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Mattel is more than a toymaker, according to Ynon Kreiz. Mattel has a range of brands to choose from, such as American Girl, Barbie, Fisher-Price, Hot Wheels, Thomas & Friends, and UNO, Kreiz—the company’s chief executive since April 2018—says he’s leveraging Mattel’s intellectual property to grow revenue from film, television, digital gamingOther media types, similar to a comic book series with its world of super heroes.
“We look at Marvel as a very good analogy,” says Kreiz. “That is directionally what we believe we can achieve in terms of the strength, appeal and built-in fan base of our franchises.”
And who’s working overtime to help Kreiz with these goals? Barbie. Barbie, a freakishly tall doll with long legs.RdFilming will begin in spring for Greta Gerwig’s movie, which she was born on March 31st project, starring Margot RobbieRyan Gosling plays Ken, and as lead character. It is the company’s first-ever live-action film.
Mattel has also partnered up with Netflix in order to provide a unique experience. Masters of the UniverseMovie that will begin shooting in the summer. These two films join 12 others in development, and Mattel has more than 30 television shows in production.
Barbie also scored at this year’s Super Bowl, co-starring with Anna Kendrick in an ad for Rocket Mortgage that took top honors in USA Today’s Ad Meter poll.
Even as the toymaker’s top-selling doll does the heavy lifting, Kreiz and the rest of Mattel’s 33,000 employees are no slouches. It was awarded a license by Mattel to manufacture dolls and toys inspired by the original. FrozenAlso, Disney Princess Franchises in 2016 after it was lost to Hasbro.
Mattel was restructured under Kreiz. It saw a reduction in its workforce of more than three-quarters, consolidation or closure of factories, as well as a decrease in the number and quality of products it produces by 35%. The three-and-a-half-year effort reduced Mattel’s annual costs by $1.1 billion. Over roughly the same period, the company’s earnings (before interest, taxes and depreciation) rose eight-fold.
All the focus on media notwithstanding, toys remain the core of Kreiz’s long term plan. Indeed, the industry is projected to be a $100 billion business by 2023, and it’s expected to grow through 2025 at more than 5% annually, according to market research group EuroMonitor.
“It’s a resilient industry, a strategic category for retailers,” Kreiz says. “But the opportunity for us is to extend beyond the toy industry into other categories that are actually larger.”
Kreiz spoke with TIME about Mattel’s turnaround, what the pandemic did for the toy business, and why toy prices might increase for years to come.
This interview was edited and condensed for clarity.
After a major turnaround, Mattel has entered growth mode. Is it harder to make that change during a pandemic or was it easier?
We had an extraordinary quarter. In terms of growing market share, we also managed to surpass the industry for the second year in a row. The turnaround was complete in almost every market. This was very much a broad based success in that we’ve achieved [growth] in six of the seven categories where we operate in each of our power brands—Barbie, Hot Wheels, Fisher-Price, and American Girl—and ended the year as the number one toy company in the fourth quarter, globally. It wasn’t just one brand or one region or one category. It was universal.
Was the pandemic a factor in those numbers? Did it create a headwind or was there a positive impact? Was it a headwind?
Although the pandemic caused some consumer demand for toys it created challenges within the supply chain. There were many challenges in the supply chain, including factory closings and some retail closures. Both inflation and factory closures were challenges.
What’s your outlook on the economy in general? Do you feel like we’re pulling out of pandemic mode now? In a recent earnings conference, your chief financial officer stated that there are some inflation problems and they should be resolved by 2023.
That’s right. We do expect inflation to moderate in ’23. We expect it also to start moderating in the second half of ’22. Over time we do expect—as we all see around us—the pandemic to become part of our lives. It might be difficult to accept, but it is something we can learn to deal with. It is possible to learn how to deal with it, and to find productive ways of dealing with it. This is an example of what we have achieved in two years during the height of the pandemic.
You also won the licenses to the Disney Princesses and another big win. Frozen franchises. How did you do it?
This was an enormous win for Mattel. It came down to trust. This really showed the Walt Disney Company Mattel was a preferred partner that can develop and manage new franchises. We are the world leader in dolls and have the experience. It’s the same team that is managing Barbie so successfully that will manage Disney Princess and Frozen.
Mattel’s audience today might look different than a decade ago. How can Mattel do this?
Well, [our Super Bowl ad]According to The, it was the most popular Super Bowl commercial. USA Today ranking. It was an outstanding achievement. In today’s world, where there’s so much exposure, and children really learn how to engage and consume. You’re dealing with the most sophisticated target audience out there. You must be authentic in everything you do. It’s a combination of social media, online video, short-form video, and continue to innovate in ways that are not traditional. It is important to have a clear purpose for your brand and cultural relevance in order to reach consumers.
Could you please elaborate?
Physical play is great but there must be more to why you purchase our product. Parents, caregivers and children need to know this. The benefit is that our products offer another advantage to customers who interact with them. They need it to engage, entertain or develop children through play.
For example, which would serve the greatest purpose: Barbie or Hot Wheels cars?
Barbie’s purpose is to inspire the limitless potential in every girl. Hot Wheels’ purpose is to ignite and nurture the spirit that lives in every kid. American Girl is a program that helps girls develop confidence and strong character. Monster High celebrates inclusion and diversity. It also promotes belonging, representation and belonging. Our goal is to create a brand purpose consumers can identify with.
Can you talk about the importance of media products—movies, television, video games—in helping to sell toys?
So, there’s no question that having multiple touchpoints and engaging consumers through different forms of media increases the emotional connection that fans have with our product. But it’s important to say that when it comes to all of these additional verticals—film, television, live events, consumer products, and digital experiences—the way we see these is as an opportunity to grow our business and expand beyond the toy aisles, as opposed to think of them as a marketing strategy. It is our journey to be an IP-driven and high-performing employee company.
What is the secret to this?
We’re not saying, “Please make movies and television or episodic content so we can sell more toys.” It’s about, “Make great content that people want to watch.” We know, of course, that in success we will also sell more toys. It’s not that we’re not looking to sell more toys. We are focusing on building and growing business verticals. The journey begins as a toy business. We have a solid foundation. The emotional and engagement levels of toys are high. You touch it, you hug it, you go to bed with it, and it’s a source of inspiration and aspiration.
Do you feel the role of CEO has changed in the workplace and the public? Is it likely to change?
Absolutely. Mattel is the fourth company I’ve managed and I do see how the role of a CEO, of a corporate leader, has evolved. The fundamentals remain the same. It’s about running a company successfully and doing the right thing by your stakeholders, by your shareholders, by all the relevant constituencies. This role is now expanded to corporate citizenship. A responsible business must have an objective that transcends its commercial objectives. We are aiming to make the world a better place, more equitable, more inclusive and sustainably. The company has a clear purpose. It aims to help the next generation discover the joy of childhood, and realize their potential.
Mattel is not the only one that has elements in this shifting role.
Trust is foundational for every company, but it’s particularly important for us, given our main consumers are children. Fisher-Price may establish a relationship with parents even before their child is born. Building trust is key to building and maintaining a relationship. Trust is essential to ensure that products are safe, quality and valuable. These are three characteristics we desire to be associated with our brand. And when you earn consumers’ trust, then you can pursue your business objectives.
Mattel committed to using 100% recycled or recyclable plastics by 2030. How does this initiative progress?
Just to be sure, the goal was to have 100% recycled or bio-based packaging materials by 2030. Another important goal is to decrease greenhouse gas emissions by half and eliminate manufacturing waste by 2030. These goals have been met with steady progress. There’s a new campaign, Barbie Loves the Ocean. It’s our first doll made from 99% ocean-bound plastics materials.
Are greener products such as these more costly? Is it more expensive to make them from sustainable materials?
These are definitely more expensive. It’s not that the capabilities are not there, but clearly you want to do it in a commercially viable way. The Matchbox Tesla Roadster was our first vehicle to be die cast from recycled material and is carbon neutral. It’s more costly than the regular model. We are beginning to explore. We’re starting to try different manufacturing systems and different materials. We recognize that the world is heading in this direction, and would love to be able to make it happen in our domain. We expect it will become commercially feasible with the help of more scientific research, and other resources.
Mattel PlayBack is also in existence. We invite you to return any Mattel toys to us so that we can reuse them and recover new Mattel toys.