Properties perceived as trustworthy and safe by parents spread their golden glow to every product on which they appear. But as major licensors discovered this past summer, that halo can easily be tarnished. Licensed toys based on properties from Disney, HIT Entertainment, Nickelodeon and Sesame Workshop were subjected to massive recalls. And headlines like ‘The Little Engine that Could Poison’ underscored that the toys weren’t the only things tainted by excess levels of lead.
But a few licensors have been quick to take action and reassure parents that they’re invested in their kids’ safety. They’re going over-and-above inspection efforts from the Toy Industry Association and retailers like Toys ‘R’ Us to institute their own product testing programs.
In September, both Disney Consumer Products and Sesame Workshop announced plans to play watchdog and start looking over the shoulders of their toy licensees. ‘The first Fisher-Price recall really drove home to us that parents have a great deal of trust in our brand, and we have to honor it,’ says Myung Kang-Huneke, Sesame Workshop VP and general counsel. The problem being, however, that Sesame now finds itself in an unfamiliar role, overseeing a manufacturing process that is in no way similar to its core business of creating educational content for preschoolers – a position many licensors can likely identify with.
To help deal with its dearth of manufacturing knowledge, Sesame has turned to New York-based non-governmental org the International Center for Corporate Accountability to help shape a monitoring program that will ensure manufacturer testing has been reliably carried out to meet required health and safety standards. Once that system’s in place, Sesame will be working with a yet-to-be-appointed third-party lab to conduct random spot checks/tests of products once they’ve left licensee manufacturing facilities.
It’s early days yet, though. Kang-Huneke is hopeful that a working plan will be in place by the New Year, and then Sesame can start doing dry runs to determine what in the process works and what doesn’t, and where it needs to add staff and how much money it’s going to cost. But the org plans to move carefully before unveiling the completed program. ‘A lot of companies thought that they had a close-to-gold-standard program, and found out this summer that there were problems,’ she says. ‘I’m reluctant to say, ‘Oh, we’ve found the answer here.”
Because of the scope of its in-house product development and manufacturing operations, Disney Consumer Products hasn’t been quite as hesitant to dive right in since announcing testing plans in the fall. It’s a first for the IP giant to be sure, but DCP has already started conducting random tests of its licensed product with an eye to assessing overall product quality and safety, including compliance with US regulations regarding lead levels and choking hazards.
According to Robert Marick, VP and GM of Disney Toys North America, 65,000 Disney-licensed toys and kids products from 2,000 licensees have been earmarked for testing so far – although the goal is ‘to test as many as possible.’ DCP has hired more staff for its product integrity department to monitor and confirm that manufacturers are conducting safety tests by certified third-party testing labs.
Of course, such large-scale efforts won’t come cheap. DCP estimates that maintaining the program will cost ‘a few million’ dollars a year, and says it might try to pass those costs along to toymakers and licensees when it comes time to renegotiate or institute new contracts.
And that’s a whole other wrinkle. Not only does this new layer of checks and balances throw typical licensors into new territory, it also has them encroaching on traditional licensee turf, possibly ruffling feathers. However, both Sesame and Disney say that’s not been the case. Kang-Huneke notes that ‘licensees have been receptive and open because they understand the importance of child safety to our brand, and to them.’ For his part, Marick says Disney has communicated its plans in writing to all licensees involved and is starting to have direct conversations with its top-tier partners, who are on alert and willing to collaborate.