 6 and up.

Yet as a result of the controversy surrounding the magnetic toys genre, some companies actually benefited from the situation. Deer Park, N.Y.-based Edushape experienced significant sales gains within its toy specialty division last year. “We suspect [recalls helped] consumers rediscovered their local toy store, which gave them more personalized service,” says Judith Culberson, national sales manager.

K'nex also saw a sizable increase in shelf space for its products, and has opted not to use magnets in its building toys throughout 2009. “Ultimately, consumers will decide if they want to continue to purchase construction toys with magnets in them, and retailers need to make their own risk assessment on whether they should carry them,” says Michael Araten, president of the Hatfield, Pa.-based company.

If there's one trend that's practically a no-brainer for retailers to embrace, it's the demand for product that's good for the environment, and that's created a phenomenon that has both manufacturers and retailers jumping on the bandwagon with eco-friendly construction toys.

“Consumer priorities are shifting,” says Malcolm Bisiker, president of Toronto, Ontario-based Zabazoo. “The public has become more aware that plastics and paints can contain harmful substances. Retailers are now searching for safe and domestic goods, and this is beginning to affect manufacturers' product development.” In response to this phenomenon, the Canadian company makes its Stonees building blocks out of crushed stone that is rebounded and sealed. No dyes or paints are used in the blocks; their color comes from the rocks' natural pigment.

Kapla USA also taps into the notion of eco-conscious consumers with its line of wooden building blocks. Fashioned from marine pine that comes from renewable forests in the Bordeaux region of France, these blocks are precut in France and then shipped to Tangiers for tinting (using water-based paints) and packaging. “Kids are very aware of saving the planet and saving resources,” says Marjorie Israel Chayette, general partner for the Savannah, Ga.-based company. “These are very valuable lessons and issues not to be missed in the toy industry—or any industry.”

For K'nex, the company prides itself on eliminating all waste from its production process. “We recycle enough plastic to make almost 1 million full K'nex sets,” says Araten, adding that the company recycles enough water each year to fill the equivalent of eight Olympic-sized swimming pools. “A product that lasts many years helps parents with their finances, keeps kids happy and keep toys from landing in landfills.”

Along with the popular green movement, licensed building toys, particularly in the mass market, are also making headlines at retail. Major players like Lego and K'nex are expanding their product portfolios by developing themed building toys in the likenesses of hot properties, pleasing everyone from preschoolers to fans of big-budget movies.

Next month, K'nex will launch its Sesame Street-branded construction toys for ages 2 to 5. The collection varies in price point, from $10.99 to $31.99, and features core characters in themed sets, such as Elmo's World, Super Grover and Abby Cadabby.

Araten is personally thrilled to bring the line to market not only because of Sesame Workshop's reputation, but also for Sesame Street's broad fan base. “It is the only powerful license that appeals almost exactly 50-50 to boys and girls,” he tells Playthings. “For retailers, that means that each product does the work of two because it can serve every child.”

While some toy makers have found success through licensing phenomenon, others are more focused on product that will be known for its play value instead of for bearing the logo of the property du jour. “Licensing makes the product lose some of its features,” Plastwood's Tusacciu believes. “Nowadays some customers/buyers only search for licensed products, regardless of the value of the toy itself.”

Kapla's Chayette doesn't believe licensing is cause for concern. “I don't think that licensing will eliminate other construction toys,” she tells Playthings. “Block play has been around for centuries and provides an activity that can't be replaced by gifts in cereal boxes.

“Blocks are in a particular category that remains 'educational,'” Chayette adds. “That may be a kind of license in itself.”

If anything, as long as those companies active in the licensing sphere focus on licensing appropriately and staying true to their brands, according to Bisiker, “[this trend] should bring more attention to the category overall ... this can be good for everyone involved.”

With over 25,000 SKUs of construction toys in its inventory, Top Ten Toys in Seattle pays particular attention to this product category. Owner Allen Rickert notes the challenges associated with managing such a sizable roster. “Many of the classic construction toys are made by large manufacturers that cater to the mass market first, so the fulfillment of orders placed even well in advance is erratic,” he tells Playthings, noting the negative impact this can have on sales.

Nevertheless, the category remains steady in this specialty toy shop, prompting Rickert to keep on top of trends and eye-catching products. This year, he is most excited about PlayMais, a building block made from 100-percent biodegradable cornstarch. “Our staff has already played with it, and had a great deal of fun,” he says. Plans to promote the product via an in-store playdate are underway “since it will be an unfamiliar medium for our customers.”

In addition to toy stores, interactive museums across the country are helping to sustain an interest in construction toys. At Discovery Place in Charlotte, N.C., a children's science museum that boasts a nature center, IMAX theatre and extensive gift shop, approximately 10 percent of inventory is devoted to construction toys, which often correlate with the various temporary as well as permanent exhibits.

According to retail sales manager Monica Berry, the museum's store experienced an increase in sales in construction toys, thanks in part to a temporary exhibit utilizing environmentally friendly wood blocks from Kapla. Opened in January, the display features six designs of mass proportions, including a large Leaning Tower of Pisa. “We have seen great responses from children and adults alike, especially since it is a hands-on exhibit,” she says.

Over at the Walker Art Center in Minneapolis, the gift shop varies its selection of construction toys each season; currently, its offerings include Q-Ba-Maze, Dado cubes, Pixel Blocks and Blik Bloks.

To boost interest in the construction toys category, the museum worked with Q-Ba-Maze on a Giant Fish sculpture incorporating its blocks. Product was displayed on a front table—adjusted to platform height—for maximum exposure, and was highlighted during an interactive event on Walker's First Free Saturday for Families in March. “We brainstormed on different ideas, and this just turned out to be the best way, offering the most space for the display,” says Nancy Gross, director of merchandising.