By Llyod Ellison
Matzo (Matzah, Matza) is an unleavened bread that is eaten during Passover. For anyone who is Jewish, this is the only bread you will eat for a week (sundown on April 10th to sundown of the 13th). An important thing to note is that no other holiday requires this to be eaten. Now if you make a product that is only consumed one week out of the year, how do you survive and thrive? There is one thing going for these companies; barriers to entry. The Matzo market may be the hardest food market to enter. Matzo is one of the most heavily regulated food items on the face of the earth. The regulation is not done by any government, but by Rabbi’s. Rabbi’s are religious leaders who work for the Orthodox Union, which is the union that decides what is kosher and what is not (NPR). The rabbis that work at these plants have offices there and are consultants to any changes made in the production line. One of the most important things about Matzo is that it does not rise. Dough rises after about 18 minutes, which means a Matzo production line needs to include mechanics that can mix, knead, flatten, and get into the oven in only 18 minutes. Every single time it goes over 18 minutes, it has to be thrown out (NYT). Employees that works on the manufacturing line have to be well versed in kosher rules. Most of these employees are not Jewish, and even if they are all employees have to be properly trained. This means the cost of labor is also expensive because the employees need to be paid more for training which results in them being harder to replace.
Do these companies make money? The answer is sometimes. One company, Streit’s, has maintained a small profit margin since it originally opened. Two years ago they had to move out of New York City because of real estate costs; additionally the ovens had aged past repair (BI). On the other end of the spectrum is Manischewitz. Manischewitz has started selling small Matzo crackers that are flavored. Manischewitz is not targeting Jewish people here, but are targetting the other 98% of Americans who are not Jewish. As it turns out roughly 60% of people who buy kosher foods say the number one reason is the belief that it is high quality. The second highest reason to buying kosher food was “general healthiness” which brought in 51%, and third was food safety at 34%. Only 14% said religious laws were the main reason they bought Kosher food (Mintel). People believe that kosher is of high quality, and Manischewitz is making products that can ride the wave of natural and non-GMO foods. Manischewitz is also banking that big companies won’t be able to enter their market because for many kosher producers, it is way too hard to make. Matzo of course is not the only good that is bought primarily one time of the year. It is just one of many products, like Christmas trees, Fireworks, Cadbury eggs, and many others. Nonetheless Matzo is a great example of how hard it is to succeed with that type of specialized business.