Tnuva to sell cottage cheese in US
Inspired by Strauss' success with Sabra hummus, Israeli food maker
Tnuva is planning to take the United States by storm with its cottage cheese.
Yedioth Ahronoth has learned that the company is working on a plan
to penetrate the American market with the Israeli soft white cheese through a
local dairy farm that will be trained by Tnuva as a subcontractor.
The US doesn't have a product similar to the Israeli cottage
cheese. The most popular white cheese in the country is still Philadelphia
cream cheese with 30% fat, which introduced a low-fat version only several
years ago.
Tnuva's plan to "conquer America" was announced recently
in a board of directors meeting, which decided that a thorough research of the
issue would be submitted to the board's approval.
The board members were informed that in light of Tnuva's bitter
experience with the dairy farm it built in Romania, which was shut down and
cost the company NIS 10 million ($2.75 million) in losses, this time the
penetration would be gradual. Therefore, in the first stage, the company will
not set up a dairy farm in the US but will have a local manufacturer produce
the cottage cheese and other products for Tnuva.
Today Tnuva exports to the US products worth just $8 million a
year, which are designated for the kosher market. The volume of the kosher
dairy products in the US is valued at $300 million a year, and it holds a huge
potential growth for Tnuva. In addition, entering the US will provide the
company with added value in terms of a public offering, by finally fulfilling
the company's dream of making it abroad.
So far, Tnuva has not exported its flagship product – cottage
cheese – due to its short shelf life. While the shelf life of soft white cheese
is 35 days, the shelf life of cottage cheese – which does not contain
preservatives – is only 14 days, and so it is not worthwhile flying it abroad, and
the company would need a local manufacturer to produce it.
The new initiative is part of efforts made by Apax, Tnuva's
controlling shareholder, to find new growth engines for a company with a huge
market share. According to the StoreNext rating company, Tnuva's market share
of all dairy products in Israel rose from 57.1% in the first quarter of 2012 to
58.9% in the first quarter of 2013. Such a large market share essentially stops
the company from making any significant growth in Israel.
Strauss, according to this ranking, had a market share of 21.4% in
the first quarter of 2013, while Tara captured only 9%.
Tnuva's growth potential is even smaller when it comes to cottage
cheese. In the first quarter of 2013, the public resumed its consumption of
Tnuva's cottage cheese following the social protest in Israel, and its share in
the total sales of cottage cheese in Israel rose from 65.9% in the first
quarter of 2012 to 71.7% in the current quarter – a market share considered
unprecedented in other products.
The company's activity in the US is overseen by Tnuva USA CEO
Yoram Behiri. A year ago, the company began advertising its products in the US
for the first time, including on the Fox network and the Food Channel, in a bid
to expose the American consumer to the Tnuva brand and to the wide variety of
hard cheese it exports to the US market.
However, while Strauss is highly active in North America in
general and in the US in particular, with the Sabra and Max Brenner brands,
Tnuva's activity in the US is relatively undeveloped.
Behiri has said in the past that "Tnuva USA has excellent
business results and positive feedback from our consumers, and it is growing by
dozens of percentage points every year. Tnuva is the leading company in Israel,
and that obligates us to make Tnuva USA the leading company in the kosher
market in North America."
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