King of the Hill How Milton Levine transcended toy fads with his Ant Farms.
By Paul Lukas

(FORTUNE Small Business) – It figures that a success story as all-American as Milton Levine's would have its genesis on the Fourth of July. That was the date in 1956 when Levine, a novelty-toy salesman, noticed some ants crawling around during a picnic. The sight sparked a flashback to his youth, when he'd gathered ants on his uncle's farm. "I'd fill a jar with sand, put in some ants, and watch them cavort," he recalls with a chuckle. "So at the picnic I thought, Why not make a toy that would let kids watch the ants?" Within a few months he'd created the Ant Farm, which has since become an icon in the American toy market.

Levine didn't set out to become an ant entrepreneur. He served in the Army in World War II and, like many GIs, came home without a clear sense of direction. "I'd been reading Kiplinger's Letter," he says, "and it said that if you were just out of the Army, the best businesses to go into were toys or bobby pins." Levine chose toys, and in 1946 he teamed up with his brother-in-law, Joe Cossman, to form a mail-order novelty company. They did reasonably well in the business for a decade, and then Levine had his ant epiphany.

Moving into the ant biz entailed some, well, unique challenges, especially for novices like Levine and Cossman. They had to set up a two-stage sales process--customers bought the Ant Farm and then obtained the ants by mailing in an enclosed coupon--to bypass the shelf-life problems inherent in most organic products. Early Ant Farms used a glue whose fumes sometimes killed the ants. The company also had to obtain permission from each state to ship live ants (they still can't be shipped to Hawaii, where ants are deemed an infestation menace). And the original Ant Farms were filled with beach sand, which, as Levine recalls, "was fine, except it was the same color as the ants." White-ish volcanic soil was soon substituted to provide better contrast.

Ant suppliers sometimes proved to be a temperamental lot. One fellow showed up at Levine's office with a jar full of ants, began arguing over payment terms, "and then he got mad, opened the jar onto my desk, and they were all over the office," says Levine.

Despite those problems, the Ant Farm was a quick hit in the fad-crazy 1950s. But fads die out; how did the Ant Farm avoid the fate of the Hula Hoop? For starters, Levine understood the value of television exposure: He made an upscale mahogany-and-glass Ant Farm for Dick Clark, appeared on The Merv Griffin Show and The Shari Lewis Show (the latter of which featured the surreal scene of Levine discussing the finer points of ants with Lewis's puppet alter ego, Lamb Chop), and even planted his son in children's show audiences, where the hosts would notice him holding an Ant Farm and get sucked into discussing it. In addition, Levine moved the Ant Farm be- yond the toy market and into schools, where teachers have used it as an educational tool.

Levine bought out Cossman in 1965 and renamed the company Uncle Milton Industries. ("Someone said that if I've got all these ants, then I must be the uncle.") Now 89 and retired, he still keeps tabs on the suburban Los Angeles-based firm, which is run these days by his son Steven. Over the years they've sold about 20 million Ant Farms, which continue to move at the rate of approximately 30,000 per month. In addition, Uncle Milton Industries now offers more than 50 educational toys, including frog and butterfly habitats, home aquariums and planetariums, mini-greenhouses, and gyroscopes.

Nobody is more surprised by all this than Milton Levine. "I thought it would sell for maybe two years."