siness

A Palate's
De t

Israeli food companies are learning
to play the American marketing game.

MIKE DUFF SPECIAL TO THE JEWISH NEWS

he success enjoyed by
companies such as
Lipton Soups and
Sunkist fruits may
soon be joined by a
couple of Israeli com-
panies whose products
are competing with
the top of the line
brands in United
States supermarkets.
In fact, you may be
using some of the
items produced by one
of these companies
and not even know it.
In May, the top names
in the food business gath-
ered in Chicago for the
annual Supermarket
Industry Convention. In
addition to Coca-Cola,
Nabisco and Stouffer's
were first-time exhibitors
Osem and Carmel, Israeli
companies who are con-
vinced they can build a
substantial following
among American con-
sumers.
With $250 million in
annual sales and nine
plants operating through-
out Israel, Osem, 53 years
old, is the largest food
producer in the Holy
Land. Founded when
many of the country's
noodle producers merged
to form a single, more
powerful food producer,
the company began
exporting kosher products
to the United States
about 30 years ago.
At first, those exports
were limited to a few
items distributed to a
handful of markets in
American Jewish commu-
nities. But since then, dis-

tribution has become
national, and the compa-
ny has expanded its
sphere to include produc-
tion of private label foods
to Farmer Jack super-
markets, among others.
Its soup and sauce line,
Gourmet Cuisine, is dis-
tributed by mass mer-
chants and drug chains
including Kmart and
Walgreens. And, more
recently, it. began produc-
ing soups .sold under the

Slim Fast
soups are
made in Israel.

Slim Fast banner. All
Osem products are still
made in Israel for export.
The Osem Export
Group, Ltd., founded in
Tel Aviv in 1962, sells
products in 30 countries.
Responsibility for U.S.
sales falls into the hands
of Izzet Ozdogan, presi-
dent of Osem U.S.A. Inc.,
a subsidiary based in the
New York suburb of
Englewood Cliffs, N.J.
Ozdogan began working
for Osem in Israel in
1983. In 1989, when he
was appointed president
of Osem U.S.A., the com-
pany was doing about
$1.5 million in sales.
Today, that figure is $10
million, and Osem U.S.A.
is ready for bigger things,
as their debut at the
supermarket convention
portends.

Gad Propper, an
Israeli-based Osem execu-
tive, also attended the
Chicago show and looked
on developments approv-
ingly.
"This is the major exhi-
bition in the United
States," Mr Propper
noted. "We came to the
decision that, if you want
to be in the market, you
better be here. I think we
made the right decision."
The company still has
an important core busi-
ness in the kosher mar-
ket. In the Detroit area,
distribution of the compa-
ny's Kosher products is
handled by Greenfield's
Noodles (see sidebar).
Yet the key to growth,
Mr. Ozdogen said, is in
providing products for
mass merchants and
drugstores, and doing
more private label. Both
facets of the market are
growing rapidly.
Once, private label
goods and products made
for mass retail and drug
chains were considered
second rate. That whole
segment of the food busi-
ness was written off as a
wasteland of bland fla-
vors and unappealing
packaging.
But, as more kinds of
retail outlets are getting
into food, competition has
become increasingly
intense. Companies that
can produce attractive,
high class goods under
private labels and for spe-
cific trade classes, such as
mass retailers, are in

PALATE DELIGHT page 32