News Headlines

KosherToday Update - May 5, 2008

From the Editor…

Israel is celebrating its 60th anniversary this week but here in the U.S., some retailers did not make it in time while others do not even mention the anniversary although many are taking advantage of the merchandising opportunity...The post-Passover period has ushered in sharply higher food prices for Israelis...The Forward keeps up the anti-Agri bashing by naming the PETA 'undercover' couple that shot the famous video...A record 1 million people visited Jerusalem during Passover... Sara Cohen finds that the economy and higher food prices are having an affect on the kosher catering business...Kosher consumers get reassurances from a new yellow label...A successful kosher restaurateur finds that New York is hard to emulate...In My Sixth Sense column, I discuss the new kosher kitchen that China is opening for the Olympics and the controversy over Tibet...Eda Kram has a new interesting product from Jelly Belly.

Menachem Lubinsky
Editor-in-Chief, KosherToday

Kosher Food Industry News

Feature: Customers Begin to Tone Down Menus, Kosher Caterers Say

New York...By Sara Cohen...While higher food prices are pummeling kosher (and other) consumers at retail stores, there are signs that the economy is having an effect on foodservice as well. In interviews with kosher caterers, for example, some are already noticing spending changes by customers. Food USA, which monitors average food basket prices, estimated a $14 increase in the past year due to the expanding U.S. ethanol market. Economists forecast that the retail food prices are likely to get worse. Consumers have noticed the surge in prices of commodities like rice, flour, oil and more. With higher feed costs, retail prices for eggs, dairy and meat products have gone up as well. Kosher consumers and businesses have felt the pinch of the price increases in recent months. One Brooklyn consumer told KosherToday that the price of a five pound bag of flour has skyrocketed in the store she shops at to $4.89. The kosher caterers say that they have begun noticing changes in their business. This was confirmed by Michael Schick of Schicks Catering, who says that the higher prices are definitely affecting business. He noted that prices have changed and that consumers are spending less.

Jeffrey Becker, president of Foremost Catering, has not noticed any major change in his business but has noticed a change in consumer behavior. 'While kosher consumers continue to spend money on catering for special occasions, they are also not able to buy as much with the same amount of money,' said Mr. Becker. 'This is a question of global economy. People are thinking twice about how to spend their money.' Becker explained that while consumers continue to plan occasions such as weddings, Bar/Bat Mitzvahs and other catered events, there is an increasing trend to opt for less expensive options. The price increases did not have an effect on the many people who vacationed at hotels this Passover, but price increases loom in Israel's hotel industry. One hotel industry official said, 'The price rises began last year, but the real surge has been in the past two to three months. Prices for some products have risen 40% in just one month.' The official was Shmulik Shai, Vice President of Development and Operations for Africa-Israel Hotels which manages the Holiday Inn and Crowne Plaza Hotels in Israel. Shai added, 'The global crisis is felt in grains. We're absorbing the rising prices and we haven't passed them onto customers. We decided to wait and see where the wind is blowing. If the price rises continue, we'll have to revise our prices.'

Retailers Merchandise Israeli Foods on 60th Anniversary with Some Reservations
New York...Israel will be celebrating its 60th anniversary this Thursday, a celebration that will be joined by President George Bush. The anniversary will also be celebrated by many supermarket chains and independent retailers in the U.S., although not all will be using the anniversary as their theme. Sources told KosherToday that many retailers simply could not make the adjustment so soon after Passover. Izzet Ozdogan of Osem USA, which took the initiative in organizing many of the merchandising programs, explained that his company had offered to partner with many other chains but while 'everyone wanted, most could not be ready on time.' Yoram Bahiri of Tnuva USA said that he was focusing his efforts on Shavuot (evening of June 8-10), since dairy is so much a part of the holiday. Tnuva has been concentrating on expanding its dairy products in both the kosher and mainstream markets. Osem, in fact, partnered with two major supermarket giants, SuperValu and Safeway, in celebrating Israel's 60th anniversary. Yakov M. Yarmove, Corporate Manager of Ethnic Marketing and Specialty Foods for SuperValu, is not new to promoting Israeli products, particularly in conjunction with Israel's Independence Day. Yarmove has included the merchandising program on the chain's annual kosher and Jewish calendar. But the SuperValu ads avoid mentioning the 60th anniversary. The Jewel-Osco ad, for example, is headlined 'Jewel-Osco and Osem are proud to bring you the finest Israeli Products from the Land of Milk and Honey.' The same was true for its promotions in its other stores, including Acme, Shoppers, Bigg, and Shaw's. Sources say that while using the 60th anniversary to promote the Israeli products, SuperValu avoided mentioning the 60th anniversary 'for political reasons.' This was not true for Safeway, which headlined its promotion with 'Join Vons and Osem to Celebrate Israel's 60th Anniversary.' The same theme was repeated for promotions in many of its Safeway, Genuardi's, and Dominick's stores. In addition, Vons Israel's 60th Independence Day program included live consumer interviews from Vons stores in L.A. and San Diego on May 4 and May 11, broadcast by a number of radio and TV programs in Southern California. Independent stores that market Israeli foods in Los Angeles, Miami and New York featured Israeli flags and big signs 'Happy Holiday on Israel's 60th Anniversary.'

New Yellow Stickers Used to Identify After Passover Products
New York...A yellow sticker that says that 'the product was produced after Pesach' is being increasingly used in the U.S. and Israel. The stickers offer assurances that the product was not produced from ingredients that were prepared before Passover. Retailers say that the stickers also help guarantee shoppers that the product is fresh. They say that shoppers shun items that say 'kosher for Passover,' believing that their shelf life is already expired. The yellow stickers are particularly noticeable on pre-packaged bakery products.

Successful Restaurateur Fails to Emulate Model Elsewhere
Los Angeles...Joey Allaham's attempt to emulate his successful New York Prime Grill model in other cities has come to a crashing halt on Rodeo Drive. After rumors that the closing was temporary, the upscale steakhouse did not re-open after Passover. The story about the ultimate closing of the Prime Grill in LA was reported in the Jewish Journal. When it opened in December 2006, the Journal quoted Samuel Franco, the restaurant's director of operations, as saying: 'There's never been a kosher restaurant like this in Southern California. New York has always been ahead of L.A. in certain ways. With the Prime Grill's opening, L.A. now catches up.' Kosher restaurants have been closing with increasing frequency in many major cities outside of New York at a time when the kosher retail business has been exploding in those cities. The Prime Grill had also closed a branch in South Florida and is said to be stalled in its plans to open a branch in Las Vegas. In the meantime, its New York restaurant is believed to be one of the most successful kosher restaurants in recent history. In the Los Angeles Jewish community, many reasons are given for the closure, ranging from long distance management to the high prices. But industry sources say that New York is in a class by itself in that it has the masses to keep a Prime Grill-type restaurant going, including a substantial affluent base. One New York restaurant maven told KosherToday, 'for every New Yorker that visits the Prime Grill two or three times, the Angelino barely visits once and that's no way to keep up with that kind of overhead.' He added,'You know the restaurant business is a funny business in that people keep trying irrespective of the number of failures. I am sure that it won't be long before someone else will give it a shot.'

Forward Identifies Agri Mole as 'Orthodox Couple'
New York...Although the story of alleged animal abuse at the Postville, Iowa plant of Agriprocessor, the nation's leading provider of kosher meat and poultry, is now more than two years old, the Forward, a weekly New York based Jewish weekly which has led the crusade against Agri, continues to find opportunities to keep the story alive. In its latest issue, the publication revealed that the 'infiltrators' who shot the famous video on behalf of PETA, the extremist animal rights group, was none other than 'a married couple who keep kosher themselves.' Hannah and Philip Schein are described as 'undercover investigators for the animal rights group People for the Ethical Treatment of Animals (PETA).' 'Now, for the first time,' wrote the Forward, 'they are going public with their identities.' The paper reveals that 'since 2002, the Scheins have taken on about 20 undercover cases, as well as others they have conducted publicly. The targets of their stings have run the gamut from an egg farm managed by Trappist monks, to a Canadian bear-baiting operation that has supplied fur to the British Royal Guards, to songstress Beyoncé Knowles, once an enthusiastic wearer of fur.' It appears that one of the other victims of the PETA undercover agents was Norman Schlaff, owner of the Musicon Farm in Gosha, N.Y., where kosher venison is produced. According to the Forward, Schlaff said that two young people who appeared to be a Modern Orthodox couple toured the farm and, like many of his visitors who wish to ensure that their meat is kosher, took videos and photographs of the slaughtering process. 'The next day, PETA called and said, 'Go on the Internet,'' Schlaff said. Schlaff found a page on the PETA's website that accused slaughterers at the farm of sitting on the deer to hold them down while their throats are slit, an allegation that Schlaff denies. 'It was really very disturbing,' Schlaff said of the unwelcome attention he received after the PETA article. 'I got thousands of e-mails, including some death threats from people saying, 'We're going to do to you what you do to the deer.''

The USDA, which monitors Agri and other slaughterhouses in the country, has never substantiated any of these allegations and has in fact never halted production, as it is apt to do when abuses are confirmed. Agri has had numerous inspections by experts in humane slaughter who have given the company high grades. Even PETA praised Agri for being the only company in South America to follow humane slaughter practices. Rabbi Menachem Genack, head of the Orthodox Union's kashrus division, which provides certification for both Agri and Musicon, told the Forward that liberal Jews such as the Scheins are using the term 'kosher' as a 'generic phrase' to denote practices they consider morally acceptable, thus missing the 'fundamental issue' of kashrus: obedience to Jewish law.

News From Israel

Israelis Face Steep Price Increases After Passover
Tel Aviv...Shoppers at local supermarkets restocking their shelves after Passover were shocked to find that prices for many items had risen anywhere from 5% - 25%. While being aware of the worldwide surge in food prices, Israelis thought that the country's prosperity had rendered them immune. Many articles in Israel's media were focused on the skyrocketing rice prices. Rice is a basic staple of the Israeli diet and is viewed as the symbol of the rising prices. The major importer of rice. for example. took pain to point out the source of the price increase, blaming Japanese for setting the price at $1200 per ton and now even levying a tax on Basmati rice that is preferred in Israel and not used by the Japanese who prefer the cheaper kinds of rice. Choice Israel Marketing, which imports rice for a few Israeli marketing chains under a private brand name, was surprised by the government's decision to levy a tax of $200 per ton on exports of Basmati rice. The importers feel that these actions by the Japanese will lead to further increases ion the price of rice of about 30% in the price of Basmati - on top of the latest price hikes of about 60% on average. The fact that Thailand just announced its suspension of rice exports will contribute to the upward spiral. The rice story may only be the tip of the iceberg for Israelis as the worldwide increase in Ethanol is likely to affect dozens of other food categories as it is in other parts of the world.

One Million Visitors Came to Jerusalem Over the Passover Holiday
Jerusalem...Over one million visitors came to Jerusalem over last week's Passover holiday, Globes reports. According to the Jerusalem municipality, which released the figures, the number of visitors to the capital represents the highest total in the past 20 years. The city's hotels were overflowing during the holiday, which ended on April 27th. Interestingly, this year's mix included more tourists than Israelis. In general, there were 4.2 million hotel overnights in the first quarter of 2008, 11% more than in the corresponding quarter of 2007. While the number of tourist overnights rose by 37%, hotel overnights by Israelis fell by 8%. Figures released by the Israel Hotel Association reveal that tourists accounted for 53% of the total number of hotel overnights, against 47% by Israelis. The national hotel occupancy rate stood at 58%, 15% higher than in the corresponding quarter in 2007, and 8% higher than in the corresponding quarter in 2006. However, these figures are still way below the global average. Jerusalem had the highest occupancy rate at 80%, followed by Tel Aviv with 76%, while the rate in Eilat was just 50%. 60% of all hotel nights were in Jerusalem and Tel Aviv.

My Sixth Sense

China's Kosher Restaurant and the Tibet Issue
By Menachem Lubinsky...I must have received more than a half dozen e-mails with various links to the story that the Chinese government would be opening a kosher kitchen this summer when it hosts the Beijing 2008 Olympics. It is no secret that the Chinese are hoping that the Olympics will be a showcase for a society that has often seemed closed to the Western world. While certainly newsworthy, I had decided to hold off on covering the news about the restaurant until it actually opened and was used by kosher adherents. Many people that I know make their livelihoods from doing business with China and they have often remarked how friendly the Chinese are to Jews, not withstanding their foreign policy, which could be construed as being against Israeli interests. More than 1200 Chinese companies are kosher certified, as many of their ingredient and end user products end up in kosher markets all over the world. So when 185 rabbis called for a boycott of the Olympics this summer, it was a bit disturbing to them, particularly when there was an attempt to equate the Beijing Olympics with the 1936 Olympics in Berlin prior to the Second World War. I received a call from an Israeli importer who feared a backlash from the Chinese by imposing greater tariffs and further increasing food prices, particularly kosher foods. Don't get me wrong, what is happening in Tibet is appalling, but equating the 2008 Olympics with the 1936 Summer Olympics in Berlin is equally as appalling. Some people are too quick to equate the Holocaust or the events in pre-War Germany with contemporary civil rights abuses, as a number of Orthodox Jewish organizations pointed out in their statement to counter the call for a boycott of the Beijing events. There is not even a remote similarity to the preposterous crimes committed during the Holocaust. I don't necessarily disagree that there is a moral imperative to speak out against abuses like the Chinese are allegedly perpetrating in Tibet. But at the same time, there is a need to be careful not to throw out the baby with the bathwater. Jews have some very important interests in China, including its being a major supplier of food and food ingredients to the kosher food market worldwide. So the opening of an Olympics kosher restaurant by the Chinese is noteworthy in the context of the broader interests of the kosher community and that is certainly a far cry from the behavior of the Third Reich in 1936.

New Product Showcase

Jelly Belly Candy Co. Introduces Dark Chocolate Jelly Belly
By Eda Kram... Jelly Belly introduced a bold new flavor that crosses the line between sugar confectionery and chocolate. The new Dark Chocolate Jelly Belly flavor was introduced at the International Fancy Food Show and will be in stores nationwide this spring. This new jelly bean begins with real dark chocolate and cocoa, and then it is mixed up with the secret Jelly Belly recipe. The result is a bean that combines the best of both worlds. Jelly Belly also has a milk chocolate-inspired flavor in their line of 50 Official Flavors. Chocolate Pudding was the first chocolate jelly bean ever created. The new Dark Chocolate Jelly Belly bean is dairy-free, certified kosher by the Orthodox Union (OU). Jelly Belly Candy Company is celebrating 110 years of candy making this year. Jelly Belly jelly beans took the world by storm with their introduction in 1976 when they became the favorite of President Ronald Reagan and were the first jelly beans in outer space. Additional information is available from Jelly Belly Hotline at (800) 522-3267 or at www.JellyBelly.com.

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