Innovations in the Israeli Food Industry
Surprising products developed through Systematic Innovation processes
Published in the Isreali Export Institute Magazine, September 24th, 2005
By Ari Manor, CEO, ZOOZ
The basic conditions in Israel are not conducive to a booming food industry. The local market is relatively small, with less than seven million consumers, and exports of food products from Israel are even smaller. Israeli foods are perceived throughout the Western world primarily as niche goods targeted at the kosher or natural food stores. Israel does not share borders with Western countries, and its high shipment and employment costs coupled with its limited production capabilities make it difficult to competitively export foods from Israel.
It may be surprising therefore to discover that Israel has a large selection of food products compared to other Western countries and that new products appear on the shelves almost daily. Several factors contribute to the accelerated innovation rate prevalent in Israel's food industry.
- Fierce Competition: The food industry recently underwent a process of centralization, and is currently controlled by large corporations such as Tnuva, Osem, Strauss-Elite, Tami-Telma-Unilever, which are competing against each other at full force. New products present the core of the competition and are developed annually (and sometimes even seasonally) by each corporation. Testimony of this can be seen in the "limited edition" products, developed specifically for a particular season or holiday. For example, limited edition flavors of winter ice creams, or apple and honey flavored yogurts developed specially for the Jewish New Year.
- Overseas Exposure: The penetration of multinational corporations into Israel over the past decade has contributed to the professionalism of Israeli companies and has increased centrality and competitiveness between industry leaders even further. Osem has become Osem-Nestle and its ice creams compete against Strauss, which benefits from Unilever's patronage. The multinational companies have brought many new products to Israel, but more importantly, they have contributed to the advancement of Israel's manufacturing techniques and implemented structured processes for innovation management.
- Technological power: Israel is perceived as a country with excellent technological staff, and Israeli engineers are viewed as being adept at improvisation. This not only applies to Israel's advanced high tech and bio-technology industries, but also to the food and beverage industry. For example, Tivol, an Israeli-based company, is successfully developing and exporting dozens of new types of soy-based meat substitutes worldwide, using brand new manufacturing technologies. Another example is the Israel Volcanic Institute that develops new varieties of agricultural produce, and local start-up companies that have developed advanced packaging technologies.
- International Retailing: In recent years, Israeli chain stores discovered that local markets were relatively small and so they began expanding their activities overseas. The first to do so were the Israeli fashion stores that opened branches in Europe and the Far East (Fox, Castro, Kenvelo and others.) Next were the cafés, which are extremely popular in Israel. The first to expand overseas was Max Brenner who opened branches in Europe and Australia. Max Brenner is a unique type of chocolaterie that serves a selection of hot chocolate drinks, a concept that has become quite popular among young consumers.
- Thinking Tools: Another reason for Israel's increased innovative activity in the food and beverage industry stems from a unique method developed in Israel. The method, termed "Inventive Thinking," enables systematic prediction of which new products will appear on to the market over the next few years. In workshops using this method, hundreds of applicable ideas for innovative products and packaging are proposed within a few days. Following are several ideas that were successfully applied following workshops conducted at Israeli food and beverage companies:
- Tiv Tirat-Tzvi - Mana-Mana Sausages:
Individually wrapped hot dogs in nylon sleeves (in singles or pairs), designed for easy microwave preparation. Even young children can tear a sleeve off and heat the sausages in a microwave oven. The nylon sleeve opens by itself while the hot dog is being heated, thus protecting the child from the heat upon opening. - Strauss Salads - Shakshuka Salad:
Shakshuka is an oriental omelet made from a mixture of tomatoes, spices and eggs cooked over a low heat. The new mixture makes the Shakshuka dish fast and easy to make at home. The mixture is poured into a frying pan and the eggs are added next. The dish is ready to serve within five minutes. This new salad adheres to the Strauss positioning that addresses Israeli tastes. It was selected as one of the leading ideas at the Inventive Thinking workshop after realizing that Strauss could develop it immediately and relatively easily. - Strauss Ice Creams - Bratz Ice Creams:
The toffee vanilla flavored children's ice cream with the Bratz lips imprint is immediately associated with the Bratz doll brand. Strauss received the franchise from Bratz, a leading toy manufacturer. The ice cream comes in three different packaging designs, each representing a different popular doll. The product is also offered in a package that includes a free Bratz stickers gift. In keeping with this co-branding concept, other ideas were developed and applied for ice cream cartons in cooperation with Lavazza (espresso ice cream) and Danone (yogurt ice cream).
To summarize, despite its size and geographical location, Israel is an interesting and productive melting pot for new ideas in the food industry. Subsequently, if you are seeking really surprising products (or methods of developing them) - Israel just might be the place for you.
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Written by Ari Manor, CEO, ZOOZ. All rights reserved.
Any trademarks and symbol-marks mentioned in this article belong to their owners.
