Toy market news

The supply chain crisis reignites reshoring efforts

Toys have always been a global business, but the policies and climate of the ‘70s and ‘80s managed to push the bulk of manufacturing and packaging - with exceptions like Slinky, Wiffle Ball, and Lincoln Logs - out of the U.S. Decades later, the COVID-19 pandemic exposed the true weaknesses of the supply chain and how inflation, labor issues, rising costs for raw materials, and reliance on global shipping cartels could wipe out the financial upside of international production. When paired with recent concerns regarding tariffs and intellectual property (IP) theft, reshoring and nearshoring efforts are top-of-mind with manufacturers.

While a recent study from the Reshoring Institute revealed that nearly 70% of American consumers would prefer to buy - and pay more for - products labeled “Made in USA,” the industry faces several roadblocks to domestic production. Opening a new factory in the U.S. requires major upfront capital investment, machines and tooling sourced from overseas, and environmental considerations. Once built, a new facility must be operated by a workforce that, for the most part, no longer exists due to a labor shortage in the U.S.

As the toy industry knows well, with challenge comes opportunity.

toybook.com