Photo: Jazwares, LLC
July 6, 2023
Squishmallows: Warren Buffett’s New Favorite Toy
Warren Buffett, the legendary investor, has a new favorite toy: Squishmallows. The plush, squishy toys have become a global phenomenon, and Buffett’s recent investment in their parent company, Jazwares, is accelerating their growth with over 100 million units sold in the last year.
Squishmallows are already a major force in the toy market. In 2022, they generated over $1 billion in sales. And with Buffett’s backing, they are likely to only grow in popularity. This could pose a challenge to other toymakers, who will need to find ways to compete with Squishmallows’ unique appeal.
In addition to their popularity with children, Squishmallows have also found a following among adults. This is due in part to their comfort and collectability, often being compared to Beanie Babies. Endorsements from celebrities like Kim Kardashian and Lady Gaga on platforms such as TikTok have propelled the brand’s popularity.
Squishmallows recently announced a global partnership with McDonald’s Happy Meal, set to be launched in 70 countries over the course of 2023. Some of the characters will include a QR code for a music playlist that matches the character’s personality, in partnership with Universal Music Group.
The toy maker won the Best Licensed Toy Brand at the Licensing International Awards in Las Vegas in June 2023.
At VidCon, Squishmallow installed an interactive “squish pit” for fans to jump into, resembling a gymnastics foam pit filled with the plush toys. This event has earned them millions of free impressions online with nearly 700 million views on TikTok, most of which is user-generated content posted by fans.
“We don’t do traditional marketing. We are where our fans are,” said CEO Judd Zebensky.
With the backing of Warren Buffet and Berkshire-Hathaway, Squishmallows are likely to become even more popular in the years to come. Toymakers will need to find ways to compete with Squishmallows’ unique appeal and fan-based marketing approach.
Discussion Questions
What can other brands learn from Squishmallow’s marketing strategy?
Poll
Loading …BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Doug Garnett
President, Protonik
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
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In a time when everything seems to be about tech and digital and AI, ya gotta love something as old fashioned as Squishmallows.
I would take care and not try to learn too much. Squishmallows are following the path of a fad. The newly invested money needs to be dedicate toward finding a way to not also die off quickly – and to prepare for a future where sales decrease. They have a unique opportunity but it’s also a one of a kind opportunity.
Exactly, Doug. I doubt Squishies had anything to do with BH’s acquisition of the parent, Alleghany Corporation. Buffet is not into fleeting investments.
The lesson is that when lighting strikes, seize the day and maybe, just maybe, there will be a pot of Buffett Gold at the end of your rainbow. Great market awareness, great marketing, great timing – congratulations Jazwares!
On the surface, this is a surprise investment by Buffet. Berkshire-Hathaway’s investments are usually in more substantial and long-term companies. Like Beanie Babies and their ilk, Quishies will be gone in a few years.
The reality is that BH didn’t buy a toy company. They bought the parent, Alleghany Corporation, which itself owns multiple re-insurance corporations internationally.
As far as Squishmallow’s marketing strategy goes. It is probably more of a phenomenon rather than a strategy. The company is more focused on licensing name properties than self-development.
Warren Buffet? How about every kid and most adults who pick one up? Squishmallows are addicting.
And since Squishmallows are being compared to Beanie Babies, I hope that they devour the Beanie Baby story and don’t make the same mistakes. Beanie Babies imploded.
Is the Beanie Baby story one of the mistakes or is it just a reality of fads?
There was so much going on surrounding the sale of Beanie Babies and people harassing retailers and delivery drivers. Ty Warner stopped making Beanie Babies when they were still popular, ending with a Beanie Baby called “The End”. Not a great move. Ironically, they are still being sold.
Not to be a buzzkill, but – particularly with ‘rec’ing no longer a part of RW – I’ll have to second those who point out this seems to be a classic fad, and not to try learning too much, if anything, from it. And speaking of buzzkills: “Endorsements from celebrities like Kim Kardashian” … those half dozen words certainly tempered my affection for them.