Toy Association Highlights for 2021 and 2022 Outlook – by Steve Pasierb

Toy Association Logo Toy of the Year 2022 Board Summer STEAM Toy List

2021’s Relentless Focus

The Toy Association pushed back on threats to your companies through advocacy in major cities, state capitols, throughout Washington, DC, and in dozens of capitols around the world. Our blend of pro-business, pro-safety, pro-child activism stopped misguided new regulations or legislation that did not add to product safety, while our fight against trade barriers and unwise policies helped further protect the business of toys.

Across the United States

We were faced with and advocated on several hundred state bills in 2021. While no new legislation specific to children’s products ultimately passed, there was a handful of broad consumer product bills that became law. New consumer privacy laws in Virginia and Colorado and packaging laws in Maine and Oregon will affect our companies in 2022, and we will be working to provide compliance resources for all members moving forward.We formed an Extended Producer Responsibility (EPR) Working Group of volunteers from member companies focused on developing principles for recycling and materials management to guide the toy industry in increasing sustainability and navigating the emerging patchwork of state packaging regulations.Our External Affairs team acted on chemical regulation bills in ten states which would have an impact on toys AND children’s products, securing critical amendments to measures in California and Nevada and defeating a proposal in Oregon to expand the existing reporting program. The Toy Association continued working on regulatory issues in New York State and after exhausting every other avenue, moved forward filing a lawsuit to litigate regulatory conflicts in Oregon.

Congress and Federal AgenciesThe shipping crisis delivered the most harmful blow to member companies through undue delays and exorbitant unjustified charges. The External Affairs team continually prompted the U.S. government to act in response. Our advocacy voice extended to every congressional office while we worked with many offices in support of the Ocean Shipping Reform Act of 2021 as a first step toward addressing delays, increased costs, and container shortages. We are active in a broad coalition of retail industries pushing for legislative and regulatory action. The Association team delivered dozens of monthly media appearances to advance our messaging about shopping early for toys and explained the combined business and consumer impacts of the crisis while we held member webinars with port leaders to provide insight and advice.Our progress on Intellectual Property Protection remains a top priority with the Federal Affairs team working alongside congressional offices driving support of the SHOP SAFE Act and INFORM Consumers Act.  The Toy Association remains in discussions with key committee staff providing recommendations as they work to bring the bill to the House floor for a vote.  One highlight of these efforts was when our board member Aaron Muderick testified on counterfeits before the U.S. Senate Committee on Judiciary in November. Lastly, we advocated and made frequent national media appearances educating consumers about the risks of purchasing counterfeit toys, so much so that even U.S. Public Interest Research Group (PIRG) took notice of our positive influence and invited us to join their annual press conference.We took our dedication to safety education to Capitol Hill and congressional hearings, effectively detailing toy industry leadership in product safety by advocating for similar battery standards in other consumer products that model the existing, effective ASTM F963 governing toys.  We further advocated against changes in long-standing and protective CPSC interpretations of age grade for flocked and plush toys in meetings with commissioners.Maintaining a positive and productive dialogue with the Environmental Protection Agency (EPA) secured an exemption for articles in the EPA Risk Evaluation Fees Rule, and we secured an extension to March 2024 for the effective date of EPA’s ban on PIP(3:1).Numerous congressional hearings on children’s online privacy were held though no significant legislation passed. The Federal Trade Commission announced in December that it will issue orders to nine social media and video streaming companies, requiring data on how they collect, use, and present personal information; their advertising and user engagement practices; and how practices affect children and teens. We will keep members updated on this FTC action.Global Advocacy and New International Affairs Committee2021 saw the implementation of The Toy Association’s international membership level, with each company having a seat on the International Affairs Committee while the work is staffed and supported by the External Affairs team. Regular meetings were held to keep members apprised of developments, seek direct input, and align staff priorities with member needs. India market access, Brazil conformity assessment, and various proposals across EU member states have been among the dozens of issues already before the committee.The Toy Association led an international, multi-stakeholder effort to defeat the ISO proposal for a standard on marketing to children which would have layered redundant requirements on top of existing effective regulatory structures the industry observes.We successfully convinced several foreign markets to accept the ASTM F963 standard, including Jamaica and Colombia. This success will reduce trade barriers and testing costs for member companies wishing to sell into these markets.In Saudi Arabia and GCC countries, we continued to advocate for a smoother conformity assessment process. The Association has made significant progress aligning regulator, lab, and industry expectations regarding process, which has eased market access for our members.

Meetings & Events: When the going got tough, the tough got going!Despite not hosting a live event in 2021, our team accomplished much, served many, and was able to continue pivoting staff skills to provide opportunity to members and the industry at large. Highlights include:Toy Fair New York and Toy Fair Dallas 2021 postponed?! “Downtime” allowed us to forge deeper partnerships with Mojo Nation and with Brands Untapped (focusing on inventors, designers, creators, and licensors), the expansion of our relationship with Solving for Tech, (implications of the Metaverse), as well as the addition of Carlos Mendoza, art director at Spirit Halloween, to the Creative Factor Advisory Board, as we continue strengthening Toy Fair’s future position with the artist and illustrator community.Map Your Show (MYS) became an even more important partner by acting as an app provider for Toy Fair Mobile. This enables us to manage the app more independently while its module is robust with many features. This was the first full year we utilized an API (application programming interface) allowing MYS and Compusystems (our registration partner) to speak with each other electronically.After holding three successful market weeks in 2020, Toy Fair Everywhere opened as a year-round platform in February. We provided a way for sellers to quickly reach buyers on a global scale and within the convenience of an online destination. With a strong marketing effort, Toy Fair Everywhere continues to look for innovative ways to connect manufacturers with buyers all year round. We welcomed amazing sellers such as Djeco, eeBoo, Fat Brain Toys, Good Banana, Insect Lore, Learning Resources, and Pink Poppy to name a few. The first “pavilion” operator joined — French Toy Company — highlighting 13 French companies.The Toy Association continues to host Retailer Private Previews. With pandemic-related travel restrictions still in place, we pressed forward helping connect sellers with powerful retailers such as ALDI, Amazon, Claire’s, Family Dollar, Indigo, Office Depot, QXH, Target, Toys “R” Us, and Urban Outfitters.Vital to the future of both the show and the industry, we began intensive work with mdg (a marketing solutions strategic partner) focused on the “Reimagination of Toy Fair” project. This work provided opportunity to conduct a detailed brand audit of Toy Fair, its audiences, purposes, and future potential. Results will begin to appear in our 2023 event and build further in following years, keeping Toy Fair vital, useful, and impactful for all who attend.

Membership Stayed Strong During the StormIn another tumultuous year of contrasts, during which some member companies saw fantastic sales growth while others continued to suffer, and all were hit by shipping and cost problems, The Toy Association ended 2021 with 856 member companies. 82 new members joined including licensor Moonbug Entertainment and direct-to-consumer toy manufacturer Lovevery.Delivering member value meant providing tools to help navigate the global shipping crisis, including an online resource center with direct access to webinars on port updates from LA Port Executive Director Gene Seroka, news, and advocacy efforts surrounding this issue.With international concerns increasing as members expand market reach around the globe, the Membership and External Affairs teams rolled out the international membership category to address the needs of companies doing substantial business outside of North America. Since introduction in the second quarter of 2021, 30 companies have joined. These members receive direct guidance on global issues facing their companies as well as participation in the International Affairs Committee.Twenty-one webinars were held with 2,350 participants. A range of timely subjects included insights and guidance regarding the shipping crisis; Amazon’s new toy safety requirements; China eCommerce opportunities; building diversity & inclusion in the toy industry; toy and consumer trends research; IP rights at US Borders; and more. Net promoter surveys to measure member satisfaction averaged a score of +50 which is considered excellent (on a scale of -100 to +100).  Sustaining the content, we launched a new on-demand content portal in the fourth quarter. More than 40 member companies have already used the portal to access content they missed.Delivering actionable research and interpretation continues to drive member satisfaction. New trend and market data made available to members included: NPD’s Global Toy Market Report – Annual 2020; the 2021 Toy Industry Financial Operating & Benchmark Study; the American Kid Consumer 2020/2021, presented by Kidz Global; The Toy Association’s new STEAM Toy Assessment Framework; monthly TrendHunter reports on retail innovation, conservation economy, what’s new in gaming, diversity & inclusivity, packaging innovation, and educational experiences; and Economic Impact of the Toy Industry member update 2021.

Commitment to the Canadian Toy AssociationThe Toy Association continued its sustaining partnership with the Canadian Toy Association (CTA). This relationship is beneficial to both nations and allows us to combine advocacy expertise to protect member companies. Entering the holiday season, through the annual Toys of the North program, Canadian manufacturers donated $185,000 worth of product to nearly 4,000 children in need in the most remote parts of Canada.Another highlight occurred in conjunction with the CTA Annual General Meeting when a special panel of experts from Toys “R” Us Canada, The NPD Group Canada, and Indigo Kids discussed the “State of the Industry,” including lessons from doing business during the pandemic, how to reopen and rebuild, and what the future will hold. The event attracted an impressive 323 attendees and positive reviews.

Spreading the Word and the Love of PlayThe communications team strengthened safety messaging with the first-ever “Toy Safety Awareness Month” in November; appeared in TV and radio segments to warn shoppers of the dangers posed by counterfeit toys and how to avoid them, reaching millions of viewers and listeners. Toy Association staff was invited to speak at PIRG’s “Trouble in Toyland” press conference for the first time ever, providing a new platform to get our messaging out about safety and counterfeit toys. Media coverage for the annual NGO “dangerous toy” reports continued to decline, proving that our proactive year-round communications have degraded their credibility overall. As a result of these efforts, traffic to grew 169% compared to the same time in 2020.The Genius of Play launched the Once Upon a Playtime podcast series with well-known guests while its acclaimed PSA campaigns generated over $31 million in donated media time and space for the year. The Genius of Play also won a Telly Award for the “Worldwide Headquarters of Play” campaign. In total, The Genius of Play program generated 3 million engagements on social media and visits to surpassed 1 million.As a result of several years of work by The Toy Association team and many partners, the industry’s first STEAM Accreditation Program was launched to provide toy companies with the opportunity to have their educational products accredited as official “STEAM” toys by the Good Play Guide. Accredited products get the special “STEAM Stamp of Approval” to display on packaging and in promotions.The Toy Association’s position as a trusted voice on play also creates the opportunity to promote member products in the media. In 2021, 76 unique companies and 118 products were featured on TV and 81 unique companies, and 117 unique products were featured in press articles. The Association continued to act as a thought leader in the toy & youth entertainment trend space, offering the industry both full-year and mid-year trend forecasts in a virtual format, viewed on YouTube.

An Association Healthy for the FutureToy Association staff and the Board of Directors collaborated over both 2020 and 2021 to maintain services at a high level.  This meant managing staff furloughs in the first half of the year, not filling staff vacancies throughout the year in all departments, and closely controlling all spending. Along with cancelled trade shows and conferences and the negative impacts of sunk costs in planning these events, there were also positives through partial insurance recoveries, utilizing employee retention credits, and through staff-driven new revenue sources including providing satellite media tours to highlight member products, opening Toy News Tuesday with advertising space, and the continued success and growth of Toy Fair Everywhere and curated Retailer Private Previews. Your Association remains healthy and viable thanks to two years of these constant adjustments, painful sacrifices, and investment portfolio performance. These drove a 2020 surplus that offset a significant 2021 operating deficit resulting in two-year net increase in reserves (net assets) of approximately $2 million. With a cautious eye to the future, 2022 can only be viewed as a recovery year not a budgetary return to usual. We acknowledge risk from the pandemic remains ever present to many of our offerings.

Delivering Joy to Children in NeedThe 501(c)3 nonprofit Toy Foundation welcomed Pamela Mastrota as Executive Director, continuing the positive impact of interim director Ellen Lambert. The Foundation’s trustees and new Strategic Planning Committee are creating a scalable plan for the future that includes enhancing current programs to directly help more children while it also amplifies the broader toy industry’s lasting commitment to children in need with the goal of acting as a beacon of philanthropy. The toy community is uncommonly generous and charitable which is a message the Foundation intends to deliver far and wide.The pandemic affected the health and well-being of millions of children resulting in a rise in emergency room visits and hospitalizations for mental, emotional, and behavioral health conditions. In support of children’s hospitals throughout the country, especially those serving disadvantaged communities, the Foundation is addressing this crisis through partnership with the Children’s Hospital Association in creating, The Toy Foundation Play Grants Program.” In 2021, nearly $375,000 in play grants have been distributed across 18 member hospitals. The Foundation also provided nearly $300,000 in pandemic grant funding to organizations including Playworks, Save the Children, Arts Ed Newark, The Strong Museum, First Book, and ThinkGive. Diversity, Equity and Inclusion (DEI) Charter/Committee was established whose guiding principles are representative of all the communities the industry serves; impacts all sectors of our industry and seeks to instill a toy industry culture of inclusion and equity by being of service and opening doors for all communities of our customers. Most recently, The Toy Foundation funded the Black Inventors Hall of Fame and the Geena Davis Institute on Gender in Media as it builds the DEI initiative.Toy donations were a challenge in 2021. As toy manufacturers struggled to get products into the U.S. and onto shelves, many children’s charities felt the effects of the disruptions. Fortunately, with little product available, The Toy Foundation was still able to provide $3 million in toys to almost 150,000 children in need in 2021, thanks to the generosity of our industry community.As always, but especially in these disruptive times, thank you for your engagement and support over the past year.  We are member focused and member driven across our many committees.  We count on this for 2022 and will continually work to keep your trust.  It remains both an honor to serve businesses like yours and the wonderful people of the toy and play community. We want to help!  Please reach out to me or any of our team members if we can support you in any way, intervene in an issue your company is facing, or find a place for your people to have a voice on one of our committees.  In the meantime, all good wishes for health and prosperity in the new year ahead.