Disney Goes Upscale

Discussion
Jun 29, 2007

By Tom Ryan

Walt Disney Co. is branching out into furniture, linens and even wine as part of an effort to sell more upscale products.

Wine and cheese platters are being launched at Costco based on Disney’s new animated film Ratatouille, a tale of a rat who wants to become a French chef. A chardonnay, from the Burgundy region in France and bearing the Ratatouille name and likeness, will sell for $12.99. The Ratatouille program also includes bedding, cookware and tableware for kids and adults sold at Sur La Table. Carrefour will carry Ratatouille-branded water, tomato sauces, milk, cheese and yogurt.

“Given that so much of the movie is set in a kitchen, it’s fairly logical to go from there to a high-end collection,” Disney Consumer Products chairman Andy Mooney told Reuters.

But non-character – or Disney logo – merchandise appears to be a bigger upscale opportunity.

Disney began its upscale push by giving clothing designers access to its archives for inspiration. The result, the Disney Vintage casual couture line, eventually helped drive mass apparel sales.

Lines of jewelry and home furnishings – including high thread-count linens, silverware and china – as well as wedding gowns and furniture inspired by founder Walt Disney’s life and era followed. This fall, lighting products from Minka Group will debut. Next year, bath and bedding from Dan River and outdoor tabletops from Zak Designs will launch.

No Disney characters appear in many of the luxe products, although designers often draw on color schemes, background art or themes from Disney animated movies.

Upscale positioning marks a switch for a brand known for sweatshirts, stuffed animals and touristy collectibles.

“We very much want to move upscale because we think moving upscale is good for the brand,” said Mr. Mooney. “It’s turned out to be better than we anticipated for the business.”

Michael Stone, chief executive of the Beanstalk Group, said Disney is wise to reach both ends of the price spectrum.

“It’s a multi-channel strategy,” Mr. Stone told Reuters. “Disney is not abandoning the mass market, as a matter of fact, they are mining it, not with a shovel, with earth movers.”

“Disney is a fascinating brand for core consumers. It has tremendous pull and value,” said Michael Silverstein, a senior partner with The Boston Consulting Group. “It is not a luxury by old definitions. It is not for aristocrats only. But it is a brand that the upper- and upper-middle income consume at a high rate.”

Discussion Questions: What do you think of the potential for Disney in more upscale products? What are some challenges for Disney in building an upscale presence? How do you think it will affect its mass business?

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7 Comments on "Disney Goes Upscale"


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Bernice Hurst
Guest
14 years 10 months ago

Sue me if you will but it strikes me that people who buy Disney buy it because they love it not because they care about the quality of the product or any perception of being upscale.

I know people – a full family of adults – who have flown to the US just to go on a Disney cruise. This was not an inexpensive vacation. If something said Disney on it, they had no cares at all about cost – what they wanted was a brand. Possibly the Disney $12.99 wine will be a good one, I have no idea, but I don’t suppose those who buy it will either know or care.

Michael L. Howatt
Guest
Michael L. Howatt
14 years 10 months ago

One thing I know from my niece who worked at Disney – they pay close attention to quality and detail. Just because they may slap a rat’s face on a product doesn’t mean it’s cheaply made. The have enough money and a reputation to uphold so I’m sure their products will be of high standard – even if they are a little cheesy (get it!).

Mark Lilien
Guest
14 years 10 months ago

There are two different worlds in the licensing business. One emphasizes the showbiz tie-in (a Disney tee shirt with a cartoon character). The other emphasizes design quality, with no showbiz tie-in. Martha Stewart and Ralph Lauren have sheets, towels, bedspreads, etc. that emphasize design quality. Their enduring popularity isn’t based on logos.

If Disney can achieve major market share based upon design quality, its licensing profits will take a quantum leap. The #1 obstacle: the manufacturers have to make a profit, too. If the Disney licenses are too expensive, the manufacturers will have a hard time staying solvent. Since licenses are usually sold to the highest bidder, the winner of the auction can easily be the loser who pays too much.

Joel Warady
Guest
Joel Warady
14 years 10 months ago

Let’s be honest. While I am not a wine expert, I’m not sure that a $12.99 bottle of wine is really considered upscale. Who will purchase wine from Disney? The same people who choose to get married at a wedding ceremony held in Disney World. Disney may think they are targeting upscale buyers, but in reality they are targeting the Wal-Mart crowd, and providing them with a brand that they know, and a step up from what they might have purchased in the past.

Sounds a bit snobby, I know. But Disney is not, and will not be, considered an upscale experience. It is a fun, entertaining, and well-run company. It should focus on what it knows best, entertaining the masses. It should not try and be something that it is not.

Susan Rider
Guest
Susan Rider
14 years 10 months ago

This will be a challenge for Disney. They have built a brand targeting youth or the young at heart. Upscale adults searching for a Disney motif?!?! This will certainly be a challenge. No doubt the products will be good quality but getting the attention of the buyer will be the challenge.

Although, targeting the upscale consumer with disposable income to spend on their spoiled children might be a good plan!

Ryan Mathews
Guest
14 years 10 months ago

Obviously, whoever asked this question hasn’t checked out the price of high-end Disney collectibles. The company has plenty of experience selling high-end goods.

The question really should be, “How far can they extend their brand franchise?”

I don’t know about you, but to me nothing says family friendly better than a case of Merlot. Disney is continuously experimenting on the frontiers of their brand (Gay Day at Disney theme parks for example). And, it’s the nature of experiments that many fail and some succeed beyond even the scientist’s wildest expectations.

Time will tell but I’m willing to bet that there is a significant built-in market of Disneyheads out there that will buy almost anything that has the brand attached to it — and that Disney knows this better than anyone.

Christina Botteri
Guest
Christina Botteri
14 years 10 months ago
No matter how you slice it, Disney is a brand juggernaut. While I’m not really a Disneyhead, I did work there there for a number of years and it’s true, they do pay a great deal of attention to detail. I’m glad to see a pivot away from the straight-up logo items. I think bringing the fantastical (plus extremely deep and competent) designs from their productions into the ‘real world’ is a brilliant move that will certainly appeal to the Disney kids that are all grown up (read: they still want Disney in their homes, but perhaps more subtly than a Goofy face on the wall clock). My own opinion is that Disney should launch a higher-end campaign to bring the Magic Kingdom into your own castle (home). Let’s see Fantasia topiary for inside and out; how about Alice in Wonderland’s Mad Hatter Dining Room Table and Chairs (or tea set); or Beauty and the Beast’s stained glass ballroom window; or a complete Andy’s Room bedroom set from Toy Story… None of these items are… Read more »
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