Squishmallow cereal is the latest conquest in the brand’s global takeover

I swear that I can smell the sweet scent of marshmallows through the cardboard. And by the time my family is filling its bowls with corn flour Os and pastel-colored marshmallow “Cam” cats, the sugary odor is so rich it feels as if might be standing in a rice krispies treat factory.

“This is in my top five,” my son, a connoisseur of sweet cereals, quickly declares. 

“[But] the marshmallows aren’t squishy!” my daughter notes.

This is Squishmallow cereal, the newest product from Kellogg’s. On retail shelves through mid-2025, the limited edition cereal is both a vanilla-scented dream, and the latest manifestation of the billion dollar, eminently squeezable stuffies beloved by kids and 20-something collectors alike. 

Squishmallow wants to be more Hello Kitty, less Funko Pop

When a friend first gifted my children a pair of the egg-shaped animals a few years ago, I looked upon them with a sort of horror. What were these armless things sold at a drugstore? But the inanimate objects have managed to breed inside my home since. With a unique, I can only call it squishy feel, they’re a far cry from the typical stuffed animal. And as a result, they’re not just plush buddies, but addictively comforting huggables one moment and backrests for reading a book the next. When a fellow parent admitted to me that a Squishmallow makes a good pillow when they crash in their child’s room, I immediately feel the sensation of my daughter’s favorite axolotl under my cheek.

First launched in 2017 by Kelly Toys, today, you’ll find over 3,000 Squishmallow characters on the market, in an operation acquired by Jazwares in 2019 that reached $1 billion in revenue in 2023. Owned as part of Warren Buffet’s Berkshire Hathaway (and yes, Buffet has been immortalized as his own highly collectible Squishmallow), Jazwares oversees toys for powerhouse brands including Hello Kitty, Star Wars, and Pokèmon. While the vast majority of Squishmallow revenue is still generated by the direct sales of its stuffies, the company has been deliberately expanding its licensing business in an effort to stretch the brand even further—without, hopefully, bursting its squishy bubble.

“[If you look at] Funko, they’re a license-driven, stylized collectible. We are a narrative-based brand that additionally has licenses,” says Gerhard Runken, SVP of brand at Jazwares. That difference, while it may sound like marketing speak, is core to how the company prioritizes partnerships plans to expand its brand.

Squishmallows are bespoke characters first, and a stylistic vessel for licensing second. And the company is seizing its popularity in hopes of not simply cashing in on the short term, but building Squishmallow into a classic property akin to a Hello Kitty. “We want to be the next iconic brand that people are  talking about 10 years from now,” says Runken. So it’s prioritizing partnerships with companies like Crocs, Hasbro, and Ulta, built with strict, high touch brand standards that protect the pastel plush toys.

“For us, Kellogg’s is one of the upper echelon partnerships,” says Runken.  “And you know, it’s kind of funny. ‘Squishmallow,’ it kind of sounds like a cereal, right? It’s kind of like a no-brainer for us to develop a cereal with them.”

Even if, ultimately, Kellogg’s had to use crunchy, dehydrated marshmallows for the job.

Designing the first Squishmallow

Sunny Cho grew up as a girl in South Korea believing that her stuffed animals were alive. Decades later, she’d move to the U.S., give up on computer science, and land as a designer at Kelly Toys. 

On one fateful day, her supervisor dropped a unique swatch of fabric onto her desk. Unlike the high pile fur of a teddy bear, it was smooth and stretchy. Cho’s mind immediately conjured the clean lines, small eyes, and rounded geometries of Kawaii style characters from Japan.

“I loved Kawaii style, but because we [worked in] the U.S. market, I wanted to incorporate American style into it,” says Cho. After countless sketches and color explorations, they found a balance of Japan’s love for pastels and America’s preference for bold colors. “And we came up with the egg shape, then added a belly to it,” she continues. “We thought about adding arms or legs, but no.”

With the help of a manufacturer, the stretchy fabric found its perfect complement in compressible foam, and the first Squishmallow was born (the aforementioned cat named Cam). That year, when Cho’s supervisor previewed the first Squishmallow designs with retailers, the writing was already on the wall. 

“She knew that, oh, it’s going to get big!” Cho recounts. “I was really excited, and had so much fun when drawing, but I didn’t expect that it was going to be this big.”

Today, Cho oversees the Squishmallow design department. While she never foresaw the animals doubling as ergonomic companions—what I’d argue is the sleeper reason why children cherish them long-term—she did imagine the essence being sheer comfort.

“I want them to feel warm,” says Cho, “that you feel happiness just by looking at them.” 

No doubt, that comforting warmth propelled Squishmallow’s explosive growth during the COVID-19 pandemic in 2020, and it is now embodied by a sometimes ruthless business. Cho is always on the hunt for new species to Squishmallow-fy, and describes that discovery as one of the true joys of the job. Meanwhile, analysts follow the latest animal trends across social media, and Squishmallows proving less popular will quickly be put on ice for new ones. Copyeditors fill in a name and backstory for each new character in the 3,000 and counting Squishmallow lineup.

What the company will attest is that Squishmallows are unique, because they have strong collectibility among both children and people ages 18 to 24. Characters may follow trends, but they aren’t developed for demographics. For Squishmallow, cute is cute. 

However, a shrewd retail strategy drives collectibility. Prioritizing physical stores, fans never know what Squishmallows will appear where next. That means your casual Squishmallow fan always sees different options wherever they go, making them fun to seek out. And for more serious collectors, Squishmallows are tagged by levels of rarity. While companies like Target and Walmart have each commissioned custom Squishmallows, the appeal is often in the hunt of what could be where. A rarer character could show up at any Walgreens or Five Below at any time, and TikTokers amassing 13 billion views to date film the thrill of the hunt with glee.

“Sharing is a huge part of the brand,” says Runken. “Whether it’s social sharing, taking it to friends’ houses, traveling with it—whether you’re in a car or on an airplane—you’re probably going to see a Squishmallow.”

How much squish is too much mallow?

Since launching its outbound licensing business in 2022, Squishmallow has enlisted more than 100 licensees to make Squishmallow-related products, which now represent 15% of the brand’s revenue. The core of the business is still about producing stuffies, but Jazwares hopes that licensing can expand its audience through irresistible collabs. 

“There’s a ton of categories we want to, you know, have more depth and breadth in confectionery, food, cosmetics, beauty, things like that. But again, that takes time if you don’t want to label slap—basically putting a ‘Squishmallow’ on the wrapper and calling it a day.” says Runken.  “And that’s just not what we’re to do. We’re looking at, how do we customize it?”

The company is also trying to saturate, but not oversaturate. And one key rule along those lines is that they will continue to invest in their 3000+ individual characters like mascots—Jazwares wants to avoid having more than one partner in any given category using the same character. So you won’t see Archie the Axolotl on dozens of different beauty products or confectionaries. That allows each Archie appearance to feel more special. 

In the long term, Squishmallow will face an onslaught of competitors—it’s filed dozens of lawsuits against competitors including Build-a-Bear, as similar squishy stuffies are now commonplace. Children’s toys come and go, while collectibles are an equally fickle market. Whether Squishmallow becomes more like Pokémon, or more like Beanie Babies, will become one of the most significant consumer goods case studies of our time.

“I know it sounds cheesy, but this is a once in a lifetime thing—at least, I know it’s going to be for my career,” says Runken. “For us to service it, for us to protect it, always be fan-first and to show the [community our] appreciation, I think, is also rare.”