Word travels fast in the adult industry, and many people already know that Kai Grünenwald joined Fun Factory in May to become the head of marketing and distribution for the Bremen-based company. We’ve given him a few months to get settled in, but now it’s time for an EAN interview about his new job and the challenges it brings, about his experiences in the world of adult products, and the developments in the sex toy market.
First of all, congratulations on joining Fun Factory. Since when have you been working for the company now, and how did you land this job? Kai Grünenwald: Thank you. I’ve been with Fun Factory since May 2016. I ran into their CEO, Dirk Bauer at the end of 2015, and he asked if I was interested in working with the team. At the time, I was preparing to sell 42reports, a company I had co-founded, so this was a great opportunity for both of us to lay the groundwork for a future collaboration. Dirk and I have known each other since 2007 when I started Loewie Ltd. In Hong Kong.
What were your reasons for taking on this new challenge? How important was Fun Factory’s reputation as a creative force in the adult industry?
I have always been fascinated by this industry. And it’s no wonder, really. We are moving people! Fun Factory is a big, well-known, and hands-on brand that stands for excellent quality and top-notch design. They rank among the pioneers in the adult industry. The opportunity to support their economic growth and future success was what appealed to me the most. Fun Factory is ready for the future.
They have a great team, a world-class development pipeline, they have a rock-solid financial foundation, a clear ownership structure, and state-of-the-art production facilities in Germany. Oh, and last but not least – something I had suspected for a long time and know to be true 100% now: It is tremendous fun to work at Fun Factory!
How have the first few months at Fun Factory been for you?
I used this time to familiarise myself with the corporate structures and to get to know the team. Working with our dependence in the US has also been an important part of my work so far. Our American colleagues have an uncanny talent for coordinating distribution and marketing, and we have taken a few sheets out of their book for the team here in Germany. Our growth rates in the US only go to show what great work they are doing over there.
Now, we have to make sure that Fun Factory meets and satisfies the market needs. We are currently developing a comprehensive strategy to improve the visibility and public profile of the brand, both in the b2c and the b2b segments. My job in all this is to help the team work out the kinks and then implement this strategy.
Please, give our readers some information about yourself. Since when have you been in the adult industry? What did you do for a living before you joined our ˈvibratingˈ market?
No problem! I first started working in this industry in 2007 when I launched the company Loewie Limited in Hong Kong. Prior to that, I had been working in the purchasing department of Arcandor (previously known as Karstadt-Quelle). When I saw how many cheap vibrators they bought for their catalogues, I knew what I wanted to do.
My plan was to establish another strong brand in the market, next to Fun Factory and Lelo. We named this brand Nomi Tang, but product development took up so much time and so much money that in 2008, I decided to focus on importing established brands. The first guys I got on board ware Eros and Megasol, and as time went on, many other brands started working with Loewie, among them big names such as Sliquid, We-Vibe, Lelo and – Fun Factory.
In 2012, I sold my shares to one of the other co-founders and started a two-year tenure at Siemens AG where I worked as Business Development Manager. But before long, I returned to the adult market because I knew how much potential there was in this industry.
I ended up becoming the co-founder and CEO of 42reports, a retail analytics software company. We used the WLAN signals of smartphones to count the customers in brick and mortar stores. It was fascinating work, but it was also incredibly complex. In the spring of 2016, we sold 42reports to a system provider called Dilax. And now, I’m back doing what I like to do best.
Do you benefit from the experience gained outside the adult industry now that you are back?
Sure! I think there are lots of things that I can draw from, experience that will help me work with Fun Factory’s wide and varied network of partners. And of course, I am also super happy to see lots of familiar faces and old friends again and even be working with some of them.
The job of a Marketing and Distribution Manager seems pretty self-explanatory, but still: How would you sum up your duties and how do you approach your work?
At Fun Factory, I am in charge of coordinating the marketing and distribution strategy, working with different departments to create synergies that benefit us all. My experience in the digital world, in customer service, and in design comes in handy as well. We work across units and departments in this Fun-tastic team, communication is direct and immediate, and there is a constant exchange of ideas and feedback. My duties also include the planning and execution of product launches, marketing controlling, and budget management. But the main focus is obviously on brand development. That said, I also get involved in customer service and corporate communication every now and then.
Are there ideas or improvements you want to implement in this new position? What do you want to change or improve?
First and foremost, I want to foster interdisciplinary communication and networking within the company. We have so many bright minds on our team and there are many guys who have been with the company for a long time, meaning they know the brand inside and out. We make a point of listening to every idea from every department. Furthermore, we want more specialist knowledge. For instance, we only just hired a social media expert.
Are there big difference between sales and marketing in the sex toy industry and other markets?
I think that the expectations and requirements are more or less the same you’d see in other markets. Reliability, integrity, and team spirit matter in any business in any market! Our customers and we ourselves are in this market to be successful together so our companies can grow and develop in sync with the market and its ever-changing demands.
How do feel about the current state of the sex toy market?
Sex toys have reached an impressive level of social acceptance. Women have become a strong, independent, and knowledgeable audience. That notwithstanding, there is still room to grow and improve, and there are still a few taboos left to overcome.
Looking at the market from an entrepreneurial point of view, there are more and more new companies entering the marketplace, creating for a very dynamic environment.
Unfortunately, there is also a downside to this development since the competition affects the profit margins of many trade members and producers. Industry and trade have to work together and find solutions to make sure this market continues to grow, continues to be healthy, and continues to deliver quality products and brands.
How does Fun Factory manage to stay abreast of all the changes in this market? And do you feel you are ready for the future of the sex toy industry?
We are certainly in great shape in Germany/Austria/Switzerland and in the US, and we are also going to strengthen our position in the pan-European market, in Latin America, and in Asia. Implementing a multi-step strategy, we are going to further expand the Fun Factory brand and support our partners in the trade with effective, solution-oriented POS materials. Also, we want to do our part to support the brick and mortar trade. Therefore, we will offer training courses for the sales staff at the stores.
We have been a part of this market for more than 20 years now, offering a full range, and again and again, we delivered ground-breaking new concepts – such as the STRONIC pulsator, the pulsator-vibrator combination of Bi STRONIC FUSION, or our men’s toy COBRA LIBRE.
Our enthusiasm, our fascination with innovation, and our pioneering spirit have been our motivation since day one, and we have harnessed this drive to create innovative, exciting products, catering to men, women, and couples in equal measure. Our diverse range of products appeals to a wide and varied audience, so as long as we keep making their wishes come true, we’re ready for the future.
”Our enthusiasm, our fascination with innovation, and our pioneering spirit have been our motivation since day one, and we have harnessed this drive to create innovative, exciting products.“
What were the most profound changes and developments in our industry these past few years?
Well, we’ve seen the rise of one-product brands like We Vibe and Womanizer. Apart from that, another major change has been the arrival of venture capital and private equity in the adult industry, for instance at Amorelie and Pipedream/Jimmyjane. Moreover it seems that the brick and mortar stores are becoming more popular again which I find to be a very interesting trend. More and more consumers have bad experiences when buying adult products on the internet, so they go back to the walk-in stores.
Fun Factory stands for quality products. But of course, you can’t tell the quality of a product from the packaging. Personal advice is particularly important for first-time buyers. Retailers who have stores in popular, much-frequented locations and pursue reasonable investment strategies will definitely benefit from this development in the long run.
Could you bring our readers up to date on upcoming Fun Factory product launches? What can the market be looking forward to these next weeks and months?
I’m really sorry, but I can’t give any details. What I can say, however, is that we are constantly working on new ideas. At the moment, we are analysing the market to have the right products ready at the right time, complete with effective POS campaigns to support our retail partners. We should do another interview in a few months, there will definitely be a lot of new things to talk about. So long!