Car-seat maker Diono's revenues soar

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Brad Keller admits that back in 1999, he wasn’t sure that a car-seat belt tightener would go very far or generate much revenue. But he was intrigued enough by Russ and Steve Berger’s invention that he jumped ship to see where the Mighty- Tite, a ratchet that helps parents tighten their children’s car seats properly and securely, might take them.

“I didn’t think there was much to it at first,” says Keller, CEO of Diono Inc. “I thought it was an interesting concept that I never imagined would be as successful as it was. And now we’ve become a global company.”

Mighty-Tite won the “Show Off” Product Innovation Award at the Juvenile Products Manufacturers Association show in 1999 and the Most Innovative Product Award from Mother & Baby magazine three years later. Clearly, Mighty-Tite was a hit. Last year, Diono Inc. posted revenues of $27 million, up from $19.2 million in 2010. The company also doubled its warehouse and office space by moving from Sumner to nearby Puyallup.

In late 2011, the firm changed its name from Sunshine Kids Juvenile Products to Diono (dee-OH-no.) Although the name change was initially challenging—Diono is a made-up word that doesn’t exist in any  language, making it an ideal internet domain name—Keller says, “End users loved our new designs and new packaging, and sales skyrocketed. In 2012, we had the best year ever.”

Keller and company executives decided to change the company’s name for a number of reasons. “It was largely strategic,” he notes. “We were becoming an international company and we felt like we could do better. We had an English name that didn’t translate well, and it was hard to print along with our pictures and logos on a 4-inch-wide box, and often ended up getting shrunk down so small it was almost not readable.”

Last year’s success was a long time coming. After starting with the Mighty-Tite belt tightener in 1999, Diono expanded its lineup by adding travel, stroller and feeding accessories such as a baby bottle warmer that plugs into a car’s cigarette lighter socket. Then the firm came up with what it thought was a great idea: a folding car seat.

“We had a unique design concept that we felt was significantly different from what was offered in the marketplace,” Keller recalls, “so we took a chance, hired an engineer and went for it.” Turns out that consumers didn’t care about the car seat’s folding feature. But in order to include the folding option, the product designer had built in a steel frame that made the car seat stronger and narrower than other car seats. Consumers loved the additional room they had in the backseat as well as the added safety afforded by the steel frame.

Diono is still best known for that product, called the Radian convertible car seat. The company went on to build other items with steel alloy and aluminum frames, including the Monterey booster and the Santa Fe backless car seat. The products have undergone extensive safety testing and the high-end car seats, which sell for $169 to more than $300, have received the independent National Parenting Seal of Approval and earned high reviews from Fit Pregnancy, About.com and other leading children’s magazines and groups involved in child safety.

Diono sells some 100 products in 54 countries, and revenues will most likely climb again this year as the company recently signed a seven-year licensing deal to create new products, including a playpen and stroller under the Little Tikes brand name. “It’s a worldwide licensing deal that will move us into six new product categories,” Keller says.

The Little Tikes deal will most likely also require extra capacity. Although it moved to Puyallup only last year, Diono is already bursting at the seams. Keller notes that by next year, Diono will need additional office space and more warehouse space for its products, which are manufactured in China. To prepare for the launch of Little Tikes products later this year, Keller has hired a global marketing firm to help with branding and launch. Historically, the company’s market efforts have included attending industry trade shows and child safety conferences as well as working with key opinion leaders, bloggers and child safety certification experts.

Right now, Diono is a niche player in the upscale car-seat market that’s dominated by Charlotte, N.C.-based Britax Child Safety Inc., which is a unit of Britax Group Ltd. of Chertsey, England. The much bigger Britax makes strollers, baby carriers and accessories in addition to car seats for distribution in the United States, Europe, Asia and Australia.

Today, about 75 percent of Diono’s sales come from its car seats for babies and kids. Some 60 percent of those sales are in the United States, up from 54 percent during the recession. Although the company has sold its products in China for a while, it recently opened its own staffed sales office and warehouse there, which should accelerate sales, Keller says.

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