November 2, 2020

Israel’s Food Industry Reeling from Covid-19; Food Industry Will Retool

Jerusalem…It was late May when a report by the Foreign Agriculture Service of the United States Department of Agriculture issued a distressing report on the state of Israel’s food industry in the wake of the Covid-19 pandemic. Industry sources say that the situation has gotten even worse since the May report which had reported that more than 1.1 million Israelis were unemployed. That number has risen of late with the onset of the second wave leaving the once boasted 4 percent a distant memory.

The Israeli Hotel Restaurant and Institutional service (HRI) sector continues to suffer as they continue to be affected by a shut down by government orders. This action impacted the institutional food suppliers, some of which were supplying solely to the HRI sector. Market closures across Europe due to the COVID-19 outbreak put an end to most Israeli fresh exports and some farmers had to halt their harvest almost completely. Israelis continue to clear supermarket shelves. The first food items to be cleared from store shelves were tuna and vegetable conserves followed by flour, rice, dry beans, and pulses. As the crisis continued, an unusually high demand for table eggs led to market shortages and even a black market for eggs. The egg sector is highly regulated in Israel.

Israel will likely see a future redesign of its food logistic centers with larger storage capacities and computerized systems that can respond to demand with less manpower and more efficiency. Normally, Israeli consumers do not stock food but only purchase what is needed on weekly basis. However, households are now realizing the need to keep an emergency stock of basic products at home. Large retailers will likely build up their mail order infrastructure. A high percentage of Israeli consumers (especially the elderly) encountered this purchase option for the first time during this crisis. Fear of public places and large unnecessary gatherings will drive consumers to continue using this option. Furthermore, producers and suppliers who in the past sold only to retailers or in the HRI sector began to reach out directly to the end consumer through social media, offering their goods directly via mail orders