40: Why Summer Has Just Gone on Sale

Joe Weisenthal (0:07)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal, managing editor at Bloomberg Markets.

Tracy Alloway (0:14)

And I'm Tracy Alloway, executive editor at Bloomberg Markets.

Joe Weisenthal (0:17)

So Tracy, it's the middle of August, and it's about time for a fun summer episode, don't you think?

Tracy Alloway (0:24)

Yes, I think it is. You know, everyone's on holiday, people are thinking about going to nice places with beaches and pools.

Let's give the people what they want.

Joe Weisenthal (0:34)

Exactly right. You know, obviously summer is characterized by pools, hanging out by the pool, barbecuing, grilling, stuff like that. And of course, there's always a market and economic angle to every story.

And so today we're going to talk about these things that we take for granted in the summer and talk about some of the underlying fundamentals behind them.

Tracy Alloway (0:58)

So this is essentially the markets edition of the pool party, or the pool party edition of the markets podcast, I should say.

Joe Weisenthal (1:17)

We're here with Polly Mossens, who wrote a great story for Bloomberg recently about pool toys. And before we get into it, I think pretty much anyone who goes on Instagram regularly sees lots of pictures of people floating in pools in these gigantic inflatable doughnuts, or inflatable swans, or inflatable flamingos.

You certainly see them if you follow Taylor Swift on Instagram. And of course, there is a huge business behind that and a lot of money. And we're going to talk to Polly about that business. So Polly Mossons of Bloomberg, thank you very much for joining us.

Polly Mosendz (1:55)

Thanks for having me, guys. I would love to talk about pool toys.

Joe Weisenthal (1:58)

Great. Let's get right into it. So why is this? How did this become such a huge thing? How big is this business?

Polly Mosendz (2:05)

It is huge. When I was at the New York Toy Fair earlier this year, which was the dead of winter, it was snowing outside. Inside the Javits Center, they had a huge pool toy display. It was the first thing you saw when you walked into Toy Fair. There was a flamingo that was 10 feet high.

It was beautiful and cost, I believe, $400, which is quite the investment for an inflatable pool toy that can pop at any moment.

Joe Weisenthal (2:27)

Think of all the likes on Instagram if you have a 10-foot inflatable flamingo.

Polly Mosendz (2:32)

That's exactly right. So about two summers ago, you started seeing them come up on Instagram, but it really became the thing to have when Taylor Swift, when she was still with Calvin Harris, RIP that relationship, she posted a picture of her on a really beautiful gigantic swan slash pegasus. It was very regal looking. It had golden wings. People were obsessed with it. And that's really where a lot of these things took off.

And you had a couple companies that really became like the main go-to companies. The biggest one among them is Big Mouth Inc. They make about $20,000 a day on Amazon just off their inflatable donut.

One style, $20,000 a day.

Tracy Alloway (3:13)

Wait, this is the pink donut. It looks kind of like the ones that Homer Simpson used to eat in the TV series, right? And everyone's probably seen it at one point or another.

Polly Mosendz (3:22)

That is the exact donut.

Joe Weisenthal (3:24)

$20,000 a day.

Polly Mosendz (3:26)

$20,000 a day. That's a lot of money. Yeah, and that's just off the donut. They have some other really popular items. Their giant pineapple has been huge for them this year.

They have a flamingo whose design they've actually copyrighted. It's different from other flamingo floaties.

So you can imagine how much money they're pulling in off of these floaties during the summer.

Tracy Alloway (3:46)

OK, so with large amounts of money, often comes controversy and conflict and competition as other people try to get in on the act. And the donut in particular seems to have attracted some degree of conflict. Walk us through that.

Polly Mosendz (4:03)

Yeah, so Big Math Inc., which is the big kahuna of floaties, they have found people infringing on their copyright, specifically on the donut. And they found this on Amazon. They started ordering competitors' donuts that they were trying to sell off as Big Mouth products. And when they arrived, they were flimsier material. And perhaps most offensively, instead of having 12 colors of sprinkles, they only had four.

Joe Weisenthal (4:26)

That's terrible.

Polly Mosendz (4:28)

It is.

Tracy Alloway (4:28)

I'd be embarrassed to Instagram myself with a donut without 12 colors of sprinkles.