One quiet winter evening, while I was reading a goodnight story to my 3 years old daughter, she suddenly started kicking and screaming that she wants a chocolate egg. That took me by surprise and frustrated me, because there was no way I was going to feed her chocolate that late. But it also got me thinking.
What’s so addictive about this product that even a 3 year old can get hooked? And what makes this product so successful? I remember going crazy about these eggs myself as a child and they are still in high demand 30 years later. Subsequently I found out that people are even willing to go to jail for one.
This is a hell of a product. So it made me wonder: who is the genius behind it? was it all intended or did the success just happen by accident? What can I learn from this and apply to digital products? So I started to look more into it.
A ‘chocolate sweet’ history of success
The custom of exchanging eggs as a gift is very ancient. 5,000 years ago the Persians did it as a sign of welcome to spring, rejoicing in the renewal of nature and the festivities for fertility. Fast forward to the 1900s, the chocolate Easter egg became a tradition in Europe, when a method of making the chocolate flow into the egg shaped moulds was found.
In 1974, the Italian chocolate baron, Michele Ferrero, was seeking a means to get around the seasonal nature of Easter eggs and find a use for the manufacturing moulds that served no purpose for much of the year.
The sweet-toothed eccentric had the gift of understanding what children wanted. 'Never patronise a child' he was quoted as saying. Michele decided that children should experience the excitement that they get from Easter every day. The outcome was the Kinder Surprise, a chocolate egg containing little plastic parts of toys to be assembled by children.
Since 1974, 30 billion Kinder Surprise eggs have been sold worldwide, making this a very successful and lucrative product.
Early prototype validation
Michele identified a supermarket near Luxembourg where he claimed 'the shopper represented the average European' and those lucky consumers became the testing ground for many of his inventions. He would place unbranded products secretly at the supermarket and then visit undercover to get their opinions.
The outcomes were interesting and insightful: he found out that mothers were feeling guilty for feeding their children a product with low nutritional value, so he increased the milk content. He changed the initial recipe adding a white chocolate coating on the inside and made this a key message for his promotion, as mothers responded well to the idea of giving their children more milk. Fun fact on top: while the white chocolate layer resembles a shell, the yellow capsule inside resembles an egg’s yolk.
The surprise egg fits the case of modern product frameworks
The business model canvas
If we take a look at the key aspects of the business model canvas, the obvious customer segment is children. They cannot say no to chocolate and love toys. You combine the two into a single product and get something they cannot resist. But kids don’t have buying power. That’s where the other segment comes in.
Parents want to bring joy to their children but cannot buy expensive presents every day. Friends and close family members don’t want to visit empty handed, because it is rude and kids already expect presents from guests. A small toy wrapped in chocolate is the perfect thing to pick up on your way; it is sweet, playful and affordable.
So if we go further into this product success story, a huge factor was partnering with cartoon and toy companies. By purchasing the rights to use their already popular characters as toys, Ferrero reduced marketing costs because the product sold itself. This is probably why surprise eggs are still popular today; there’s always some new trending cartoon and there’s little cost associated with switching to a new line of toys.
The hook model
One of my favourite product books is Nir Eyal’s Hooked. His model makes addiction very easy to understand.
There are some external triggers for both children and adults. The product is put on display in stores close to the cashier where you usually wait in line, so it’s hard not to notice it, especially if you are shopping with your kids. Furthermore kids usually play together with toys, so if your kid has a toy, mine will want one as well. The internal motivation works mostly for adults; you want to offer a gift and bring joy.
The variable reward is a key aspect of the model, we need to be surprised because we get bored otherwise. Kids have no idea what’s inside and adults have no idea how the kid is going to react to the toy.
Studies have shown that dopamine, the pleasure chemical, reaches the brain not when we get the reward, but while we are anticipating it. The steps kids take in this particular process are really interesting. It is the gesture of unwrapping the aluminium foil, breaking the chocolate shell in half and opening the yellow capsule.
The whole process takes just the right amount of time and I think it is one of the involuntary effects of the manufacturing process. The aluminium foil keeps the chocolate from melting and the two halves make it easier to assemble.
Another brilliant aspect of the two halves is that parents are given the opportunity to allow their children to only eat half of the chocolate. What happens to the other half? Well, it works as a little treat for the parents themselves. And this act of sharing and enjoying food together is something that has brought humans closer since we were living in caves.
The investment part is special as well. Kids have to work to assemble the toy. This is known as the Ikea effect, a cognitive bias in which consumers place a disproportionately high value on products they partially created. The other more obvious investment is completing the collection of toys, since each egg contains only one toy from a larger collection.
Not a perfect product though
Despite the huge success worldwide, the Kinder egg is banned in the US where all candies embedded with non-nutritive objects as toys have been illegal since 1938.
In addition to that, the FDA claims the surprise toy could be a choking hazard for kids and often issues press releases reminding people that these treats "may be cute and seasonal but they are too dangerous to children to be imported legally into the U.S."
Despite warnings, this hasn't stopped people from trying to smuggle the chocolate eggs across the border. In 2011, about 60,000 Kinder eggs were confiscated at the U.S.-Canada and there have been reports of people who were detained for being in possession of the candy and who received fines of up to $1,200 per egg.
What I took away from it
Success rarely happens by accident and the surprise egg is not one of those exceptional cases. It took an entrepreneur with a vision and a good understanding of its customers. This is difficult to obtain without being a good listener and without spending time in the field.
What Michele Ferrero did intuitively in the 70’s is available to us today in the form of simple templates we can apply to our ideas and this is fantastic.
The hook model is a very powerful tool for changing behaviour and with great power comes great responsibility. But this is a delicate topic that deserves a separate article.