July 24, 2017

“Efficiency” Behind Manischewitz Plant Closing

Newark, NJ - ”The planned closing of the Manischewitz plant is the end of an era for kosher food manufacturing,” said Yakov Yarmove, Ethnic Marketing and Specialty Foods for the Albertsons Companies. Mr. Yarmove was referring to the fact that although there is still a significant manufacturing base in kosher, industry experts say that the rapidly growing kosher category primarily relies on outside production partners. In a statement to Kosher Today, a Manischewitz spokesman said: “At a challenging time in the retail and grocery business, we have made the difficult decision to close our plant in Newark. Beginning this fall, our products will be made at more modern facilities.” Known as the world’s leader in the production of matzoh and other kosher foods, the 129-year old company will most likely have its matzoh produced in Israel. In response to an inquiry from Kosher Today, a Manischewitz spokesman refused to confirm the widely circulated rumor, saying: “As a private company, Manischewitz does not disclose its production partners.” Other products such as macaroons and gefilte fish, which are part of the extensive line of products by Manischewitz will also be produced at other plants. It is not uncommon for competing brands to produce their competitors’ products and even Manischewitz used to produce many items of competing brands. However, the company said there will be “no change to the current product offerings,” adding: “Manischewitz will continue to offer new and innovative products and packaging for both Passover and year-round.”

The Newark plant opened with a great deal of fanfare in 2006 and was designed to consolidate the manufacture of many products by the kosher iconic company, which through acquisitions and expanded lines produced its products in a number of other plants. However, industry sources told Kosher Today, that despite its relatively stable market share in kosher, “the plant never really reached its fullest potential.” By taking this action, Manischewitz will be able to invest in product development, sales and marketing, the company said. It has long been known that many of the most successful kosher companies do not produce their own products. One company that uses outside production partners for over 160 items told Kosher Today that “because we can now offer better volume (due to the growing number of kosher consumers), it is easier to find companies that will produce for us, which was not the case in the past.” He added that because so much of the food industry has moved to kosher, even kosher certification has become less of a problem at many plants. Efficiency was also behind the closing of the Streit’s plant on the Lower East Side and the relocation to upstate New York.

Manischewitz had undergone many changes in ownership since the family sold the business to Kohlberg in 1991. In 2014, Sankaty Advisors, a business within Bain Capital, purchased Manischewitz for an undisclosed amount. The previous owner of Manischewitz, Harbinger had sustained huge losses due the company’s significant debt. Despite being one of the leaders in the kosher food industry, Manischewitz was faced with changing demographics in the Jewish community whereby most of its original base was shrinking. It also faced stiff competition from a growing cadre of brands that catered to the growing Orthodox consumer base who were being served by a rising number of modern kosher independent supermarkets. The Matzoh business was also significantly affected by the growing number of imported Matzohs from Israel, which because of its lower production costs and government subsidies undercut the American manufacturers.