An image of Warren Buffett at Berkshire Hathaway shopping day, May 5, 2023.
Yun Li | CNBC
Clever commercial legend warren buffet has a whimsical side, buying from companies whose products he personally enjoys like Dairy Queen and See’s Candies. Now count the Squishmallows plush toy phenomenon.
Squishmallows made his Berkshire Hathaway annualthe start of the meeting this year in Omaha, Nebraska, with shareholders purchasing 10,000 cuddly dolls in a matter of hours, including ones inspired by “The Oracle of Omaha” and his longtime business partner, Charlie Munger. Berkshire inherited Jazwares, the parent of Squishmallows, through its acquisition of Alleghany in the fourth quarter 2022.
Jazwares founder and CEO Judd Zebersky and chairman Laura Zebersky now report and are in regular communication with Greg Abel, Berkshire’s vice president for non-insurance operations and Buffett’s successor. The South Florida-based couple, who are lawyers turned toy entrepreneurs, said they were delighted to be under the Berkshire umbrella and appreciated the autonomy needed to run their own business.
“It’s an amazing structure. We’re thrilled to be a part of it,” Laura Zebersky said in an interview. “It’s better than we could have imagined and being surrounded by the greatest leaders in the world is phenomenal, and being able to explore synergies is also something that interests us.”
Buffett, 92 years old sang the praises of Abel recently, saying he has taken on most of the responsibility. Abel oversaw much of the sprawling Berkshire empire, including energy, railways and retail.
While Buffett only got into Jazwares indirectly through Alleghany, he has shown a willingness to invest in much smaller companies that lack the clout to move the needle in terms of revenue and massive revenue. of Berkshire. Buffett often admires the company’s management and expects it to continue to grow and remain profitable.
A whopping 100 million Squishmallow units – with prices ranging from $5 to $30 – were sold last year alone. Laura Zebersky said the pandemic has spurred the growth of Squishmallows. Celebrity endorsements from Kim Kardashian to Lady Gaga on TikTok also helped.
“The idea of having something nurturing, comfortable, cuddly, it was affordable and accessible. Instant gratification,” Zebersky said. “We really touch on all walks and all areas. So it’s been really interesting to see that it’s not just kids but also adults. Our demographics are very broad and broad and it’s very unusual in our business to have that.”
In April 2020, Jazwares acquired toymaker Kellytoy, which created the Squishmallow brand in 2017.
Not a flash in the pan
In order to maintain Squishmallows’ success, Jazwares is aware of oversaturation and tends to be very selective when it comes to partnerships, Zebersky said. The plush toy brand has generated 40% of Jazwares total revenue over the past two years.
“We’re in the sixth year of the brand…it’s not a flash in the pan,” Zebersky said. “It’s growing smartly and sustainably. We make sure to limit the amount of production. We make sure there’s something different for every retail channel, that there’s a collectability, that there are unique styles, unique sizes.”
Squishmallows recently announced a partnership with McDonald’s Happy Meal, which will take place in 70 different countries throughout 2023.
Last month, Jazwares attended VidCon in California, an annual convention for content creators and online brands. The company featured a pit filled with a sea of Squishmallows that visitors could jump into.
“We don’t do traditional marketing. We’re where our fans are. And a great example of that is VidCon, the biggest gathering of influencers,” Zebersky said.
Squishmallows is one of Jazwares wholly owned intellectual properties, but the company also sells products with licensing partnerships with disney and Pokemon, etc.
