Episode #54: The Hidden Genius of the PEZ Pivot

Grad Conn

January 13, 20219 min read

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Part character, part candy, and all collectible. It’s PEZ day on the CXM Experience as we look at the experience of their whimsical dispensers and the little candy bricks that fill them. Plus, a peek into a little-known PEZ pivot in the 1950s that ensured their ongoing success.

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Welcome, welcome, welcome. It’s the CXM Experience. And as usual, I am your host, Grad Conn CXO, chief experience officer at Sprinklr. And today we’re going to talk about PEZ. Yeah, that cultural icon called PEZ. I actually put a post on my blog, which is CopernicanShift.com. And on Copernican Shift I did a little post on PEZ, and some of the cool things that have come from PEZ. But I just want to talk a little bit about PEZ from… two things. One is the bit a bit of the history of it, and how that translates into experience and how to think about the kind of experiences that you land. The second piece is this idea of pivoting, and being able to understand how to make a business pivot when you need to

So, PEZ I think most people are familiar. But in case you’re not PEZ are little rectangular shaped candies, peppermint, and other flavor profiles and a lot of fruit flavors. They come in the little sleeves, and then you can put the sleeve into a dispenser that looks a little bit like a cigarette lighter. But on top of the dispenser, there are little shapes like faces and pumpkins, and you know, Tinkerbell and all that kind of stuff. So there are, I don’t know, 1000s and 1000s and 1000s of different PEZ out there. And it’s got a pretty interesting history.

Believe it or not, PEZ was invented as an anti smoking tool. I know. I know. It was invented to help people stop smoking, and was invented to be an eating management and smoking management tool, which I thought was super fascinating. And you know, PEZ have been in stockings for many, many years. There were some PEZ in my family’s stockings this year. And there are always lots of PEZ around the place, a really great gift item at any point in time.

So the Pez dispenser, part character, part candy, and all collectible, and it was invented by Austrian confectioner Eduard Haas the third, and he actually invented it to corner this anti smoking market. So he actually inherited a successful baking business from his dad. And so he had chemists and a factory that could produce materials like baking powder, they actually made pre mixed cake mixes. So that was back in the turn of the century. And he was an anti smoking advocate. So he wanted to create a tablet that would not only refresh one’s breath, but could also help consumers who are anxious to cut down on smoking or overeating. And this is from a book called PEZ from Austrian Invention to American Icon written by Sean Peterson, who’s the company historian at PEZ candy.

And so, peppermint flavoring was the original flavor for PEZ. But because peppermint oil is really expensive, and generally when you make something out of peppermint oil, you boil it, which is typically how candy is made… a hot mixture, you lose actually a lot of the peppermint taste. And you lose a lot of peppermint oil, so you have to use a lot of it, and it’s quite expensive. And so the Haas company chemists invented a special manufacturing process. This is kind of step one, and what makes PEZ cool. And so PEZ tablets are made by compressing confectionery sugar, which is that very fine sugar, and the flavoring in a cold process. And they use 1000s of pounds of force until the brick of confectionery sugar and peppermint flavoring holds together. And they were originally packaged with metal tins and foil wrapping. So that’s kind of how they started some great history on how they were distributed. There’s pictures of PEZ branded trucks and people in PEZ uniforms handing out PEZ and slogans like Already Pezzing.

And it’s interesting when you look at these older pictures, the logo is identical to the logo that we see today. So the logo’s remain unchanged over the course of a century. And over time, it picked up in popularity and more and more factories got converted from making baking powder to PEZ and after about 20 years, the first Pez dispensers were invented. In fact, the first Pez dispensers were sold at the Vienna trade fair in 1949. And the US patent was granted in 1952. And they looked a lot like a cigarette lighter, but they’re also built to conform to the tablets And the tablet shape was pretty much pre determined by the factory that was that was making them.

So that was all great, right? So they come to America, and things didn’t go as well. So here’s the pivot story. So people really weren’t that interested in not smoking in America in the 1950s. And so they are like, well, what are we going to do here? And they pivoted. The pivot was to go away from peppermint and go to fruit flavors. And the second thing was to start to introduce character shaped dispensers. The first one was a robot and a Santa Claus. And Santa Claus is still PEZ’s best Selling design. So now the first ones were full body, but they eventually went to the shape we know and love today, which is the square body that holds the candy and then a head on top.

And so this essentially pivot from an adult smoke prevention tool to a child’s candy. That’s a pretty significant pivot. But that’s what secured PEZ’s long term position in the cultural consciousness and the they struck gold in 1958 when they signed their first licensing deal. The first licensing deal was Popeye, Popeye very popular in the late 50s. And that was their first deal. And then off they went, right? So they do Star Wars now and they’ve got Muppets, and you name it, they’ve licensed everything. And so the combination of licensing and original designs, allowed them to finally actually build a factory in the US. So there’s a PEZ candy factory in Orange, Connecticut. Today, it manufactures 12 million tablets a day, five days a week. And it’s got a really awesome visitor center with the biggest collection of Pez dispensers in the world. So you can check out all your favorite PEZ designs.

The cool thing is Haas actually lived a long time — he didn’t die until 1986. So he lived to see global success and icon status for PEZ. And the first convention was in 1991. The unfortunate thing is he did die a little bit before another very interesting thing about PEZ dispensers, which is, that’s why eBay started. And that cool. So eBay, was originally put together to allow PEZ collectors… and so this PEZ collecting industry kind of sprung up in the late 80s, early 90s… to allow PEZ collectors to exchange PEZ designs. That’s how eBay got started. So think about that. You know, PEZ starts as an anti smoking tool, invented in Austria, back in the 1930s. And then here we are, with eBay and everything else that’s happened in that realm, also inspired by PEZ. I just think that’s a really cool story.

Now, the interesting thing for me about experiences, you never really know where people are going to go with your product. And so what you have to be able to do is you have to use a combination of imagination, and customer connection, to always be nimble enough. And what they were able to understand is that the experience that PEZ delivered, wasn’t really just the taste. In fact, you know, initially, they were all about the taste, they didn’t even have dispensers. What PEZ became is it became part of an experience that was not just eating the candy, but loading the candy, loading the candie’s like half the fun, the idea that you can dispense it with one hand, but also the idea of having this fun connection to a character. A character that you like, or something that you like to do. And I think that’s a very interesting pivot.

We have another very large customer, also, ironically, based in Austria, but we have another large customer right now who went on our content marketing platform at Sprinklr. And it was very interesting how their journey went. Same kind of idea, which is they started in one spot, and they’re going to another spot, and they started in the spot of, Hey, you know, we need to reduce costs. You know, we’re tired of making millionaires out of content production companies. And so what we need to do is we need to figure out how to centralize our content, so that we can get more scale efficiencies. And that’s happened, right? They’ve saved millions and millions and millions of dollars. There’s a really good presentation from DMEXCO on this. And that’s been a great story. But the cool story is the actual thing that’s really benefiting them is that by having centralized production and having a central way of looking at content, they’re also able to see what’s most effective. And by being able to see what’s most effective, they’re able to take the biggest ideas and the best ideas from around the world and share them broadly. So not only are they saving money on content production, but they’re actually increasing their effectiveness radically by being able to borrow the very best content, the very best ideas from around the world. And that’s another kind of pivot as they go down. They build experiences for the customers of content.

So there we go, little short history of PEZ, a little short history of eBay, and a little short history of another great Sprinklr customer. And that’s what we’re gonna finish talking about today. It’s been really fun. I’m gonna go play with some of my PEZ right now, I’m inspired. So for the CXM Experience, I’m Grad Conn, and I’ll see you next time.

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