Episode #598: Building an American-Made Brand-Jim Stallman Discusses Eco Global and Imagination Playground

0:01 This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing to our podcast long time family business out of Providence, number of different product lines. We've talked about the Halo segment in the pelt side. I'm also going to talk about playgrounds, talk about leather, talk about pivoting a family business. So Jim, welcome to Halo talk show. Finally. Thank you. Thanks for having me. Awesome. So I look through your background here, run eco global manufacturing, been a family business for a long time. So give us the background on how this started around World War II with your father and then talk about the sequential adds on this business, how those journeys started and where.

0:59 So going way back, my grandparents were upholsterers in Providence, Rhode island. So from the upholstery business. My dad, when he came back from World War II, he was in the Navy in the Philippines. And when he came back from World War II, he basically was starting in the upholstery supply business. So that goes through the 40s and the 50s. He grew with the upholstery supply business, selling, you know, this is old time horse hair, you know, stuff like that, tax, you know, binding fabrics, things like that. Then in the 60s Behr came along with the first urethane open cell urethane foams, which is the cushion foam that we know today, that is in the majority of, of seating and packaging and everything else. So that, you know, led to packaging, a bunch of cushion work, all sorts of stuff. And then when I came in, around the latter part, I started working here in the plant when I was 12, working in the machine shop and then driving trucks and then, you know, doing all the jobs that you would do as a young person growing up back in the day when there was manufacturing all over Rhode island, it wasn't just the few of us that remain.

2:15 So we found and started to develop crosslink foams, roll foams. Basically if you get an ekg, that white foam that holds the lead to your chest, that's a piece of crosslink foam or the foam that's behind a 3M command strip, that white stretchy foam. We got into the distribution of that, then started, we built a plant, I built a plant in upstate New York to manufacture that. That got us into the bun business and a lot of specialty items. And we started running. We were asked to develop a special formulation for Imagination Playground. When that started with between David Rockwell and kaboom, a non profit playground installer. So we became the manufacturing arm of Imagination Playground. Then in the interim we bought another process of an open pore urethane, a gel system. So everything related around medical and some packaging, cushioning. We did a great program for the Hope Lodge, which we call Pillows for Hope, where we donated pillows to every Hope Lodge in the US if you don't know about American cancer and Hope Lodges, look it up. It's a wonderful program.

3:32 We put pillows on every bed and every Hope Lodge in the US and so a lot of, a lot of fun things have come out of, of our world. But we really pivoted from the lower end packaging, you know, box, that kind of manufacturing into the more technical products. Then in 2018, we ended up buying Imagination Playground, the brand. So we became the end seller as well. And we did that to keep the manufacturing here in the US they had a guy who was running it, trying to move it to China. Didn't make sense for anybody. David Rockwell. And I said, let's keep it in the US and we worked together and made that happen so that we took over and kept all the manufacturing here in the US Here in Providence.

4:20 Then we developed. You can see behind me, I have part of the chew' Ems logo up. We ended up with some injection molding equipment. We started working around a couple of programs because of my background in plastics. We came up with our own version of a nylon chew toy to compete with nylabone. But we managed to infuse ours. We have it with and without cbd, so we have a calming nylon chew toy. So we went D2C and retail with that as well. So what's happened is we kind of went from being an OEM supplier to Medtronics, Pfizer, Covidian, you know, the medical lines, Medline, to being a really a direct to consumer, direct to end customer supplier, which is what we do now. So now we go all the way from original design and development. We build our own tools, injection molding tools in house. We move them right onto our own machines. We use our own formulations to create the product.

5:24 We design our own packaging with our team. We print packaging outside. We don't do that here, but we do all the fulfillment packaging, final fulfillment and ship from this location throughout the world. So Chums is everywhere in the U.S. imagination playgrounds in 75 different countries and in every state in the U.S. so we're, we're all over the place. So when rest of the world was looking out everything except brand or what their competency was, you decided to vertically integrate? Yeah, but also I'll just add, I'll just add in there really quickly because I am a Bitter American manufacturer, because I saw all the products that we helped develop at, whether it was Hasbro here in Rhode Island, Timberland with orthotics, whether it was massage rollers that we had in Dick's, I watched those products that we helped develop here with our technology and our talented people. I watch them get reproduced to China and then move to China.

6:34 So, right again, I, I am a little bit bitter in that we're, you know, we're fiercely American made. Gotcha. And how over the last couple of years has that helped from a marketing standpoint, in addition to a tariff or cost of shipping and inflation and so on and so forth? Well, during COVID we watched incoming containers go from $2,800 to $35,000. So we got some instant protection there. And back in the day, we always felt protected by the distance stuff had to travel from China. The problem is that China subsidized a lot of that, subsidized a lot of the shipping. So some of those protections by distance vanished.

7:24 And then, you know, the Internet and, you know, being able to develop things quickly and, you know, design here and send electronic files overseas and get stuff made fairly quickly, it's still a lag. And you know, then they've got quality operations over there. So it's changed in that in, you know, the 80s and 90s and 2000s, it was harder to do business in China. Then it became easier, but still an additional expense in that the amount of, of investment you had to make in the logistical, you know, inventory lag time. And then, you know, for us, I always felt, you know, we're kind of a face to face, you know, person. We like to develop and design with people that are around us. I like, you know, to be able to talk to people and, you know, talking to people in the middle of the night in, in the Far east never, you know, really was our bag.

8:20 But so Covid gave us a little bit of protection just because of the screw up in the logistics. Now we're all of our stuff's in the US we weren't affected by that. Then the, our shipping overseas got a little bit more expensive because we're shipping out, so we're exporting, we're a net exporter. And then now things are a little bit jumbled, you know, just with the, all the issues that are going on with oil and moving things around. But all in all, being fiercely American made has been an advantage. And I feel like people are starting to recognize the importance. And I think Covid taught us that with you Know, PPE and things like that, that you have to still make product here. It's still important to make things here. And it's also, you know, it's more fun.

9:16 This is Pete Moore. I want to let you in on a little secret. There's this company called Promotion Vault. And what they do is they give out rewards from retailers that allow you to incentivize your members without having to do zero down and one month free or giving away shakes or giving away T shirts. What you want to do is build a rewards program that lasts, that people value and that doesn't discount your own products and services. So here's the deal. There's something called Rewards Vault. The Rewards Vault is going to allow a member to set up their own profile. They are going to answer questions, you are going to get those answers. You're going to be able to target those members and you're going to reward them inside your club, inside your spa, and outside of the club and outside of the spa to get them to become loyal, to get them to pay their monthly dues and to be rewarded properly for the actions. A lot of companies are cutting back on rewards. You shouldn't be.

10:12 Promotion Vault, your answer, trust me, this is real. How has your perspective changed on marketing brands instead of marketing products on behalf of or manufacturing on behalf? You'll be honest with you, I enjoy it a lot more. I am. I enjoy. Before we were kind of the man behind the screen, we would do all the design work and then we'd let them, you know, sell the product and we'd kind of, you know, it was all relationships and we'd get the business and it was, it was fun in that respect where you'd see your product out on the shelf and you know that you had a hand in it. But there were other engineers, you know, like Hasbro. There are other people that were involved in it now. It's, it's fun because, you know, it's, it's easier to move levers and make decisions. And, you know, it's also a little bit scary because the decisions are yours to make for the product that's in the field. So. But I do, I'm energized by it. I like it. We've got a lot of really great creative people here and we, because I grew up as a salesperson first, we're always listening to our customers and like even our, you know, our, our, you know, not latest upgrade, but we did a transportation set for Imagination Playground, which was a big reveal

11:43 and that the association of Children museums a couple years ago, and then we entered it into a design award for playgrounds in Europe and we won a bronze medal. That kind of stuff where we listened to our customers, we adjusted the product by what they said, what they wanted, and then took that end product and threw it into a design award against, you know, multimillion dollar playground installations like tens of millions versus our little playground set. We came in third. You know, it's not first, but it was still, still fun. But it was fun for everybody at our place to be involved with that entire process and have ownership of the end result.

12:28 So let me ask you just some entrepreneurial related, kind of inflection point questions. So you're in the upholstery business, you're in the phone business. How does the idea get generated to say, let's go into the pet industry. Who internally says I'm an expert or becomes an expert in the pet industry? And how do you kind of pivot a family off business to say, hey, I might be betting on some, some chewable treats here that are not chewable to the. Well, that kind of grew organically out of. We had a, a comp, a customer who was trying to develop products in house. So we were then and we were an OEM supplier to them and we gave them residence here in our building.

13:23 So that was part of what we're doing. Hey, we'll build the products. You know, you don't have to worry about, you know, storing and we'll store them from here and then we'll ship directly. So in a lot of the ways, like we, the model that we started Imagination Playground with, we started this pet company. In the end, their American made products weren't doing as well as we hoped. They were mostly a, a health and beauty line for pets. So we ended up kind of transitioning away from them. And then we all looked at each other and said, hey look, we know a lot about pets. I have, have had dogs my whole life. I have three dogs now. I love animals more than, I'd say it more than people, but I do, you know, so, you know, that's really our passion. Just like, you know, trying to help kids with open ended imaginative play is a passion of ours. We talk about, you know, project Play Strong later. But you know, to get into the pet business, we said, hey look, we have knowledge of, of this industry, of the materials, the, the nylons, and no one's really designed anything new. We know how to infuse different vitamins and minerals and cbd.

14:34 We can do that. We'll lead the the market in that. And we build our own tools. So it became, hey, look, we injection mold, we build, we build our own tools. We can be fast to market. We've launched some TPE products. This Crunchems product that is a sleeve for a water bottle that dogs can get the crunchy sound of a water bottle. And and then because of Imagination Playground, we had the entire social media team, we had the graphics team, so that we were uniquely able to just very quickly launch and follow up on that. So what buying Imagination Playground did and getting us to that, that last mile, like, you know, you'd say if you were in the, in the, you know, Verizon or something, you've got that last mile. By being able to sell to the end customer and having those resources and core competencies to do that, we then started to look around and say, what else can we sell? What else can we make?

15:33 And where else do we have a strategic advantage over the other competitors in that industry? And it just happens that kids and pets are two things that are the most fun and we're selling into both industries. It's fun. That's great. When you take a look at all the a tick blowback that's happening right now with all the social media companies and amount of screen time, what that's doing to kids from, you know, I used to play running probably six hours a day where there was a kid across the street, part kid, but he was playing dungeons, you know, inside his living room. Clearly became and probably still have a much better athlete. How important has the focus on kids being outdoors and off their phones been to your business as a part of your narrative or marketing angle? Well, so before, before COVID our, our, you know, we would be at conferences, you know, library and NC teachers, whoever. We're talking to children museums, you know, people at the leaders in children Museums and we sponsor the emerging museums conference at acm. I would and I get up and speak. So when I would talk to people, I'd say, hey, look, kids got to get off screens. It's horrific.

17:04 There's too many kids looking at this side of there. That's one of my dogs. But too many kids looking at that screen and not engaging with their friends. Imagination Playground, open ended, collaborative child directed play. You can't beat it. You got to do it. Then Covid hits and then we sentence these children to that, to staring at screens like it's the Brady Bunch. You know, everybody's a box and a screen and we've taken them away from all their friends. And they lost that ability to be able to emotionally regulate, to talk to their friends, to not do things through texting, through a device. And then I actually, what was a segue into operation, place drawn. So at the NAFIS conference, which is federally affected schools, schools that are near parks, military bases, reservations that have kids, but not a huge tax space because there's a lot of federal lands around, around them. I also spoke with the, the people running Mathis, which is military affected schools, and we realized that in, in speaking that kids that are on base don't have access to a lot of the cool things and they don't have, in many cases, they don't have Imagination Playground. And what I didn't realize is these young kids that are, that are the children of service members are moving every year or

18:35 two from base to base. So we said, look, one of the things that could be gigantically important is not only getting kids off of screens and all the positive benefits for just collaborative play and then all the benefits to actual the facility where they've got something that is mobile, it goes indoors, it goes outdoors, it lasts forever, that kind of stuff, but also to have a product that they would recognize as a play spot from one to the next to the next. And that when you arrive at the new location, your new home, you've got something that you recognize from where you left and something that is uniquely suited to create a collaborative environment. So you start to meet friends again.

19:24 And you know, we had a couple people in and we were talking about, well, this is kind of the same thing as sports. It is, but remember, a lot of kids don't play sports. You know, a lot of kids will be, will be turned off by a basketball court because they're not good. So kids might be out there and it can become exclusionary. One of the things about Imagination Playground, it is by its nature inclusionary. It will, and it's the reason that all the blocks are blue. And we, we did this 17 years ago. We, we consciously selected that color so that kids wouldn't have a, a favorite color and go off and play by themselves. The whole goal of this is that kids hang out and play together and they talk and they learn and they build and they do all the things that they're supposed to do that's not on a stupid phone. So. Gotcha. And how many bases have embraced so far? We're, we're on a few. I'm trying to get them on, on every base. That's been my goal.

20:34 That's my passion. Right now we're giving some some sets away. We're trying to find partners. We've talked to some major one defense contractor and some some major supporters and we're just looking for help wherever we can to be able to get this, get this system wide. It's a big ask. We're willing to participate as much as we can, but we're a little company so we're kind of limited. We need a family foundation or somebody to help us out. This is Pete Moore. Here's the last tip for you of the podcast. We are partnered up with a company called higher dose higherdose.com they are the leader in workout recovery products, infrared technology, LED light masks, neck enhancers and other products such as PEMF mats and sauna blankets. If you have not gotten on the workout recovery train yet, your time and your stop is now. You got to get these products in there before these workout recovery and spas end up saturating your market.

21:42 Having your members walk out of the club and going into one of their locations for 200 bucks per month where they're paying 39 to you. Let's become an expert in workout recovery. If we are already an authority in workouts, Higher Dose, check it out. There's a wholesale code and we look forward to helping you augment your products and services to meet the demands of your members. And hey, let's get people happy, healthy and sweating and the recovery should be just as good as the workout. Question related to health clubs, sports performance boxes and YMCAs. That's typically where most of the mentors have emanated from or are working for the halo sector. So hella active lifestyle outdoors. A number of large players such as day clubs on the west coast have catered towards families as the way to lock in higher revenue for family, you know, per month as well as kind of a second or third place work, home and you know, your lifetime fitness or sports facility. Have you gotten traction there with Imagination Playground? Because I think that would be a great opportunity to be some of the

23:15 kids clubs that I'm morphing into. More physical exercise, not daycare. No, I, I completely agree. So now where we're in a lot of ways throughout the US and we're also in a lot of boys and girls clubs as well as a lot of Head Start programs. So anywhere where kids are going to be at play, health clubs are an absolutely wonderful but untapped potential for us. Because when you think about it, unless space is an issue, you know, mom or dad are going to go to a workout or, you know, a yoga class or a Zumba class to be able to bring kids along and then have them instead of sitting on their phone, you know, and waiting or you know, it to be in a, a creative and open play space. It, I think it'd be great. But to, to reach out to though, we need, you know, like we're in, you know, a lot of school related before and after school programs, health clubs we really would need some help getting into.

24:25 Okay. So I think that's another thing. Help with in our whole initiative as a investment banker is basically what we do. We help people raise money and help buy and sell companies. But our underlying mission is to solve loneliness, diabetes and obesity. And the way to do that is connect entrepreneurs with capital if they have a good business model in their local area. Basically a 15 to 20 minute, you know, demographic. So that's kind of what. There's also Kids Strong as an example that just took in private equity money from a group that owns Barry's and D1 Sports Training and fitness.

25:15 That could be super interesting where they got kids coming, helping them with their confidence and physical exercise and programming. So I feel like this podcast hopefully lead into a peaking interest on behalf of the groups who listen to this to say, hey, this is a great idea and a good use of square footage and you know, a fun and popular thing for kids to do. Well, we were through KaBOOM, affiliated with NFL Play360. Oh yeah, sure. And then also we've had sets at PGA Tour sites, part of their kids zone. So anytime and even think about it, if you're running a, you know, if you're running a league, you're running a, you know, a sports camp. Like, you know, both my kids played and did all the club sports and you know, if you're running that and your, you know, younger, you know, sibling isn't playing, you know, it's a great way for kids to continue to be engaged and to continue to be active because it's not something where you sit. It's a Imagination playground is exactly, you know, what you see behind me. Kids, you know, up and moving around and playing and pack it up, move it on and go to the next location. Yeah. So two quick questions before we part here and we'll get this infomercial out to, to our network. One is what is the typical engagement? And then the second question, what is the

26:48 average kind of purchase for enough of the imagination playground? You know, SKU set, Even though we're all blue, no coal mines. I love the cold get that wrong, if I could say something. So the average age. Yeah, the average age is anywhere from old enough to walk, usually through middle school. That's where kids are still in that active play zone. Elementary, third, fourth, fifth grade are really the sweet spot. But what we find is that older siblings will watch their younger siblings start to play, and then they'll join in. And then we've even had team building events at the, like, the Please Touch Museum in Philly is a huge installation of Imagination Playground. They have, you know, nightly events for adults for team building. So there's a lot of cool stuff with that.

27:50 The. The 100 and the classic set. The set that's been there for a while, we've had all sorts of variations of at this point, but you're looking at about a $5,700 purchase and then additional storage options on top of that. And that's enough for 20 to 25 kits. So you can ramp that up a little bit with more curriculum, play training, things like that. But, you know, we have a lot of different options that would suit pretty much any installation. So what we really do and suggest is that people tell us the amount of kids, their budget, if they have multiple sites, obviously we'll work on price. And just remember, we're lean manufacturing here. We're building pieces and then fulfilling sets. So we're running for maximum efficiency of the part. So the best part about being here in the US and making stuff is I don't have to import sets and have extra pieces. You can basically build your own set, or we'll help you design your own set that works best for your particular application.

29:07 Awesome. Well, you are officially now, before you were in the Halo sector as a branded supplier. Out of our Halo, we got Health Activation running outdoors. So you got. You got the outdoors and we got the active lifestyle of pets as well. So you get three out of the four level. And you know, I am always available. I'm in Rhode island. So you just, you know, anybody has any questions, you have any additional questions, I'm Zoom calling all day long and I'm out and about. So if you're somewhere that I'm near, I can always stop by and say hello.

29:47 Thank you. All right, see you. Bye. Thanks. Appreciate it. This is Pete Moore on Halo Talks, your captain speaking. I am the founder and managing partner at Integrity Square. We've been around now for 15 and 1/2 years. We have been helping people like yourselves get capital, do mergers and acquisitions, consulting, strategic advice in the health, active lifestyle and outdoor Halo sector trying to help as many entrepreneurs as possible get to the next level to take that inflection point and be the force behind your growth.

30:28 We are helping companies that have at least $3 million of EBITDA, around $10 million of revenue, and we are positioned to help you get institutional growth capital or to negotiate deals with strategic partners. If you go to integritysq.com isq you can see our capabilities Deck Happy to set up a consultation at any time that is free of charge and we look forward to helping solve obesity, loneliness and diabetes. Go Healing.

31:21 Sa.