Creating Innovative Toys from Recycled Materials with Green Toys Inc.’s Robert von Goeben

October 29, 2014

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so excited to have with us today Robert Von Goeben. He’s the President and Chief Creative Officer of Green Toys. Welcome to Green is Good, Robert. ROBERT VON GOEBEN: Hey, John, how are you doing? JOHN SHEGERIAN: We are great today, and we thank you for coming on the show. Before we get talking about your great company, Green Toys — and for our listeners out there, they can find it at greentoys.com — we want you to share a little bit about your journey because you have a very special journey leading up to the founding of Green Toys, and I want you to share with our listeners your history and story leading up, and all the cool things you’ve done historically in your past. ROBERT VON GOEBEN: Yeah, you know, Green Toys is a combination of a long personal journey that I call the luckiest thing that ever happened to me. I’m a factory kid from upstate New York, a very small family, 900-square-foot house, six people in the house, and I landed in California after college in the mid-’80s, literally with $20 in my pocket. What my parents brought with me is a good Midwest German work ethic. The only thing I had going for me is I worked harder than anybody else. When I worked through the ’80s and ’90s in Los Angeles, I worked with a number of entertainment companies, including Geffen Records, I worked for David Geffen, MCA, Universal, in the creative side. What I learned was the creativity and the person that take the blank piece of paper and solves a problem starting from scratch is where the value in society is created. So, I’ve been through a number of careers. I started the online division at a major record company, David Geffen’s company. I was a venture capitalist in Silicon Valley through the dot-com era, which was an amazing adventure in and of itself. Got out, made a little bit of money, wanted to do something fun, stumbled into the toy industry because it was just something that was right for the times for me personally. I created the design firm in the early 2000s to be able to create electronic toys. Then something fantastic happened. My wife and I were having dinner, and we were talking about the toys we were creating and wanted to create, and she said to me, “You know, you should do toys that have a positive impact on the environment. Nobody does that.” Now we talk about eco toys and it’s a huge category. Green Toys has grown, and I’ll tell you in a second about how Green Toys has grown, but it was that one suggestion over dinner, and the light bulb hit. I said, “You know, you’re right.” The products that are on the market are wonderful products, a lot of them are very good for kids, but none of them really take into consideration the environment, both in how they’re manufactured and what happens to them after a kid grows out of them. So, it was from that little suggestion that I contacted my partner, Laurie Hyman, her and I went to USC Business School together 20 years ago. She has three little kids, and I said, “We have to do this, not just for ourselves, but this is something we could leave as our legacy.” JOHN SHEGERIAN: Wow. This is awesome. ROBERT VON GOEBEN: We started Green Toys literally in a Silicon Valley garage. I mean, you talk about Silicon Valley garages, we were one. JOHN SHEGERIAN: This is the great garage story. You are the garage story over and over again. This is awesome. ROBERT VON GOEBEN: Yeah. We are literally the garage story, and what we said early on, and this was probably the key to what we said, which is the way we’re going to make positive change in the world is through a commercial venture where we’re marrying products that people really want in their life wrapped around all the goodness of environmental sustainability and protection of natural resources. With the combination of those two things, it started us with toys that parents want. We’re going to make super high-quality basic toys, trucks, tea sets, blocks, things like that, and we’re going to make them in California from 100% recycled plastic. As it turns out now, fast-forward seven years, what we’ve done is we’ve created a company that makes kids’ toys from 100% recycled milk jugs. These are literally the milk jugs that people throw in their recycle bin. There’s a huge supply chain. We’re in that supply chain, and we grab that plastic, fresh, clean plastic, all food grade plastic, and we make our toys out of just recycled milk jugs. It started from the little garage startup. We now export U.S.-made toys to over 90 countries, and we sell to over 3,000 retailers here in the U.S., so it’s one of those things where it just grew exponentially. JOHN SHEGERIAN: Now this is a seven-year-old company. ROBERT VON GOEBEN: That’s correct, yes. JOHN SHEGERIAN: For our listeners out there, I’m on your site now. It’s a beautiful website, just so much information, so many cool toys. It’s www.greentoys.com. So, let’s evolve the story a little bit. So, you went from the garage, which I know you’re not in anymore. Where are you located? Where are you and your partner now? How do your offices look and your production look now, becoming a very big and scalable business? ROBERT VON GOEBEN: Now we’re located in Sausalito, California, which is just north of San Francisco, right over the Golden Gate Bridge. Again, any time I have a bad day, all I have to do is drive home, and I drive across the Golden Gate Bridge every single day. That’s important because the beauty of the San Francisco Bay area is the thing that continually drives us to say we’re doing something good for the environment. So, what’s happened over the last seven years is that we’ve had a large number of really good retailers from Pottery Barn, Barnes & Noble, Amazon, Costco, Cost Plus, that really embrace this brand and said, “This is the product we should be offering to our consumers.” From there, what’s happened now is we manufacture here in California. We have now started working with a second manufacturer here in California, and we now have a third manufacturer in Chicago to be able to service the East Coast of the United States, so we have three manufacturers up and running. We are now looking at millions and millions of toys. As a matter of fact, we just had a milestone, which is we crossed our 20 millionth milk jug that has been recycled in the making of Green Toys. 20 million milk jugs. JOHN SHEGERIAN: Let’s unpack that a little bit. What was happening to these milk jugs prior to you using them and putting them in new toys? ROBERT VON GOEBEN: Right. When you think about it, we all throw our stuff in the recycle bin and it just disappears someplace basically, right? So, there are five things that get recycled. There’s paper, aluminum, glass, water bottles, which is a very different kind of plastic called PET plastic, and milk jugs, which is high-density polyethylene, number 2 plastics. If you look on the bottom, it’s got the number 2. It’s one of the safest, cleanest plastics around, and what it was was this little gem that people were either making piping and garbage cans and things like that out of. The thing about it though is it’s notoriously hard to work with from a manufacturing standpoint. That’s where we brought Silicon Valley technology to bear, because you understand that this stuff is usually made into a milk jug, it isn’t made into a toy or some kind of hard injection molded plastic item. That’s what we bring to bear is technology and Silicon Valley technology, to be able to use recycled plastic, which is a real challenge because it doesn’t operate like regular plastic. That’s the thing that we were able to do, so it was used in many industrial applications, but it’s ideal for toys because it’s very clean, it comes from a food grade source, but most importantly, John, what it does is for parents and children, it closes the loop. You tell kids, “Recycle,” and they think, “Why do I recycle?” When you show them a product made from recycled milk jugs, you can say, “Here’s why you do it.” It just closes the loop in their education on recycling. JOHN SHEGERIAN: I gotcha. So, that was your secret sauce. You broke the code on the milk jugs, and that’s what you’re using as your feedstock to make these great toys. ROBERT VON GOEBEN: That’s exactly right. Breaks the code is the right word because there’s a very specific manufacturing process to be able to make a dump truck. One thing that’s interesting when you look at green toys products, you will notice there’s no paint, there’s no glue, there’s no screws, there’s no metal axle on the truck. Our products are 100% recycled plastic. When you’re done with it, you could throw it in the recycle bin, and it could be recycled again. JOHN SHEGERIAN: This is great. Talk a little bit about passing that threshold of the 20 millionth milk jug being recycled. How does that affect and continue to reinspire your employees, and how does that affect them? What’s the feedback you’re getting from your customers, Robert? ROBERT VON GOEBEN: Well, one thing to understand, and this goes back to the conversation about the way to make social change is you make a very viable commercial product. First and foremost, ours has to be really good toys, regardless of the message of the environment. For instance, we sell a big dump truck that is really sturdy and kids love. If that, sitting on its own, is not a good product, the rest of it is for naught. It just doesn’t matter. You have to have a good product. First and foremost, when people take our bath toys, our boats, our blocks, our trucks, and we have a line of vehicles, they say, “These are really great products.” Then when you tell them on top of it that it’s made in the United States and it’s made sustainably, they just freak out. So, it doesn’t matter what your message is. It’s like healthy food, right? Healthy food, it’s great when it’s good for you, but first and foremost it’s got to taste good. JOHN SHEGERIAN: For our listeners out there, we’ve got Robert Von Goeben with us today. He’s the President and Chief Creative Officer of Green Toys. To learn more about Green Toys or buy their great products, you go to www.greentoys.com. So now, Robert, now you just passed the 20 millionth milk jug recycled. What now? I mean, you grew this company. Literally, you opened this company in the face of a recession in 2007, the most difficult time to start a company. Now it’s 2014, and you’ve created this diamond of a company that’s doing work that people appreciate. What’s next? ROBERT VON GOEBEN: There are two things that are happening next. One is further expansion overseas, which is a possibility also of manufacturing overseas. People always say, “Would you manufacture in China?” We would consider manufacturing in China to sell to China. There is a strategy that we would take what we have in the United States, pick it up, and drop it in, say, Europe, where you would grab the recycled material that is available in Europe for the European market. It’s almost reversed globalization, if you will. JOHN SHEGERIAN: But it’s also very intuitive. It makes sense to replicate your paradigm that works so well here locally in those other countries. ROBERT VON GOEBEN: That’s right. When you think about not only the toy industry, but the traditional consumer products industry, you search the globe, you find the cheapest place to manufacture, you send all your raw material there, and then you ship it out all the way around the world. That’s just an old model. The idea is you go where it’s best to manufacture your product, where your raw materials are, get it really close, then what you do is you manufacture your product there, so there is a strategy. Second strategy for Green Toys is recycled milk jugs is one great raw ingredient for our products. I’m jumping on a plane in a week all across the Midwest of the United States. There is a variety of other materials that are being repurposed and reclaimed in sustainable ways out there, and what we’re doing is we’re staying at the edge of the curve, and looking at the real pioneers and the producers that are saying, “We have new materials from new sources of recycled products that you might able to now use in your toys.” So, very soon, in the next year to two years, what you’ll start to see is green toys that have recycled milk jugs, but have other recycled components in them as well, which allows us to offer a wider variety of products. JOHN SHEGERIAN: That is just so wonderful. You bring up a great point about how you would grow internationally, both in Europe and China, you’d follow the very successful paradigm you’ve created here in the United States. Talk a little bit about that supply chain. Talk a little bit about why it saves energy, reduces greenhouse gas emissions, and ensures better worker safety for the factory and the environment at large. That way, I want our listeners to understand you’ve created really a triple bottom line. Not only are you and your partner very successful entrepreneurs, or let me say eco-preneurs, which is always the key to sustainability. You’re making money, which means your company is going to be sustainable, but you’re creating a product that the consumers at large want and you’re doing something that’s also very gentle on the environment and also very gentle on the employees. ROBERT VON GOEBEN: That’s right. We made a point of starting our company in California for a couple of different reasons. California, as a community, has some of the strictest environmental and worker safety laws in the world. We knew that if we manufactured here and could make our business work, that we’d be a successful company. Essentially, as opposed to a lot of companies which search through Asia for the easiest and least expensive place to manufacture, we went to the hardest and most expensive place to manufacture, California, to start. We said we can do it here. When I walk to our factories — by the way, our factories are a half hour drive from my house — when we go to our factories and I walk the floor, which we do on a regular basis, we know that the workers here are being watched over by an enormous regulatory umbrella, some say heavy regulatory umbrella, but quite frankly, that’s our competitive advantage because we can make it work here. That’s true nowadays for a lot of the United States. Our main market right now is the United States, and when you think about toys coming from Asia — we did the math once — is that when you manufacture toys overseas and you bring them to the warehouse, it’s normally 10,000 miles from the factory to the warehouse. I mean, think of the transportation costs, think of the carbon emissions. Our manufacturing facility is 10 miles from our warehouse, so what happens is when you make your supply chain super tight, not only can you keep quality high because everything happens in real time, but what it allows you to do is it allows you to bring all that transportation out of the supply chain, saving a lot of energy and quantifiably reducing greenhouse gases. JOHN SHEGERIAN: For our listeners out there, we’re talking Robert Von Goeben. Robert, what is the most popular toy? I’m on your website, and it’s a beautiful website. It’s greentoys.com. I’m looking at the airplanes, the build-a-bouquet, the dump truck. What are the hot sellers? What’s hot right now? ROBERT VON GOEBEN: What’s hot right now, interestingly enough, are bath toys. We have a tug boat, a submarine, we have a ferry boat where little cars go on, and what’s interesting is bath time is not only fun time for the kids, but it’s relaxing time for the parents because the kids are in the bathtub, they’re having fun, they’re getting clean. It’s almost become a family ritual, if you will. So, we sell lots of different toys in lots of different categories, but I highlight that just because it’s one of those areas where we can combine an incredible amount of fun, a really good use of plastic in toys because it’s waterproof and when it gets some soap scum on it or something, our toys you can throw right in the dishwasher. So, we do really, really well with bath toys, but then also vehicles. We sell dump trucks, and we literally have a recycling truck and things like that. It’s the tried and true, really basic open play, kids can use their imagination. That’s what’s really driving our business. JOHN SHEGERIAN: I’m looking at the recycling truck right now. It’s two shades of green. It’s really cute. I think I’m going to have to get that one. That’s a winner right there. I like that. ROBERT VON GOEBEN: I’ll tell you one of the trends that I think we’ve been lucky enough to go into, which is you and I had a childhood that — I’m 52 years old. I had a childhood, a Leave It to Beaver type of childhood, where I got on my bike and I rode around the neighborhood, and we had this childhood. Nowadays, many kids don’t have that kind of childhood because society has really just changed. So, there is really a feeling among parents, it’s almost a nostalgic feeling among parents, that they want their kids to have a real childhood. You know, we have apps and TV and all these things that come in, but there’s really a need among millennial parents that are just saying, “I want my kid to be a real kid with a real childhood.” So, that’s what’s driving them to Green Toys, but in addition to all the eco message, these are just real toys. I mean, our toys have no batteries. We don’t use electricity. We don’t even use screws. It’s just regular, good old fashioned toys, and that is what millennial parents nowadays are really looking for for their kids, real toys for real kids. JOHN SHEGERIAN: I love that. Real toys for real kids. Robert, we’re down to 60 seconds. What is going to happen with your company? What’s your dream, and what’s you and your partner’s dream for the next five years? When you come on Green is Good five years from now, what are you going to be telling us? ROBERT VON GOEBEN: I think that the most popular toys in the United States, are Mattel, Hasbro, Lego, and Green Toys. At this point, our mission is scale. Our mission is to be able to take what we do and affect every family in America, and be able to really bring that to everyone because we think everyone can benefit from the things we’re bringing there. So, five years from now, if I come back on, I want to be able to say the largest toy companies are Mattel, Hasbro, Lego, and Green Toys. JOHN SHEGERIAN: It’s going to happen. Real toys for real kids. Go to greentoys.com. Buy them today. Thank you, Robert, for being a visionary and innovative entrepreneur. You are truly living proof that green is good.