Kosher demand from the west fuels Israel exports

Business Monitor International (BMI) released the Israel Food Drink Report this month, showing that the total value of Israel exports has gone up from €276.3m in 2002 to €374.3m in 2007.

One of the reasons it cites for this increase is the growing demand for kosher, although individual figures on kosher exports were not available.

BMI predicts the export market will continue to grow to reach €460.9m in 2012.

Israel traditionally imports much more than it exports.

Lyndsey Anderson, head of food and drink at BMI, told FoodNavigator.com that and therefore keen to boost its export capacity.

She said: "The only way it will be able to do this effectively is to leverage its competitive advantage, ie its experience in kosher food production.

Producers can effectively sell their kosher products as premium goods to the Western world, for which such products are harder to obtain, thus contributing far more to exports in value terms than in volume terms."

Kosher appeal According to the report, "Kosher products have gone mainstream" .

It is not only religious Jews who are choosing Kosher.

Vegetarians and allergy sufferers are opting for these products because the kosher labelling system provides such a comprehensive ingredients list as well as identifying whether the product contains dairy or meat.

Also, due to the rigorous requirements for foods to be certified as kosher, these products are often perceived as healthier and cleaner than other products," said the report.

Israel is dependent on imports, but is changing this as it imports begin to decrease this year, thereby narrowing the value gap between the two markets.

Anderson said BMI's research has found that high value products such as kosher wines are proving very popular.

"This trend has also been highly noticeable among halal producers in the Gulf region and Malaysia , who are looking to capitalise on growing Western demand," she added .

In 2002, Israel imported products amounting to the value of €1,248.1m, representing a difference between exports of €972m. In 2007 this rose slightly to €1,265m, meaning a gap of €891m. BMI predicts imports start decreasing this year and, by 2012, will drop to €1,223m, which translates to a reduced gap between export and import value of €763m. At the same time, BMI forecasts that per-capita food consumption will decrease because mass grocery retail is widespread, and so consumers will not have to increase their food spending in such outlets.

Expanding companies As kosher demand grows in Europe and North America, companies are making moves into these more lucrative markets.

One example is G Willi-Food International, Israel's largest food importer and supplier of kosher food.

Last month, its subsidiary Gold Frost completed its acquisition of a 51 per cent stake in an unnamed Danish dairy distributor for an undisclosed sum.

Under the agreement, the new venture will produce a variety of non-kosher and kosher dairy goods including blue cheese, edam, gouda, havarti and feta.

This is not the only acquisition made by the company as it aims to expand its operations.

In 2006, it floated Gold Frost in London to raise money for its planned expansion into the US and UK halal markets.