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// PUBLIC GAMING INTERNATIONAL // November/December 2015
distributed. That’s the brilliance of it—one minor change opened
the door to reinventing the entire category. It changed carrots
from being a vegetable to being a healthy alternative to snack
food like candy. You can’t transform carrots any more than you
can transform the fundamental game logic of random-number
generation. We can, though, embrace who we are, appreciate the
beauty of our products in fresh new ways, reinforce the connec-
tion that Lottery has with its huge customer base, and inspire in
our customers the love they’ve always had for Lottery.
Lesson Number One: A new product
experience can drive category growth
In 1986, the average consumption of carrots per person in
the US was 6 pounds. Carrots were mainly distributed through
grocery stores. The stores would require them to have a certain
size and look, which led to farmers facing tremendous waste,
and having carrots they couldn’t sell. And even once your carrots
made it to the store, convincing people to eat them was another
matter entirely—they had to be washed, peeled, and then cut
or grated.
Because of these restrictions, some farmers, like Mike Yorusek
from Bakersfield California, had to discard up to 400 tons of car-
rots every year. Not surprisingly, Mike wasn’t happy. Legend has it
that he was feeding so many of the rejected carrots to his pigs that
his bacon turned orange. So, he decided to do something about
it. He started experimenting.
He didn’t get it right the first time, though. His first attempt,
which he called “bunny balls,” didn’t lead to the hoped-for suc-
cess. His second attempt, though? That second attempt led to the
“baby carrots” we now all know and love. The local grocery stores
which Mike used to test his ideas went crazy over this new way
to sell carrots.
So what happened? Why did this “simple” change in shape and
form lead to this radical category growth? We believe there are
several reasons that explain this success.
Convenience as a benefit:
Obviously, baby carrots provide a
clear convenience benefit over regular carrots. There is no need to
wash, peel and cut the carrots any longer. They can be consumed
as is without any extra effort. But convenience alone can’t explain
the whole story.
From vegetable to snack:
Instead, we believe that the real
power of baby carrots was in their ability to re-frame the whole
category in consumers’ minds. All of the sudden, baby carrots
weren’t seen as a vegetable primarily served as a side dish. It wasn’t
just “produce.” Instead, they were being perceived as a healthy
and convenient snack!
New usage occasions:
Re-positioning baby carrots as a snack
opened up completely new usage and consumption occasions
and market opportunities and invited a whole new range of con-
sumers into the category, something the lottery is trying to do
as well. Moms could put them in their kids’ lunch boxes, they
could be served as party snack (I suspect they also contributed to
the growth of ranch dressing consumption), they could be kept
in a handbag and eaten on the go (or at work) as a fun snacking
alternative. Suddenly, people had many more reasons to buy- and
they took advantage of these increased opportunities!
New distribution opportunities:
This new product format
also led to new distribution opportunities—suddenly, conve-
nience stores and gas stations were interested—places that nev-
er had a “produce” section, and still don’t! This simple product
change increased the reach and buying touch-points of the whole
category. And the lottery category knows all too well that an in-
crease in distribution will impact sales.
Would that work in the lottery industry?
Right around now, you might hear yourself saying “this is en-
tertaining and interesting Ulli, but how do these learnings apply
to the lottery industry? How do we change the product/player
experience of the lottery products to drive renewed consumer
interest and create new growth opportunities?” We at First-The-
Trousers asked ourselves the same questions. So, we decided to
test this hypothesis in the scratch-off segment. We had a designer
mock up 5 different product ideas (all containing a scratch-off
element) and tested them quantitatively.
Previous research had shown us that consumers play the vari-
ous lottery products for a variety of reasons as they try to satisfy
a variety of need states. We had also hypothesized that because
of their mechanisms of play and appearance consumers tended
to lump all the existing scratch-off games into the same “mental
bucket.” And, our prior research showed that the current prod-
ucts were only good at satisfying and delivering against half the
relevant players needs in the category. In other words, the cur-
rent products offered in the category did not manage to deliver
against many of the relevant reasons people played the lottery.
Suddenly, when you realize that only 50% of player need-states
are being met, 180% growth doesn’t seem that unrealistic. The
learnings we found held true for scratch-off games and draw
games and across jurisdictions.