December 14, 2015

Israel’s Dairy Industry Vie for Strictly Orthodox Market

Jerusalem - While more than 70% of Israelis eat kosher, Israeli food companies expend a great deal of effort and money to court the 10% - 15% who are part of the “Charedi” (strictly Orthodox) market. Nowhere is this more apparent than the lucrative dairy industry, which is largely dominated by Tnuva but has strict competition from dairies like Tara and Gad. According to Globes, Gad Dairy is in negotiations with a group of investors to bring partners into the company at a company value of NIS 300 million. The new partners will hold 49% of the shares. Tnuva’s majority ownership is by Bright Food, China’s second-largest food company. The dairy companies produce products that have some of the most stringent certifications to appeal to the Charedi market said to consist of at least 100,000 households, representing at least 10% of Israel’s total population. In the case of many consumer items, the Charedi sector represents over 30% of buyers. The buying power of the average charedi is estimated at NIS 45,000 per year, and NIS 3.3 billion for the entire sector, per year. The biggest potential market is food, which represents 45% of household expenses, as compared with 30% for the secular sector. Tnuva invests $ 800,000 in advertising to the sector, out of a total $18 million advertising budget.