Executive Summary

Aug 2018
Prospects
Premium brands grow and erode basic brands’ performance

Amid the general rise in awareness of higher-quality foods and higher culinary standards, there is a prominent trend towards buying more expensive and unique cheeses. Sales of basic soft cheese are eroding while premium cheeses, such as premium soft unpackaged cheese and spreadable processed cheese, show drastic rises.

Customs-free quotas allowed for hard cheese

The Ministry of Economy has opened the market to hard cheese imports in order to encourage competition and lower prices. The ministry opens a tender every year, allowing players to import hard cheese without paying customs.

Launches of healthier cheese made

Although some will argue that the healthier nutrition trend is driven by consumers, it is mainly encouraged by leading companies’ launches and campaigns. In the late review period, Tara Dairy Ltd held various prominent launches of cheese with natural ingredients and no preservatives.

Competitive Landscape
Tnuva continues to lose share

Tnuva Food Industries Ltd accounts for the majority value share within cheese but is losing share consistently. One of the prominent explanations for this is the hard cheese customs-free quotas.

Cheese enjoys some key new launches

While the main focus of dairy companies during 2017-2018 was on chilled dairy desserts, yoghurt and flavoured milk drinks, there were some interesting launches in cheese too. Tnuva Food Industries Ltd has found the dairy alternatives niche to offer a growth opportunity, seizing the growing awareness of lactose intolerance and the veganism trend.

Prospects
Fortified milk sees fast growth

The health and wellness trend continues to evolve. People often hear what they should avoid but they are not certain what they should actually eat.

Milk alternatives and reduced lactose products perform well

Milk alternatives continues to see fast growth rates. People have become more aware of what they consume and how it makes them feel.

Other trends are observed in milk drinks

As the standard of living keeps rising, and people are less sensitive to price and more focused on convenience, there is a prominent shift towards buying milk packaged in cartons rather than bags, despite the lower price of bags. Smaller household sizes also contribute to this shift, as people prefer milk in cartons that have a longer shelf life.

Competitive Landscape
Tnuva continues to lead drinking milk products

Tnuva Food Industries Ltd has seen a continuous decrease in its share of drinking milk products. During 2017, the company offered large discounts in order to maintain its share.

The Israel Dairy Board influences competition

Milk is highly regulated by the Israel Dairy Board, which is composed of representatives from the government and leading companies. The unique structure of the milk market enables it to remain very concentrated, maintaining its shares and prices.

Prospects
Protein-enriched products drive growth

Corresponding closely with the health and wellness trend and consumers’ rising engagement in sports, there is also an increase in demand for high-protein products. This is a trend that is relatively easy for consumers to adopt; while other nutritional trends tend to focus on foods that should or should not be consumed, this is a positive health trend that focuses on foods that are widely recommended.

Flavoured yoghurt grows at the expense of plain yoghurt

Consumers are shifting away from plain yoghurt towards flavoured yoghurt. Although plain yoghurt is perceived as the healthier choice, and “cleaner” and lower in sugar, consumers increasingly choose flavoured yoghurt which is seen as more interesting and pampering.

Consumption shifts towards higher-fat products

Although in most food categories consumers pay less attention to fat levels and diet products, in yoghurt it is a significant factor as fat has a greater impact on the product’s flavour. In addition, consumers are increasingly aware that the number of calories in a product is not as important as its composition.

Competitive Landscape
Strauss Group strengthens thanks to innovation

Strauss Group Ltd leads yoghurt and sour milk products with a growing value share. The company is a leader of innovation; it is fast to recognise consumer trends and invests in constant development of new products to address them.

Tnuva Food Industries loses share

Tnuva Food Industries Ltd is the second strongest player in yoghurt and sour milk products. Its value share is on the decline despite launches of new products.

Other launches seen in yoghurt and sour milk products

While the two leading players focus on launching high-protein products, targeting consumers who engage in sports, Tara Dairy Ltd directs its marketing efforts based on the indulgence and pampering trends. In 2018, the company launched Müller Froop flavoured yoghurt with only 0.

Prospects
Focus shifts towards adults in chilled dairy desserts

Companies have realised the potential in targeting older consumers who seek unique, more indulgent flavours and textures and are willing to pay extra for them. Consumers seek to eat healthier foods but whenever they are tempted to eat something sweet they are more likely to choose the most indulgent product, obtaining as much pleasure as they can while considering the health cost.

Volume decline continues in chilled dairy desserts

The continued volume decline of chilled dairy desserts is mainly a reflection of the health and wellness trend. As awareness of high sugar levels has risen, consumption of chilled dairy desserts has become less frequent, being regarded as a treat or for special occasions.

The culinary trend boosts demand for cream

There is a prominent trend towards higher culinary standards. An abundance of TV cooking contests and many cooking videos on social media intrigue consumers into using higher-quality ingredients and cooking more sophisticated and unique dishes.

Competitive Landscape
Tnuva Food Industries maintains its share of other dairy

In contrast to its other categories within dairy, Tnuva has succeeded in maintaining its value share of other dairy despite difficulties. Its share remains stable due to its dominance of cottage cheese and cream, both of which see positive growth and little competition.

Strauss Group employs innovation strategy

Strauss Group Ltd is innovation-orientated, investing in frequent launches and their accompanying campaigns. The company encourages a scaling-up movement in other dairy by offering more indulging dairy desserts and maintaining its brands’ strength, mainly for Milky and Splendid.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Israel with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Israel, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in Israel market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth  
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Dairy in Israel?
  • What are the major brands in Israel?
  • How has the economic downturn impacted sales performance given its staple food status?
  • Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
  • How are volatile farmgate prices for milk impacting retail prices and sales performance?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Butter and Spreads

Cheese

Drinking Milk Products

Other Dairy

Yoghurt and Sour Milk Products

Packaged Food in Israel - Industry Overview

EXECUTIVE SUMMARY

Indulgence and premiumisation trends boost packaged food performance
Healthy eating trend continues to evolve
Contrasting fortunes for top two competitors in packaged food
Discounters and supermarkets still lead despite gains by other distribution channels
Rising health awareness will continue to influence market development

FOODSERVICE

Sales to Foodservice
Demand for frozen processed red meat slows as burger fast food players choose chilled and fresh alternatives
Increasing specialisation evident among foodservice players offering Asian cuisine
Use of milk alternatives rises among cafés and specialist coffee shops operators
Consumer Foodservice
Rising costs lead more foodservice players to switch from fresh to processed ingredients
High risk and rising costs encourage shift from casual dining to street food
Category Data
Table 1 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 5 Sales of Packaged Food by Category: Volume 2013-2018
Table 6 Sales of Packaged Food by Category: Value 2013-2018
Table 7 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 8 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 9 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 10 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 11 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 12 Penetration of Private Label by Category: % Value 2013-2018
Table 13 Distribution of Packaged Food by Format: % Value 2013-2018
Table 14 Distribution of Packaged Food by Format and Category: % Value 2018
Table 15 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 16 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 17 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 18 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 1 Research Sources