PEZ: Behind the Sweet Exterior

When you step in the doors of the PEZ Candy, Inc. headquarters in Orange, CT, it’s clear that President and CEO Joe Vittoria is, as he readily admits, a five- year-old kid at heart.

According to Vittoria, who joined the company in 2004, this effervescent liveliness – from the gargantuan PEZ-themed Orange County Chopper motorcycle suspended from the ceiling of the PEZ visitors’ center entryway, to the kaleidoscopic displays of everything from Yoda to President Millard Fillmore on the heads of dispensers – is quite a paradigm shift. “When I came here, the company was quiet,” Vittoria admitted.

Vittoria’s seven years with PEZ have seen a resurrection of sorts: of the brand, of the headquarters’ physical presence and of the company as a whole. The new PEZ, however – which ships more than 150 million dispensers per year globally – represents a significant move forward not only from the previous decade, but from the 85-year-old company’s roots in Vienna, Austria as a non- invasive way to help smokers kick their habits.

For PEZ’s first twenty-five years of existence, the company’s iconic dispensers bore a near-identical physical resemblance to cigarette lighters: they helped smokers quit smoking without abandoning the “cool” factor associated with carrying lighters. Rather than child-oriented candy capsules, the containers dispensed mints, providing an alternative to cigarettes.

But the brilliance lay in what seemed at the time to be a minor adjustment. When PEZ expanded to the United States in the 1953, it added the head to the existing body of the dispenser. Little to the nascent company’s knowledge, this slight modification transformed PEZ dispensers – and, by extension, the PEZ brand – into what they are today. “When one of our engineers designed that head, it just took off,” Vittoria said. “It became popular. It was no longer a smoker’s mint product; it became a child’s product. It became fun.”

Even though the company cemented its identity long before he arrived, Vittoria said he was not content with Pez’s direction when he took his position. “The brand had gone to sleep,” Vittoria pronounced. “When I joined, it was, ‘OK, you got the great brand you wanted, Joe, but, gee, it’s not so shiny.’ So all we did was buff it up.”

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Starting with the milk route he carried from age five under the watch of his next-door neighbor, Vittoria said he “always found a way to make a buck.” In high school, in addition to his classes, he worked simultaneously as a skate guard, an attendant in a shoe store and as an employee in what eventually became his own car- cleaning business.

After graduating high school, Vittoria attended Iona College in New Rochelle, NY. According to Vittoria, though, he obtained the majority of his education outside the classroom, particularly in watching those around him – in “seeing the people that did well.”

Upon graduation, Vittoria landed a job at IBM as a as a staff accountant. While the $11,000 salary was more than the young Vittoria had ever dreamed of, he was bored. “I was twenty-five layers down in a massive corporation,” he said. “To me, that was like, ‘I’m lost.’”

Always itinerant, ambitious and hard to satisfy, Vittoria moved on: first to International Minerals and Chemicals in Manhattan, then to Almet Aluminum, and finally to Henckels Cutlery. Each time he switched companies, he moved up a notch on the ladder of corporate hierarchy. But his story stayed much the same.

“I was what I considered a ‘jumper’,” he said. “But I knew I got bored quickly. Three years, I had to do something else.”
Years later, Vittoria was recruited by PricewaterhouseCoopers, which had audited several of his previous companies, to join their team as a consultant.

“I think that’s the lucky thing I’ve had more than most,” Vittoria admitted. “I’ve worked with some individuals who were accomplished, who were entrepreneurial, who had built things and created them. And I was able to spend a lot of time with them. And, in a conversation with any one of them, I think you learn something every single day.”

Finally, while at PricewaterhouseCoopers, Vittoria got a call from PEZ, which he had unsuccessfully approached about buying while with Henckels two decades earlier.

“They asked me, ‘Well, Mr. Vittoria, we’re not going to sell our company – but would you be interested in operating it for us?’”

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PEZ is all about branding. “It’s one of those brands that you just remember,” Vittoria explained. “If 85 percent, 90 percent of the population in the States doesn’t know PEZ, I’d be shocked.”

Though the brand existed when he arrived, however, it was far from where Vittoria wanted it to be. “We were portrayed as a low-end novelty that you only find in dollar stores,” Vittoria lamented.

Fortunately, branding and marketing were in Vittoria’s line of expertise. Though he was trained – both academically and in his first few jobs – in finance and accounting, he developed an affinity for manufacturing and marketing over the course of his career, making PEZ’s branding dilemma an especially intriguing puzzle for him when he became CEO. “I came in and said, ‘How do we take this brand, shine it up, clean up the business, make sure we’re ready for growth?’” Vittoria explained.

Vittoria saw Pez’s branding efforts as inextricably intertwined with developing new products that both sold well and evoked a sense of nostalgia for the customer. “If you think about PEZ, you typically think about your childhood,” he said. “And the brand is strong enough that people typically say, ‘Oh, I remember when.’”

Next on Vittoria’s list was identifying the most receptive demographic for the Pez product. The bulk of PEZ’s customer base had always been children. The logical way to get at these children, then, was through their parents. And the way to convince the parent of PEZ’s worth brought Vittoria back to the core of PEZ’s brand identity: the sense of nostalgia.

“The parent had the memory,” Vittoria said. “Parents were still, to this day, buying PEZ dispensers to give to their kids for Christmas, Halloween, Easter.”

While embracing the collector community certainly helped PEZ rediscover its identity, a reorientation of sales strategies has also boosted business. Today, licensing accounts for sixty percent of PEZ’s revenues, whereas seasonal sales used to account for seventy percent, according to Vittoria.

Meanwhile, certain collectors’ sets have of course been smashing hits. Sky- high initial sales of the Lord of the Rings collector’s set, for example, led PEZ to expand its initial production plans of 250,000 sets to 500,000.

In the spirit of creating a more vibrant company atmosphere, Vittoria also took it upon himself to revamp the Pez headquarters from the ground up, turning the existing structure into 55,000-square foot behemoth of a warehouse – twice the size of what it had previously been. PEZ’s improvements in manufacturing efficiency now allow it to produce an astounding 360 twelve-piece rolls of candy per minute.

Rekindling and maintaining distributor relationships were equally important, Vittoria said. PEZ has been a licensee with Disney since 1952. Creating and developing a relationship with Wal-Mart proved vital for the company, too.

Since Vittoria joined PEZ, though, the new product designs have been half the story. Star Wars, Major League Baseball and NCAA football helmets, and Captain Jack Sparrow, to name a few, have joined the more traditional Disney characters on Pez’s shelves.

“To describe what PEZ is today, I think it’s almost back where it should be,” Vittoria posits. “So now we’re looking at new ideas again. We’ve changed flavors. That’s nice. But the dispenser’s still the driver.”

***

Given PEZ’s entrenchment in pop culture, managing public relations is of paramount importance.

PR for PEZ comes in all forms – good and bad.

“We’ve been on RadioShack commercials,” Vittoria said. “We’ve been on Seinfeld. The Food Network came up here and did shows about PEZ.”

Vittoria’s goal with PEZ has always been to stay as apolitical as possible, although, according to Vittoria, there is often nothing the company can do to stop its products from becoming politicized.

“We don’t do political characters on purpose,” Vittoria warned. Even so, Vittoria says he has seen magnets featuring George Bush with a PEZ dispenser head.

PEZ is so intentional about staying true to its mission – to reflect positive emotions in its dispensers – that it turned down Warren Buffet when Berkshire Hathaway asked PEZ to make a figurine of its iconic chairman and CEO.

“He doesn’t have the edge,” Vittoria explained. “Meanwhile, I did the Geico lizard. Why? Because it’s more fun.”

Certainly Vittoria has improved upon some of PEZ’s specific strategies, whether in marketing, product development or elsewhere. But he cites PEZ’s trueness to its original goals as perhaps the most direct contributor to its long-term success.

“All we’re doing to this day, all kidding aside is making that product, that head,” he said. “The candy dispenser? Others have developed it. But that that head, that dispenser, that license, that character, that face – that’s what drives it.”

***

How exactly has Pez gone about doubling in size during Vittoria’s seven years?

“I’ve got to tell you: we’ve gotten lucky, and it’s all about the brand,” Vittoria said.

Though bits and pieces of its operations have changed, PEZ remains much the same as it was in the middle of the twentieth century. Its Connecticut home houses the North America operations and produces the candy, while its European headquarters produces roughly fifty percent of the dispensers, and its affiliates in China produce the other fifty percent.

Vittoria prides himself on his success in embracing the PEZ collector community – marking a distinct difference from PEZ’s past. “When I got here, if the collectors were coming around, they were pushed off the property,” he said. “If they were taking pictures, the police were called.”

Vittoria downplays his personal impact on PEZ’s success. The common thread throughout his experiences, however, seems to be willingness to engage in the communities around him – to develop his “EQ” in addition to his IQ.

Vittoria promotes this strategy for anyone. “The more you get involved in stuff, whether it’s in school or outside school, you pick up on subtleties on how people act, move, discuss – on how things work,” he said. “If you’re a classically trained student, that’s fabulous. But don’t be afraid to learn from touching and doing and feeling, not just reading.”

So Vittoria thinks he has some idea of what has led to his success. But what’s his job from here forward?

He smiles. It’s simple.

“To expand the tradition: to keep it going and to build some more history.”

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