Saturday, January 19, 2013

Cloth Competition: FuzziBunz in the Shark Tank

After viewing the past Shark Tank episode with my family, my husband and I had an in-depth conversation about FuzziBunz Cloth Diapers and our sentiments over the episode.  I was expecting to leave the episode energized with a “Go cloth diapers!” feeling.  While I was excited about the exposure for cloth diapers, I felt somewhat disgruntled about the episode.

Dupuy went into the Tank requesting $500,000 with 15% stake in the company.  She revealed that FuzziBunz had 3.4 Million dollars in sales last year, yet only a small percentage of that in profit.  I suspect some of this drain in profit was due to damage control from defective products produced at their manufacturing plant in Turkey.  FuzziBunz recently offered a lifetime warranty on their diapers produced after 2010, which is wonderful for the consumer but has certainly cut into profits.  FuzziBunz has announced that production of their diapers is moving back to the United States, which will surely curb the small percentage of defective diapers released to the market.

Dupuy also revealed that she has several patents for her “stay dry” pocket diaper design, and that a previous plant worker had stolen intellectual property from her company and started their own diaper business.  We can't confirm any particular company, but rumors have it that this FuzziBunz look-alike was marketed with three design modifications.  The pocket diaper stuffs from the front of the diaper (instead of the back), an additional snap is added to the diaper for a “cross over” feature, and the number of buttons to adjust sizing is reduced.  The similarities between the two products are very striking.  In terms of price, FuzziBunz and the copycat are almost identical.

I’m not certain about all the details of the FuzziBunz pocket diaper patent.  For example, does it cover the idea of the pocket concept or is this only affecting fleece-lined pocket diapers?  There are a multitude of pocket diapers on the market, and many of them are fleece lined.  It would be impossible for FuzziBunz to go after all the companies infringing on the patent, however it might be best for Dupuy to start by going after the copycat and work a deal to pay royalties for patent privileges.

After our discussion, we felt that FuzziBunz will persist in the cloth diaper market for two reasons.  First, they produce a product that is high quality and is among the most widely used and liked among cloth diapering parents.  Additionally, their lifetime warranty gives parents confidence in selecting their brand over another brand. Second, they are expanding their production into new products appealing to more consumers.

Like it or not, cloth diapers are here to stay.  The recent episode of Shark Tank only illustrated that the cloth diaper business is fiercely competitive, and the market is growing as more parents make the switch.  The real winner in this episode was the consumer who just learned they could diaper all their children using a stock of 12 reusable diapers for around $240.

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