Munchkin Baby Gear Company Grows Up

Unless you had a baby over the past 30-odd years or are in the baby products business, Munchkin Inc. is probably not on your radar, but it should be.

Founded in 1991 by investment banker turned entrepreneur Steve Dunn, it became an immediate sensation offering innovative and practical solutions to all-too common baby-care issues, like its two-in-one baby bottle and nipple cleaning brush with a suction base to hold it upright, the company’s first patented product.

Now Munchkin is taking the same innovation-led, problem-solving approach to venture into housewares, adding an extra element of design so they can be displayed on the counter, not hidden away.

And hoping that lightning strikes twice, it is starting with a collection of dishwashing brushes with a magnetic holder so they look right at home next to the faucet.

“We knew we had a hit when DB, our chief brand officer, invited an interior designer into her kitchen, and all she wanted to talk about was the brush set – Not the stove, the countertop or the sink, but the bottle brushes,” Dunn quipped.

The new housewares collection is launched under the brand name Curio Home Goods. It is the company’s first step beyond the baby and childcare market with the long-term goal to bring innovative disruption to a range of multi-billion dollar categories.

“Our intention is to have a number of different businesses under a house of brands,” he explained. “We have enough ideas and opportunities to more than double, even triple, the business over the next five or six years. Curio is our first focused on the kitchen, but we hope soon to be in every room of the house.”

Innovation Is The Secret Sauce

At the start, Munchkin got visibility on retailers’ shelves with a line of licensed baby bottles. But with industry giants like Gerber, Playtex and Evenflo dominating that market, Dunn wanted to make more of a splash in the baby business, so he dropped licensing to go full-tilt into developing and patenting new products, all with an innovative twist, like its temperature-sensing spoon that changes color when the food is safe for baby to eat.

“We still make some products that aren’t patented, but 328 patents later, we now have more patents than employees, and most are developed in-house by our product designers,” Dunn declared.

Innovation is bred into the corporate culture. “Part of every employee’s job description is product development, whether they work in accounting, marketing, or in the warehouse,” he explained, adding that an employee is rewarded for a new concept that turns into a marketable product, and they get a higher reward if it can be patented too.

In addition, some 125 of the company’s nearly 300 employees own stock in the company. “We really believe in sharing success and upside with the people who are responsible for it,” he said. Early on, the company took a $45 million round of investment capital but paid it all back and has gone it alone ever since.

Currently, Munchkin offers some 4,000 SKUs, and approximately 30 new products are introduced each year, with others coming off the line for either a reboot or retirement if their customer ratings fall below 4.0 stars.

“I want to put our products on the table with all the other competitors’ and have at least nine out of ten customers say, ‘I would buy this Munchkin over the other brands,” he continued. “The world doesn’t need more products; it needs quality innovation that solves problems.”

By leaning into innovation, the company has racked up more than 180 international product and brand awards, like having three of its new products honored by the Juvenile Products Manufacturers Association’s Innovation award in 2022, the only company to get more than one JPMA blue ribbon that year.

And from 2019 through 2023, it’s held top spots in iF Design’s rankings, top 10 in Babies/Kids and top 25 across all brands in North America, with Apple
AAPL
the pacesetter at number one.

Out Of The Nursery, Into The Rest Of The Home

The company will bring the same focus on design and innovation to the first Curio housewares collection for the kitchen. Besides brushes, it also includes cleaning sponges with a magnetic catch and a holder to mount inside the sink so the sponge dries out between uses.

Another item in the collection is a weighted paper towel holder, which uses the space inside the mounting rack to hide a refillable spray bottle for countertop cleaning fluid.

The introductory Curio collection aims to be useful, practical and have a unique point of difference.

“They are all going to have a magical twist,” Dunn related. “They are going to have hidden functions buried in beautiful design. It’s a real marriage of form and function. We want to create that ‘aha’ moment.”

That’s the inspiration behind the Curio brand name; every item is designed to inspire curiosity.

However, Munchkin Inc. will require a name change as it expands into the rest of the home with a house of brands. One is already in the works, though Dunn held that close to his vest.

And it will follow different paths to market for each brand. For example, whereas Munchkin baby products are geared toward brick-and-mortar retail, with 60% of revenues from retailers like Target
TGT
and Walmart
WMT
and 40% derived online, Curio will be initially launched direct-to-consumer, and each product’s special twist will elevate it beyond the mass-market competitors’ offerings.

Proof of concept is the appeal of the current Curio collection in the gifting market. “It was surprising. Who would think to give sponges and bottle brushes as gifts?” Dunn observed. And this insight led the company to design elevated DTC packaging suited for gift-giving, and it adds a little excitement for self-purchasers when they receive their delivery.

But the company isn’t dismissing brick-and-mortar retail for the Curio line, but it is clearly more Williams-Sonoma
WSM
than Walmart.

Disciplined Innovation

While innovation is the company’s secret sauce, discipline may be Dunn’s super-power. This combination of left-brain rationality and right-brain creativity made Munchkin a leading baby brand and will propel forward the house of brands concept he is determined to create.

Dunn’s discipline is evidenced by the guardrails he set up to guide the company, like the 4.0-star ratings’ rule, where products that fall below that mark are pulled from the line. Other guideposts he runs the company by are to maintain 45% or better gross margins and achieve 10% top-line growth.

And he is proud to share the results of applying the science of disciplined management with the art of creative innovation.

“We’ve been profitable since the first year of focusing on innovation. And now we are applying what we learned in the baby space across a range of categories,” he concluded. “We’ve got ideas for problems that people didn’t know they had or think could be solved. We’re very excited about what the future holds.”