August 18, 2008

The Emerging Salad War

Several months ago, this publication reported that Osem executives were looking to expand in the U.S. market, particularly in salads. They probably watched with some concern the acquisition by the Strauss Group of the Queens-based Sabra brand. A story in Globes at the time also indicated that Osem was looking to enter the growing U.S. Mediterranean salad market. The question was how, given that it already owned the Sabra brand in Israel, would it violate an agreement to keep the Israeli brand in Israel? Even if Osem had used its Hebrew name here, it would have set off an intense war, especially if they decided to use the similar brands, albeit with different distinct labeling and packaging.

The acquisition last week by Osem’s subsidiary of Tribe, a Massachusetts-based salad producer, with a strong business in hummus, seemed to be Osem’s response to the Strauss Group. Under the leadership of Yehuda Perl, Sabra had emerged as a high-end salad producer with successes in both the Israeli and general markets. Through its distinctive packaging and aggressive marketing, Sabra had become one of the major success stories in kosher, albeit that Sabra had carved out a niche well beyond kosher. While Tribe is very much a mainstream brand, its products are often on kosher shelves as well. Osem has been extremely successful in becoming a major brand in kosher, while at the same time expanding into other markets as well. It remains to be seen how Osem will handle its new salad presence in the U.S. If their own pronouncements are any guide, a salad war may well be in the offing even in the kosher market.