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$130 million worth of matzo is sold each year.


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Adam Davidson, co-founder of NPR's "Planet Money," writes about the matzo economy:

I wondered, as both an economics reporter and a Jew, whether it was good to sell something that about 2 percent of the U.S. population has to buy for one week a year but isn’t all that popular at any other time or with any other group?

According to the marketing firm Lubicom, around $130 million worth of matzo is sold each year. During Passover, about 20 percent of it is sold by Streit’s. Most manufacturers would love to take in around $17 million for a single holiday without needing to invest in new equipment. But Yagoda says it’s not so easy. Sales are stable, but flour and labor costs continue to rise, and operating a manufacturing business in Lower Manhattan is logistically complicated.

Manischewitz, which controls about 40 percent of the Passover matzo market, has nearly the exact opposite strategy... Bensabat and Bankier thought, matzo is a nonfat, additive-free, vegan, low-carb bread substitute! Just as significant, kosher food was suddenly becoming popular among non-Jews for the first time in a few thousand years. A survey by Mintel, the market-research company, confirms that two-thirds of people choose kosher products because they believe (not always correctly) that they are made with high-quality ingredients. More than 50 percent (totally incorrectly) buy it for health reasons. Manischewitz strategically redesigned its boxes, adding green labels toting the healthful qualities, and created dozens of new products, like organic matzo (which tastes exactly like regular matzo), sesame-seed matzo crackers (which are completely addictive, actually) and matzo-meal red-velvet cake mix (crumbly, but surprisingly tasty).

I was missing Manischewitz’s major competitive advantage — barrier to entry. In other words, it’s really hard and expensive to make matzo that follows kosher law. In 2009, Manischewitz opened its brand-new manufacturing line, which produces 30 tons of matzo a day and is around two city blocks long. The main machine was designed by a team of engineers who worked with a rabbi, who added complications raised by various Talmudic interpretations. One rule states that the matzo dough needs to be in an oven within 18 minutes of mixing. Another excludes all the additives that allow bread machines to run quickly. A few times a week, something slows the machinery down enough that one of the five supervising rabbinical law experts insists on a thorough cleaning to eliminate any potentially leavened dough.

Brilliant.

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