WEBVTT - Mattel CEO Ynon Kreiz Talks Toy Industry, Supply Chain

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>But we begin with Mattel, the toymaker, which relies for

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<v Speaker 2>a large part of its business on petroleum based plastics.

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<v Speaker 2>It makes iconic brands like Barbie and Fisher. Price has

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<v Speaker 2>accelerated efforts to diversify its supply chain as it navigates

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<v Speaker 2>oil price volatility and tariff uncertainty. Joining us now as

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<v Speaker 2>the CEO Eon Christ He joins us from the UBS

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<v Speaker 2>Global Consumer and Retail Conference in Midtown Manhattan, Enon. Thanks

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<v Speaker 2>for your time. Let me first get your take on

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<v Speaker 2>the war in Iran. It doesn't look like it's going

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<v Speaker 2>to let up anytime soon. How are you dealing with

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<v Speaker 2>it at Mattel.

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<v Speaker 1>Well, I'm matt Thanks for inviting me. You know, like

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<v Speaker 1>the rest of the world, we're following developments and we'll

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<v Speaker 1>see where things go. We believe over the next few

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<v Speaker 1>days or a couple of weeks it would be easier

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<v Speaker 1>to know where things are heading.

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<v Speaker 3>It feels like it's just constant supply chain disruption. Perhaps

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<v Speaker 3>you've gotten more use to trying to tackle it in

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<v Speaker 3>on after COVID and tariffs, but now there's this concern

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<v Speaker 3>what happens to petroleum based products like those like toys

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<v Speaker 3>that happens at MATEL. How do you think about hedging

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<v Speaker 3>higher oil prices? How do you deal with that internally.

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<v Speaker 2>Well.

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<v Speaker 1>Supply chain is one of our competitive advantages over the

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<v Speaker 1>last few years. We continue to diversify and evolve our

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<v Speaker 1>supply chain and develop a system that is flexible and

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<v Speaker 1>modular and is able to respond and adapt to changing

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<v Speaker 1>market conditions. Typically, when supply chain is tested, we stand out.

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<v Speaker 1>We stand out and we navigate situations. It's not that

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<v Speaker 1>we're insulated, but we have the system, we have the

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<v Speaker 1>capabilities and expertise to navigate changing market conditions.

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<v Speaker 2>We heard from Downstound the beginning of his second term

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<v Speaker 2>saying that you know, maybe kids only need one or

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<v Speaker 2>two dollars, not thirty. No one gave the message to

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<v Speaker 2>my daughters. But we've seen toy prices actually come down

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<v Speaker 2>in the last few months. Obviously there was a rise

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<v Speaker 2>when we put the tariffs on, and I think we've

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<v Speaker 2>got this brilliantly charted by our economics correspondent, Michael McKee.

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<v Speaker 2>But then we've seen drops in December, in January, in February.

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<v Speaker 2>We're seeing toy and game prices falling. Can you explain

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<v Speaker 2>that drop?

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<v Speaker 1>Well, the toy industry is a growth industry. It's growing

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<v Speaker 1>twenty three out of the last twenty five years. It

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<v Speaker 1>grew strongly last year at over six percent, and we

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<v Speaker 1>saw positive consumer demand for our product in the fourth

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<v Speaker 1>quarter and the full year, both in the US and internationally,

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<v Speaker 1>So we do see demand for our products. We saw

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<v Speaker 1>it last year. Growth came from both prices but also

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<v Speaker 1>a value so the industry is healthy. We know that

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<v Speaker 1>play is a fundamental human behavior that parents will always

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<v Speaker 1>prioritize spending money on their children, especially when it comes

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<v Speaker 1>to quality product and trusted brands. And it's also a

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<v Speaker 1>strategic category for retailers that it's driving food traffic and

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<v Speaker 1>toy shoppers spend more time in store and typically have

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<v Speaker 1>a bigger basket, so it is a strategic category for retailers.

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<v Speaker 1>And we expect the toy industry to continue to be resilient,

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<v Speaker 1>not completely insulated, but resilient in challenging economic times. And

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<v Speaker 1>we believe it's a growth industry that will continue to

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<v Speaker 1>grow over time.

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<v Speaker 3>Just on that point edon, have you seen any change

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<v Speaker 3>in behavior for the past week and a half?

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<v Speaker 1>Not too early to tell too early to tell, But

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<v Speaker 1>as I said, this is an industry that is driven

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<v Speaker 1>by innovation and big brands. The importance of big brands

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<v Speaker 1>is higher than ever in a world of unlimited shelf

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<v Speaker 1>space and r biquitous distribution. That this is not just

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<v Speaker 1>in toys, it's also an entertainment and other consumer facing

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<v Speaker 1>parts of the industry of the economy. So big brands

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<v Speaker 1>are always going to stand out. And this is exactly

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<v Speaker 1>the core part of our strategy. How do we leverage

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<v Speaker 1>the strength of our brands, the fact that people are

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<v Speaker 1>proactively looking for opportunities to engage with our brands to

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<v Speaker 1>create experiences and product that stand out and continue to

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<v Speaker 1>excite in the light fans all over the world.

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<v Speaker 2>How do you do that with hot wheels specifically, non

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<v Speaker 2>because Barbie, you know, I see everywhere and we all

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<v Speaker 2>watched the movie and there's no question about where to

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<v Speaker 2>pick up those products with hot wheels in matchbox. I'm

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<v Speaker 2>not really sure where to go to get these things.

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<v Speaker 2>Sometimes I see them like on an otherwise empty shell

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<v Speaker 2>fit best Buy, or occasionally they're in the supermarket at

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<v Speaker 2>the checkout. But I only see the kind of visibility

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<v Speaker 2>for those cars that I do for the.

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<v Speaker 1>Dolls well hot Wheels achieved last year, it's eighth consecutive

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<v Speaker 1>record high, and we expect another strong double digit growth

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<v Speaker 1>year for Hot Wheels in twenty twenty six. Hot Wheels

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<v Speaker 1>is perhaps one of the best representation of our brand

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<v Speaker 1>strategy and how we continue to grow our IP driven

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<v Speaker 1>play and family entertainment business. You're seeing innovation in Hot Wheels.

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<v Speaker 1>We're expanding bay patterns, user demographics. We seeing a very

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<v Speaker 1>large contingent of adult fan and collectors. We're offering more content,

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<v Speaker 1>more experiences, stunt shows, the Hotwells, Legend tour, mobile games,

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<v Speaker 1>and it's becoming a lifestyle brand. It's much more than

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<v Speaker 1>a toy. It's lifestyle brand and we sell product in

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<v Speaker 1>five hundred thousand stores globally. Hot Wheels is in every

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<v Speaker 1>single one of them. And the good news bad news

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<v Speaker 1>in what you just described is that in some cases

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<v Speaker 1>we cannot keep up with demand. There is a lot

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<v Speaker 1>of excitement around Hot Wheels, and you should also look

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<v Speaker 1>at Mattel Brickshop, which is our Hot Wheels branded The

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<v Speaker 1>building said play pattern that is that something is something

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<v Speaker 1>we launched last year is and selling like hotcakes. We

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<v Speaker 1>cannot keep up with the men. It's really about innovation

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<v Speaker 1>and bringing these brands to life in new ways that

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<v Speaker 1>the light fans and continue to evolve and expand the

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<v Speaker 1>experience beyond the toy isle.

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<v Speaker 3>In the world of innovation, I think the other thing

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<v Speaker 3>people are quite excited about Enon is your partnership, your

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<v Speaker 3>collaboration with open AI.

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<v Speaker 2>When are we going to.

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<v Speaker 3>See our first AI produced toy Enon? When might we

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<v Speaker 3>get something out of that partnership.

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<v Speaker 1>We continue to innovate in different ways and look to

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<v Speaker 1>embrace technology and benefit from our ability to find new

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<v Speaker 1>ways to engage fans. When it comes to AI, we

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<v Speaker 1>believe this will be a meaningful addition to how we work,

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<v Speaker 1>how we innovate, and how we do things more efficiently,

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<v Speaker 1>more productively, faster at lower cost. In terms of integrating

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<v Speaker 1>technology and AI into our product and experiences, we believe

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<v Speaker 1>that this will represent an exciting way for us to

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<v Speaker 1>reinvent and amplify existing play patterns and at the same

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<v Speaker 1>time do it very responsibly. Given the implication of AI,

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<v Speaker 1>so we're very mindful of privacy of safety and how

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<v Speaker 1>do we embed and integrate the technology in a responsible way.

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<v Speaker 1>We will be able to share more later this year,

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<v Speaker 1>but we're very excited by the things we're working on.

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<v Speaker 1>And again it's all down to innovation and changing paradigms

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<v Speaker 1>and looking at new ways to reach and engage fans

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<v Speaker 1>all over the world.

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<v Speaker 3>All right, Enian, thank you very much for joining us,

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<v Speaker 3>and enjoy the rest of the conference that is enon

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<v Speaker 3>Christ CEO of Mattel