tags: lunchtalk, innovation, creativity, growth
Howard's about this high, and he's round, and he's in his 60s, and he has big huge glasses and thinning grey hair, and he has a kind of wonderful exuberance and vitality, and he has a parrot, and he loves the opera, and he's a great aficionado of medieval history. And by profession, he's a psychophysicist. Now, I should tell you that I have no idea what psychophysics is, although at some point in my life, I dated a girl for two years who was getting her doctorate in psychophysics. Which should tell you something about that relationship. (Laughter)
As far as I know, psychophysics is about measuring things. And Howard is very interested in measuring things. And he graduated with his doctorate from Harvard, and he set up a little consulting shop in White Plains, New York. And one of his first clients was -- this is many years ago, back in the early '70s -- one of his first clients was Pepsi. And Pepsi came to Howard and they said, "You know, there's this new thing called aspartame, and we would like to make Diet Pepsi. We'd like you to figure out how much aspartame we should put in each can of Diet Pepsi, in order to have the perfect drink." Right? Now that sounds like an incredibly straightforward question to answer, and that's what Howard thought. Because Pepsi told him, "Look, we're working with a band between eight and 12 percent. Anything below eight percent sweetness is not sweet enough; anything above 12 percent sweetness is too sweet. We want to know: what's the sweet spot between eight and 12?" Now, if I gave you this problem to do, you would all say, it's very simple. What we do is you make up a big experimental batch of Pepsi, at every degree of sweetness -- eight percent, 8.1, 8.2, 8.3, all the way up to 12 -- and we try this out with thousands of people, and we plot the results on a curve, and we take the most popular concentration. Right? Really simple.
Howard does the experiment, and he gets the data back, and he plots it on a curve, and all of a sudden he realizes it's not a nice bell curve. In fact, the data doesn't make any sense. It's a mess. It's all over the place. Now, most people in that business, in the world of testing food and such, are not dismayed when the data comes back a mess. They think, well, you know, figuring out what people think about cola's not that easy. You know, maybe we made an error somewhere along the way. You know, let's just make an educated guess, and they simply point and they go for 10 percent, right in the middle. Howard is not so easily placated. Howard is a man of a certain degree of intellectual standards. And this was not good enough for him, and this question bedeviled him for years. And he would think it through and say, what was wrong? Why could we not make sense of this experiment with Diet Pepsi?
And one day, he was sitting in a diner in White Plains, about to go trying to dream up some work for Nescafe. And suddenly, like a bolt of lightning, the answer came to him. And that is, that when they analyzed the Diet Pepsi data, they were asking the wrong question. They were looking for the perfect Pepsi, and they should have been looking for the perfect Pepsis. Trust me. This was an enormous revelation. This was one of the most brilliant breakthroughs in all of food science. And Howard immediately went on the road, and he would go to conferences around the country, and he would stand up and he would say, "You had been looking for the perfect Pepsi. You're wrong. You should be looking for the perfect Pepsis." And people would look at him with a blank look, and they would say, "What are you talking about? This is craziness." And they would say, you know, "Move! Next!" Tried to get business, nobody would hire him -- he was obsessed, though, and he talked about it and talked about it and talked about it. Howard loves the Yiddish expression "To a worm in horseradish, the world is horseradish." This was his horseradish. (Laughter) He was obsessed with it!
And finally, he had a breakthrough. Vlasic Pickles came to him, and they said, "Mr. Moskowitz -- Doctor Moskowitz -- we want to make the perfect pickle." And he said, "There is no perfect pickle; there are only perfect pickles." And he came back to them and he said, "You don't just need to improve your regular; you need to create zesty." And that's where we got zesty pickles. Then the next person came to him, and that was Campbell's Soup. And this was even more important. In fact, Campbell's Soup is where Howard made his reputation. Campbell's made Prego, and Prego, in the early '80s, was struggling next to Ragu, which was the dominant spaghetti sauce of the '70s and '80s. Now in the industry -- I don't know whether you care about this, or how much time I have to go into this. But it was, technically speaking -- this is an aside -- Prego is a better tomato sauce than Ragu. The quality of the tomato paste is much better; the spice mix is far superior; it adheres to the pasta in a much more pleasing way. In fact, they would do the famous bowl test back in the '70s with Ragu and Prego. You'd have a plate of spaghetti, and you would pour it on, right? And the Ragu would all go to the bottom, and the Prego would sit on top. That's called "adherence." And, anyway, despite the fact that they were far superior in adherence, and the quality of their tomato paste, Prego was struggling.
So they came to Howard, and they said, fix us. And Howard looked at their product line, and he said, what you have is a dead tomato society. So he said, this is what I want to do. And he got together with the Campbell's soup kitchen, and he made 45 varieties of spaghetti sauce. And he varied them according to every conceivable way that you can vary tomato sauce: by sweetness, by level of garlic, by tartness, by sourness, by tomatoey-ness, by visible solids -- my favorite term in the spaghetti sauce business. (Laughter) Every conceivable way you can vary spaghetti sauce, he varied spaghetti sauce. And then he took this whole raft of 45 spaghetti sauces, and he went on the road. He went to New York; he went to Chicago; he went to Jacksonville; he went to Los Angeles. And he brought in people by the truckload. Into big halls. And he sat them down for two hours, and he gave them, over the course of that two hours, ten bowls. Ten small bowls of pasta, with a different spaghetti sauce on each one. And after they ate each bowl, they had to rate, from 0 to 100, how good they thought the spaghetti sauce was.
At the end of that process, after doing it for months and months, he had a mountain of data about how the American people feel about spaghetti sauce. And then he analyzed the data. Now, did he look for the most popular brand variety of spaghetti sauce? No! Howard doesn't believe that there is such a thing. Instead, he looked at the data, and he said, let's see if we can group all these different data points into clusters. Let's see if they congregate around certain ideas. And sure enough, if you sit down, and you analyze all this data on spaghetti sauce, you realize that all Americans fall into one of three groups. There are people who like their spaghetti sauce plain; there are people who like their spaghetti sauce spicy; and there are people who like it extra chunky.
And of those three facts, the third one was the most significant, because at the time, in the early 1980s, if you went to a supermarket, you would not find extra-chunky spaghetti sauce. And Prego turned to Howard, and they said, "You telling me that one third of Americans crave extra-chunky spaghetti sauce and yet no one is servicing their needs?" And he said yes! (Laughter) And Prego then went back, and completely reformulated their spaghetti sauce, and came out with a line of extra chunky that immediately and completely took over the spaghetti sauce business in this country. And over the next 10 years, they made 600 million dollars off their line of extra-chunky sauces.
And everyone else in the industry looked at what Howard had done, and they said, "Oh my god! We've been thinking all wrong!" And that's when you started to get seven different kinds of vinegar, and 14 different kinds of mustard, and 71 different kinds of olive oil -- and then eventually even Ragu hired Howard, and Howard did the exact same thing for Ragu that he did for Prego. And today, if you go to the supermarket, a really good one, and you look at how many Ragus there are -- do you know how many they are? 36! In six varieties: Cheese, Light, Robusto, Rich & Hearty, Old World Traditional, Extra-Chunky Garden. (Laughter) That's Howard's doing. That is Howard's gift to the American people.
Now why is that important? It is, in fact, enormously important. I'll explain to you why. What Howard did is he fundamentally changed the way the food industry thinks about making you happy. Assumption number one in the food industry used to be that the way to find out what people want to eat -- what will make people happy -- is to ask them. And for years and years and years and years, Ragu and Prego would have focus groups, and they would sit all you people down, and they would say, "What do you want in a spaghetti sauce? Tell us what you want in a spaghetti sauce." And for all those years -- 20, 30 years -- through all those focus group sessions, no one ever said they wanted extra-chunky. Even though at least a third of them, deep in their hearts, actually did. (Laughter)
People don't know what they want! Right? As Howard loves to say, "The mind knows not what the tongue wants." It's a mystery! And a critically important step in understanding our own desires and tastes is to realize that we cannot always explain what we want deep down. If I asked all of you, for example, in this room, what you want in a coffee, you know what you'd say? Every one of you would say, "I want a dark, rich, hearty roast." It's what people always say when you ask them what they want in a coffee. What do you like? Dark, rich, hearty roast! What percentage of you actually like a dark, rich, hearty roast? According to Howard, somewhere between 25 and 27 percent of you. Most of you like milky, weak coffee. But you will never, ever say to someone who asks you what you want that "I want a milky, weak coffee." (Laughter)
So that's number one thing that Howard did. Number two thing that Howard did is he made us realize -- it's another very critical point -- he made us realize in the importance of what he likes to call "horizontal segmentation." Why is this critical? It's critical because this is the way the food industry thought before Howard. Right? What were they obsessed with in the early '80s? They were obsessed with mustard. In particular, they were obsessed with the story of Grey Poupon. Right? Used to be, there were two mustards. French's and Gulden's. What were they? Yellow mustard. What's in yellow mustard? Yellow mustard seeds, turmeric, and paprika. That was mustard. Grey Poupon came along, with a Dijon. Right? Much more volatile brown mustard seed, some white wine, a nose hit, much more delicate aromatics. And what do they do? They put it in a little tiny glass jar, with a wonderful enameled label on it, made it look French, even though it's made in Oxnard, California. And instead of charging a dollar-fifty for the eight-ounce bottle, the way that French's and Gulden's did, they decided to charge four dollars. And then they had those ads, right? With the guy in the Rolls Royce, and he's eating the Grey Poupon. The other Rolls Royce pulls up, and he says, do you have any Grey Poupon? And the whole thing, after they did that, Grey Poupon takes off! Takes over the mustard business!
And everyone's take-home lesson from that was that the way to get to make people happy is to give them something that is more expensive, something to aspire to. Right? It's to make them turn their back on what they think they like now, and reach out for something higher up the mustard hierarchy. A better mustard! A more expensive mustard! A mustard of more sophistication and culture and meaning. And Howard looked to that and said, that's wrong! Mustard does not exist on a hierarchy. Mustard exists, just like tomato sauce, on a horizontal plane. There is no good mustard or bad mustard. There is no perfect mustard or imperfect mustard. There are only different kinds of mustards that suit different kinds of people. He fundamentally democratized the way we think about taste. And for that, as well, we owe Howard Moskowitz a huge vote of thanks.
Third thing that Howard did, and perhaps the most important, is Howard confronted the notion of the Platonic dish. (Laughter) What do I mean by that? For the longest time in the food industry, there was a sense that there was one way, a perfect way, to make a dish. You go to Chez Panisse, they give you the red-tail sashimi with roasted pumpkin seeds in a something something reduction. They don't give you five options on the reduction, right? They don't say, do you want the extra-chunky reduction, or do you want the -- no! You just get the reduction. Why? Because the chef at Chez Panisse has a Platonic notion about red-tail sashimi. This is the way it ought to be. And she serves it that way time and time again, and if you quarrel with her, she will say, "You know what? You're wrong! This is the best way it ought to be in this restaurant."
Now that same idea fueled the commercial food industry as well. They had a notion, a Platonic notion, of what tomato sauce was. And where did that come from? It came from Italy. Italian tomato sauce is what? It's blended; it's thin. The culture of tomato sauce was thin. When we talked about authentic tomato sauce in the 1970s, we talked about Italian tomato sauce. We talked about the earliest ragus, which had no visible solids, right? Which were thin, and you just put a little bit over it and it sunk down to the bottom of the pasta. That's what it was. And why were we attached to that? Because we thought that what it took to make people happy was to provide them with the most culturally authentic tomato sauce, A; and B, we thought that if we gave them the culturally authentic tomato sauce, then they would embrace it. And that's what would please the maximum number of people.
And the reason we thought that -- in other words, people in the cooking world were looking for cooking universals. They were looking for one way to treat all of us. And it's good reason for them to be obsessed with the idea of universals, because all of science, through the 19th century and much of the 20th, was obsessed with universals. Psychologists, medical scientists, economists were all interested in finding out the rules that govern the way all of us behave. But that changed, right? What is the great revolution in science of the last 10, 15 years? It is the movement from the search for universals to the understanding of variability. Now in medical science, we don't want to know how necessarily -- just how cancer works, we want to know how your cancer is different from my cancer. I guess my cancer different from your cancer. Genetics has opened the door to the study of human variability. What Howard Moskowitz was doing was saying, this same revolution needs to happen in the world of tomato sauce. And for that, we owe him a great vote of thanks.
I'll give you one last illustration of variability, and that is -- oh, I'm sorry. Howard not only believed that, but he took it a second step, which was to say that when we pursue universal principles in food, we aren't just making an error; we are actually doing ourselves a massive disservice. And the example he used was coffee. And coffee is something he did a lot of work with, with Nescafe. If I were to ask all of you to try and come up with a brand of coffee -- a type of coffee, a brew -- that made all of you happy, and then I asked you to rate that coffee, the average score in this room for coffee would be about 60 on a scale of 0 to 100. If, however, you allowed me to break you into coffee clusters, maybe three or four coffee clusters, and I could make coffee just for each of those individual clusters, your scores would go from 60 to 75 or 78. The difference between coffee at 60 and coffee at 78 is a difference between coffee that makes you wince, and coffee that makes you deliriously happy.
That is the final, and I think most beautiful lesson, of Howard Moskowitz: that in embracing the diversity of human beings, we will find a surer way to true happiness. Thank you.