Now made in Germany, Scrub Daddy cleaners a big hit

Oh, what a ride the smiling sponge has been on.

In 2011, Scrub Daddy was an undisputable cleaning hit - but pretty much only in the opinion of its inventor, Aaron Krause, and some of his family and friends.

The Voorhees resident couldn't get onto store shelves the charming yellow scrubbing disc, carved from a high-tech foam, that turns hard in cold water and soft in hot.

Then came an October 2012 appearance on Shark Tank, ABC-TV's competition show for entrepreneurs. Not only did Krause get national exposure, but he landed one of the judges as a minority investor.

"Wild" is how business has been since then, he said. That would include 750,000 Scrub Daddy pads sold on QVC, and finally landing the long-elusive Bed, Bath & Beyond account - its 1,200 stores selling about 20,000 Scrub Daddy pads a week.

Once only found in a few ShopRite stores in South Jersey owned by a Krause friend, Scrub Daddy is now in nearly 1,000 supermarkets and, per a just-finalized deal, is expected to be in every Walmart in the country by mid-August.

"That's over 3,000 stores," Krause said. "I'm in a state of shock."

Another big change has occurred, though of considerably lower profile. On the Scrub Daddy packaging label, a red, white, and blue map of the United States surrounded by a short statement - "Made with pride in the USA" - has disappeared. That patriotic message has been replaced with just three words: "Made in Germany."

It happened about a month after Krause's Shark Tank debut, where he hooked inventor and infomercial wizard Lori Greiner, who predicted that with her help, Scrub Daddy - retailing for $3.99 - would be "a huge hit" in infomercials and would reach $1 million in sales within a year. (Actually, it happened in 15 weeks, Krause said.)

Krause insists the decision to move Scrub Daddy Inc.'s cutting operation from Delaware County to Germany was his call.

"This is my company and I run it," Krause said last week. The Folcroft-based company's existence depended on the deal he made with his German manufacturer, Krause said. He would not disclose its name for competitive reasons.

The German company is the same one that has been supplying Scrub Daddy with the unique material that distinguishes its cleansing circles from ordinary sponges. That has to do with the way Scrub Daddy cleans without scratching, never turns smelly and holds up.

"There's only one plant in the world that has this technology to make this material," Krause said.

He had already negotiated North American exclusivity on that material prior to his Shark Tank appearance. Scrub Daddy's robust postshow performance convinced him demand would be "going worldwide," and Krause wanted to make sure his supplier wouldn't provide its material anywhere else. The Germans were willing to make that deal but wanted to do Scrub Daddy's cutting work too, Krause said.

That arrangement made sense on two levels for Scrub Daddy, Krause said. He had been using a subcontractor in Aldan for whom Scrub Daddy was not a priority and who "didn't have time for us," Krause said. And he was paying a lot to ship blocks of foam across the Atlantic Ocean - $25,000 a container - only to see a portion of it wind up as scrap after cutting.

"We were . . . spending all this time and money, fossil fuel, to move this trash across the ocean so we could cut it and throw it into our landfill," Krause said.

Now the cargo he pays to ship here is finished product - 150,000 Scrub Daddy pads vs. 50,000 that the foam blocks would yield after they were carved, Krause said.

"It just makes total business sense," he said. "In business, you've got to make decisions that keep the company afloat."

The local subcontractor who lost the cutting work, Foam Fair Industries, which Krause said devoted one or two employees to Scrub Daddy orders, was unavailable for comment.

Efficiencies "are sort of what trade is all about," said Mark Stehr, a professor of economics at Drexel University's LeBow College of Business.

If savings are realized from transferring the cutting work to Germany, that could be a plus for Scrub Daddy users - and for hiring around Philadelphia, Stehr said.

"If costs go down, generally that means prices can go down," he said. That should lead to more sales and the need for more packagers, Stehr said.

Packaging is done at Scrub Daddy's Delaware County headquarters, where Krause now employs 30. He said he has not given up on bringing the cutting work back to the United States. Last week, Krause visited one of the U.S. sites his German manufacturer has - in Chattanooga, Tenn. - to explore that possibility.

Meanwhile, the Scrub Daddy line is about to take on some new looks and smells in the fourth quarter. The smiling pads also will be available in pink, green, and blue, and with a lemon scent.

And in 2014, Scrub Daisy is expected to sprout. The scrubbing wand, equipped with a soap dispenser, will have a cleaning head shaped as a flower.