Toy soldiers, craft dolls, miniature kitchens and alphabet blocks. Wooden toys have existed in the market for nearly 3,000 years, having made their debut in Germany sometime in the 1700s.

Despite the rapid growth of electronic toys, video games and licensed products in the modern retail landscape, these seemingly simple classics continue to captivate preschoolers and parents alike with their nostalgic charm and proven durability. But is there an opportunity brewing for more toycos to take up the hammer and chisel and elevate this category to new heights?

New York’s Creative Kids certainly thinks so. Since opening its doors in 1998, the toyco has focused on manufacturing arts & crafts products for kids of all ages, ranging from easels and crayon sets, to modeling clay and sticker kits. And in 2019, the company made its first move into the wooden toy market.

“We got into wooden toys based on a customer request, and very quickly, we started learning the ropes of what the category looks like,” says CMO Daniel DeLapa. “We realized early on that there aren’t a lot of name brands in the wood toy market other than one or two key players, which was our opportunity to come in and disrupt the market.”

Since the release of its first wooden toy products three years ago, Creative Kids’ range in the category has expanded to feature CoComelon- and Blippi-branded chunky puzzles, Baby Shark stamp sets, spinning reading blocks and a roleplay workstation.

As the company began to build up market momentum, it needed a partner to help take its business in wooden toys to the next level, says DeLapa. Enter MGA Entertainment. Creative Kids inked a deal in August 2022 to bring the LA-based company’s Little Tikes preschool toy brand into the category, and launched a first line of wooden vehicles and alphabet blocks at retailers across North America in September.

“MGA had considered getting into wooden toys in the past, but it had never focused on the category at this scale,” says DeLapa. “Together, we felt there were huge disparities between the prices that market leaders were demanding and what was in the customer’s pocket. We’re aiming to come in close to 40% under the retail prices offered by other competitors.”

Under the partnership, Creative Kids designs and manufactures the toys, and Little Tikes manages distribution. Together, they plan to roll out more than 15 SKUs of Little Tikes wooden toys in the UK and Ireland this spring, and plans for more launches across Europe are currently being mapped out.

Meanwhile, Creative Kids is expanding its Little Tikes range with more interactive products, including giraffe-shaped music tables, gear puzzles, roleplay kitchen sets and Montessori-inspired activity boards.

“Parents are constantly looking for products that educate and entertain their kids,” says DeLapa. “All the toys that we’re producing are targeted at the preschool market and focus on key early-learning fundamentals like color sorting, bilateral coordination and shape identification.”

He adds that the recipe for success in the wooden toy market isn’t pushing new features or gimmicks into products, but keeping them as simple and as affordable as possible.

“This is a global toy market worth over US$20 billion,” DeLapa says. “Our biggest challenge in the category is determining how to deliver a high-quality product at a price that parents at every socio-economic level can afford. And the way we’re doing that is by controlling our expenses far more aggressively than our competitors.”

Creative Kids inked a deal last year to bring MGA Entertainment’s Little Tikes preschool brand into the wooden toy category

A 2022 report published by India’s Maximize Market Research forecasts that the global wooden toy market will grow in value from US$23 billion in 2021 to more than US$28 billion by 2027. Nearly 75% of this business is generated in North America and Europe, but MMR predicts that the APAC region will soon start to emerge as an important market as the demand from millennial parents there for more educational and construction toys increases.

There’s also another key factor that’s helping to propel the category’s growth. “I think a good portion of what’s driving the wooden toy market today is parents focusing on sustainability,” says Thomas Kaeppeler, president of Ravensburger North America. “They’re now looking for new alternatives because most plastic toys are oil-based—so when they end up in landfills, they never break down—whereas wood is inherently a sustainable resource.”

Based in Germany, Ravensburger entered the wooden toy category in 2015 when it acquired toyco BRIO from the Swedish investor group Proventus. Founded in Sweden in 1908, BRIO is a pioneer in wooden toys, having invented several historic classics that it continues to produce, including miniature railways, pull-along Dachshunds and stacking clowns.

“Before acquiring BRIO, we had been watching the company’s progress in North America and Europe for a long period of time, but I was questioning whether wooden toys were still a play concept that intrigues kids,” explains Kaeppler. “After visiting several independent and specialty toy stores around Europe, what blew me away was how many kids and parents would approach the BRIO display table. It was easily the most frequented fixture that day, and kids would jump right into pretend play.”

While American toycos such as Mattel and Hasbro have only recently begun to look for ways to eliminate plastics from their manufacturing processes and reduce emissions and waste, European toycos have been adopting sustainability policies and practices since as early as 2010, says Kaeppeler. For nearly 10 years, all of the wood used in BRIO’s toys have come from renewable forests grown and harvested in the Balkan region of Sweden. But cost is still a major challenge.

“We wanted to ensure that our footprint is significantly lighter on the environment than other companies,” says Kaeppeler. “But any product that is sustainably managed has the new challenge of rising manufacturing costs. The cost of both wood and plastics have jumped significantly since the pandemic.”

According to a 2021 report by Canadian consulting firm Capgemini, social and environmental issues are increasingly affecting purchase decisions. Of more than 7,000 consumers surveyed, 79% said environmental impact would sway them not to buy a product, and 52% feel an emotional connection to products and companies that are sustainable.

Another challenge for Ravensburger is continuously innovating the product line and coming up with new ways for kids to immerse themselves in pretend play.

“There’s only so much you can execute from a technical perspective with wood,” says Kaeppeler. “If you want to elevate the play pattern, you have to look at ways to integrate technology safely, source the right materials, and stay sustainable—all while combining that into a toy.”

With this design philosophy in mind, BRIO has added two new trains to its iconic BRIO Builder wooden railroad system. The first is a battery-operated steam train that kids can fill with water. As the locomotive speeds down the track, its stack produces cool water vapor that looks like steam but is safe to touch. The second newish SKU is a Smart Engine that launched in 2019. When this train passes through one of its Action Tunnels, it lights up, emits sound effects or changes direction.

More broadly, Kaeppeler remains optimistic about the growth prospects of the preschool toy industry. “Like most markets around the world, birth rates have been declining for years. But [thanks to the pandemic], for the first time in a long time, we’re having more babies, which is healthy for the toy industry at large. Down the road, they’ll need toys, and we’ll be here as they grow up.”

This story originally appeared in Kidscreen‘s May/June 2023 magazine.

Check in tomorrow for a look at how the toy world at large is moving in a more sustainable direction.