Case Number: MKT03-01
Date: May 2003
MANISCHEWITZ
One hot afternoon in the summer of 2002, Victor Bevilaqua, Vice President of Marketing for
Manischewitz, sat in his office deliberating over his strategic marketing plan for the coming year
and beyond. He was indeed challenged by many unique marketing issues. Just a couple of
hundred feet away, workers were busy baking matzo, unleavened bread that commemorates the
biblical account of the Israelite exodus from Egypt, for the next year’s Jewish Passover holiday.
As this all too familiar scent wafted through the window, Victor reflected on Manischewitz’s
rich history as a long time producer of kosher food products. He knew that it was this focus on
tradition that was the source of Manischewitz’s past success. But Victor also knew that if he
were going to grow the brand and keep it relevant into the twenty first century, he had to focus
on the future instead.
On the one hand, kosher sales nationwide were exploding. There was clearly a demand for
kosher certified products. That was the good news. On the other hand, however, much of this
new growth was coming from sales of mainstream products and brands that have been certified
kosher in recent years. Mr. Bevilaqua wondered whether to focus his efforts on the Jewish
market, or the general consumer. With the bulk of Manischewitz sales made in conjunction with
the 8 day Passover holiday, how could the company leverage its brand equity, and excess
capacity, throughout the year?
Meanwhile, Manischewitz’s parent company, RAB, was facing financial troubles, as its
corporate bonds were being traded for only 18 cents on the dollar. RAB was thus putting
tremendous pressure on Mr. Bevilaqua, as the holding company’s shaky financial situation
necessitated immediate results from Manischewitz.
COMPANY HISTORY
In 1888 Rabbi Dov Behr Manischewitz opened a small matzo bakery in Cincinnati, Ohio. His
bakery soon evolved into a successful business, innovative and prosperous, while adhering to
strict Jewish dietary rules. By the end of the century, demand for his matzo had become so great
that Rabbi Manischewitz turned to the use of gas-fired ovens, replacing the older coal stoves
being used by other Jewish bakers. The newer ovens allowed for much more careful control of
the baking speed, insuring a consistent and standard quality to the matzos. He also introduced
MBA Candidates (Prashant Chopra, Natalie Guy, Gideon Katz, Tiffany Massa, Sheila
Ochotorena, Mustafa Soylemez, Aikaterini Vrettou) prepared this case under the supervision of
Professor Russell Winer for the purpose of class discussion rather than to illustrate either
effective or ineffective handling of an administrative situation. Distributed by the Stern School of
Business, New York University. To order copies, phone: 212-, fax: 212-, or email:
@stern.nyu.edu. No part of this publication may be used or reproduced without written
permission of. Copyright 2003 by the Stern School of Business and Russell Winer.
Manischewitz
portable traveling-tunnel ovens, and was the first to package his matzos for shipment to places
beyond the immediate neighborhood of his bakery. He even began shipping his matzos overseas,
to such diverse places as England, Japan, France, Hungary, Egypt and New Zealand. His bright,
clean bakery would become a model for future kosher bakeries, both in America and abroad.
In 1932, the company built a second factory. Located in Jersey City, New Jersey, the plant
quickly became the model for all new machine-made matzo bakeries worldwide. Closer to a
much larger Jewish population than that of Cincinnati, the new factory also made distribution of
the company's product more efficient and quickly enlarged its customer base. The Manischewitz
label was soon dominant in ethnic grocery stores and delicatessens in the larger east coast cities.
Thanks to the technology and efficiency of the New Jersey factory, Manischewitz was able to
close down the Cincinnati facility altogether.
In 1940, Manischewitz produced its first non-matzo product, the Tam Tam cracker. Meanwhile,
in a licensing arrangement, Manischewitz wines began to be sold throughout the country. In
1954, the company purchased a processing plant located in Vineland, New Jersey. The Vineland
facility manufactures all of the company's canned and jarred products, including old, familiar
favorites like gefilte fish, chicken soup and borscht. The plant is primarily a hand-pack
processing operation stressing careful attention to quality and flexibility. Workers there pack
about 2,000,000 lbs. of fish and 1,000,000 lbs. of beets each year.1
Since 1998, The B. Manischewitz Company, LLC has been a subsidiary of RAB Holdings, a
private company, which owns and operates the company (see Exhibit 1). Although the world's
number one baker of matzo, Manischewitz produces hundreds of other kosher foods, including
baked goods, pastas, and soups (see Exhibit 2). Under the Manischewitz, Horowitz Margareten,
Goodman's, and Season names, the company sells its products to food distributors in the United
States, Canada and throughout the world.
WHAT IS KOSHER FOOD?
The dietary laws which govern which foods are kosher and which are not, are derived from
passages in Deuteronomy and Leviticus, books of the Old Testament. Collectively known as
"Kashrut," these laws have been followed for over 3,000 years. Today, there are over 30,000
different food products on the American supermarket shelf that are certified "kosher." The
"kosherness" of a food is indicated by a little symbol representing a particular agency's
certification that the food has been processed in accordance with the Jewish dietary laws.
Manischewitz certification comes from the Orthodox Jewish Congregations of America. For a
list of their and other certification symbols found on the packaging of kosher food products, see
Exhibit 3.
Kashrut deals with what foods may be eaten, what foods may be eaten together, and how those
foods are to be prepared. All foods are divided into three categories: Dairy, Meat and Pareve.
Dairy: Milk and milk derivatives are considered dairy and may not be mixed with meat products.
No food item that is dairy in nature can be eaten at the same meal as meat is served, and vice
1
The B. Manischewitz Company, www.manischewitz.com
2
Manischewitz
versa. Meat and dairy products, especially those that are not packed or that are unsealed, should
be separated on a constant basis to avoid mixing.
Meat: Meat must come from a kosher animal, as outlined in Deuteronomy chapter 14. An
animal is kosher if it has split hooves and chews its cud such as cows, sheep, goats, etc. Certain
birds, which are not bird of prey, are also kosher such as chickens, turkey, duck, geese etc. Other
special rules govern the entire processing of meat.
Pareve: Pareve foods are those which are neither milk nor meat. Eggs, fruits, and vegetables are
pareve and may be eaten or cooked with either meat or dairy.2
During Passover, Jewish law forbids the consumption or possession by Jews of all edible
fermented grain products (Chametz) or related foods. Therefore, even foods which meet the
strict, year-round dietary regulations, and are considered kosher, nevertheless often require
special preparation for Passover use in order to be kosher for Passover. Most processed foods
and beverages require special rabbinical supervision for Passover use. This additional, costly,
supervision ensures that production facilities and products are free from Chametz. Kosher
Passover products are usually marked with a “P” next to the certifying agency’s normal kosher
symbol.3
CONSUMERS
Jewish population
Despite the fact that Jews account for only 20% of kosher consumers, they continue to drive this
market. A survey released by the United Jewish Communities (UJC) in October 2002 showed a
US population of 5.2 million in the US down from 5.5 million in 1990. Of the more than 5
million people that make up the American Jewish population, only 2 million are considered
kosher consumers.
Within this segment further sub-segments can be identified:
“Only-kosher” consumers: it is estimated that around 800,000 Jews eat kosher foods 365
days a year. In particular, studies show that Orthodox Jews - having larger families and
observing the Jewish Sabbath and holidays - spend on average around $10,000 annually
per family on kosher products. Supermarket executives believe that Orthodox Jews are
the ones who propel kosher sales.
Regular kosher buyers: an estimated number of 1.2 million Jews buy kosher foods on a
regular basis. The return to kosher by these consumers is largely attributed to the
availability of kosher products in a large number of supermarkets across the country.
Geographically, the Jewish population is largely concentrated in the Northeast (43%). The
regions with the fewest Jews are the Midwest and the South. For an analytical distribution of the
Jewish population by metropolitan statistical area in 2001, see Exhibit 4.
The Jewish population is aging and younger Jews are getting married and have fewer children
later on in life. There are 2.9 million Jewish households. The average number of people in a
Jewish household is 2.3 which is less than in non-Jewish households (2.6). Also, 30% of Jewish
2
Empire Kosher Poultry, www.empirekosher.com
3
The Orthodox Union, www.ou.org/chagim/pesach/pesachguide/maze/basic7.htm
3
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households consist of one person (26% for the general population), 38% have two people, 13%
consist of three people, 12% have four people, and 8% consist of five or more people (11% for
the general population). Additionally, 24% of Jewish adults have received a graduate degree and
55% have a bachelor’s degree (5% and 28% respectively for the general population). The
majority of employed Jews (59%) work in management, business and professional/technical
positions compared to 46% for non-Jews. 68% of Jewish men are employed vs. 56% of women.
Median household income is around $50,000 vs. $42,000 for non-Jewish households.4
Other religious groups
Approximately 2.4 million kosher consumers or 24% of the total 10 million kosher consumers
are believed to be Muslims, Seventh Day Adventists and members of other religious groups.
Around 10 million Muslims may be buying food under special certification. However, kosher
distributors contend that about 25% of Muslims buy kosher while the rest buy “halal foods”
(“halal” is a Quranic term which means allowed or lawful).
Vegetarian and lactose intolerant individuals
Around 2.5 million Americans that are vegetarian and/or lactose intolerant are also considered
kosher consumers. They buy kosher foods because they can find the type of non-meat, non-dairy
products identified as “pareve” necessary for their diet.
The Vegetarian Resource Group’s (VRG) 2000 Zogby poll showed that American vegetarians
are most likely to be women who reside in big cities located in either of the two coasts.
Vegetarians are found mainly among the ages of 18 - 29 and according to certain vegetarian food
manufacturers the best markets are situated in the West, Northeast, Florida, and the Rockies.
Around 97% of volume sales are equally divided between supermarkets and natural foods stores
with the remaining 3% going to mass merchandisers, drug stores, and convenience stores.5 The
main drivers to follow a vegetarian diet are health, weight control, a sense of well being, ethics,
care for the environment, and animal welfare.
Health and quality conscious consumers
The last segment of kosher consumers consists of Americans who perceive kosher to be a
healthy and quality product, the kosher certification being the standard of higher quality.
Other Influential Groups
Ethnic groups, non-family households, one-parent households and unmarried couples are also
important for the food industry. It is predicted that these groups with their growing number and
purchase power will influence future food trends.
Ethnic groups: This group spent $142 billion on food at home in 2000 generating 37% of super-
market sales. Hispanics spent $54.4 billion, African Americans $51.5 billion, Asian Americans
$25.3 billion, and all other ethnic groups combined spent $10.8 billion.6 Sales of ethnic food are
4
www.Jewishworldreview.com
5
Mintel 2001
6
Cultural Access Group: “Grow with America: Best Practices in Ethnic Marketing and Merchandising”
4
Manischewitz
growing by 9% annually, compared to 1% - 3% for the food industry as a whole.7 The Kosher
industry has already began to target this group by introducing products such as kosher tortillas,
salsas, tofu and Asian sauces.
For ethnic groups in the US, food is associated with family gatherings and ethnic traditions.
Cooking, usually from scratch, is a social occasion that brings back memories and nostalgia for
the countries of origin. They shop for these products in either large chains or mass merchandisers
who have adapted to the needs of this segment by expanding their ethnic sections or in ethnic
food stores. Price is important but the quest for quality prevails. Convenience food is not
preferred. See Exhibit 5 for a list of foods that appeal to each of the above mentioned groups.8
Non-family households, one-parent households, and unmarried couples: In 2000, married-
couples represented 52% of all households down from 75% in 1960. One third of all households
in the US are now considered non-family units. The percentage of one-parent families was at
27% of all families in 2000 up from 24% in 1990.9 These trends combined with the two-income
lifestyles have increased the demand for convenience and easy-to-prepare food.
KOSHER FOOD MARKET
Food marketing associations estimate that kosher foods account for $50 billion of food sales each
year. More than 8,100 companies nationwide manufacture more than 36,000 kosher products.
While overall food sales are growing by about 1% to 2% annually, the kosher market in the US
has been growing about 12-15% annually.10 In addition, the fastest growing segment of the US
wine market is kosher wine. Sales have increased 15% a year since 1995.11 The kosher food
market is very seasonal with the Passover season representing nearly 40% of annual sales of
kosher foods.12
The USDA reports in its conclusion notes: While Jews form the core of the market for kosher
foods, the greatest potential for growth lies in the non-Jewish population, which, for reasons of
religion, health or food safety, purchases kosher food. Kosher shoppers, like shoppers in the
mainstream market, seek convenient meal solutions along with a wide variety of groceries,
meats, fish, poultry, and dairy products, as well as trendy and popular foods and beverages. 13
Additionally, they care about health and nutrition, and are among those adults who are concerned
about the safety of the food they eat.
Changing Consumer Tastes14
In the early post-war years, kosher marketers were used to target the generation of aging Jews
who grew up with Manischewitz sweet wines and couldn't fathom a festive meal without the
7
www.KosherToday.com
8
Cultural Access Group
9
U.S. Census Bureau
10
Integrated Marketing Communications.
11
Reuters Business Insight. Consumer Goods Report, Niche Markets, July 2000.
12
Levy, Y. “Kosher Specialty Producers and Distributors Slowly Fade Away as Debate Over Duplication Rages”,
Kosher Today.com, October 2002.
13
“USDA: Kosher Sales in Canada Soar by 20% in 2001”, KosherToday.com, October 2002.
14
Levy, Y. “Kosher Industry Adapts to Younger Consumers”, KosherToday.com, October 2002
5
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traditional chopped liver and stuffed cabbage. They typically bought their fish fresh from the fish
market and meats from the kosher butcher. Many bought Mrs. Adler's or Rokeach's Gefilte Fish
in the jars and cans. Pastries were obtained from the kosher bakery.
The baby boomers presented new challenges as a relatively affluent generation demanded more
than the classical kosher items, setting the stage for the huge explosion of kosher foods, which
increased from about 16,000 kosher certified packaged goods in the '70's to over 75,000 today.
The astronomical growth of the Orthodox Jewish community in the 70's and '80's created some
of the enormous opportunities that made kosher a leading specialty food in the US food industry.
The largest group of kosher consumers, the 18-40 age group, generally consists of people with
families. A significant number of those that fall into this group have 5 or more children (10-15
children not uncommon in many circles, particularly amongst Chasidic Jews). There is also a
significant group of single kosher buyers that have a considerable amount of disposable income.
These consumers are demanding more diverse products. "They simply want everything that can
be kosher to be kosher," says Menachem Lubinsky of IMC, publisher of Kosher Today. "Eating
well is part of the new lifestyle that goes with living well and it, of course, all has to be
kosher."15
There are some lifestyle nuances that are also worthy of note for the kosher companies. The
conventional wisdom, for example, is that many younger women work to bolster household
income and thus the focus should be on convenience foods. While there is a great deal of merit to
this logic, the evidence is that even the working kosher housewife also likes to prepare meals at
home, covets recipes, and is increasingly buying some of the growing roster of kosher
cookbooks. See Exhibits 6 – 10 for charts pertaining to the kosher market.
COMPETITION
Despite the relatively small size of the kosher food market, Manischewitz faces stiff competition
from numerous sources. These competitors include small companies who offer their products
locally in addition to the much larger national firms. Over the last several years, as the demand
for kosher foods has increased, so has the number of competitors.
National Competitors
Manischewitz has several main competitors including Rokeach, Streits and Kedem. These
companies, along with Manischewitz, are considered the traditional national kosher brands and
hold a large share of the kosher market. All of these companies offer hundreds of food items, in
addition to special Passover foods that are offered once a year.
Rokeach is considered Manischewitz’s main source of competition. Founded over 125 years ago
by Israel Rokeach, the company has evolved from a soap company to the largest manufacturer of
kosher food. It has a 200,000 square foot production and warehouse facility in Newark, NJ, and
offers the broadest variety of kosher items year round including a well established line of
candies, chocolates and baked goods. Additionally, Rokeach is the largest manufacturer of
15
Levy, Y. “Kosher Industry Adapts to Younger Consumers”, KosherToday.com, October 2002
6
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kosher for Passover foods and stocks over 1000 kosher for Passover food items alone. Along
with the Rokeach brand, they own and operate the Mother’s, Mrs. Adler’s, Grandma’s, Tradition
and Heritage labels. Although Manischewitz views Rokeach as a competitor, the company has
forged various co-packing agreements with Rokeach, as well. Under these agreements, one
company manufacturers a product for the other based on capacity and demand variables. The
thinking behind these agreements is that it will help solve excess short-term capacity issues while
being a source of profits.
Founded in 1883, Streits is similar in its size and scope to Manischewitz. A national brand that is
growing rapidly, the company employs about 1000 people and offers most kosher food items.
Jack Streits, the founder’s son, still presides over the making of all of the foods to ensure his
foods meet the highest standards. Like Rokeach, Kedem offers many kosher products under
numerous labels including Kedem Grape Juice, Yehuda Matzo, Alprose Chocolates, Avvio
Spices & Dips, Carmel Grape Juice and Oppenheimer Chocolates. It is considered the smallest of
the national brands, but is actively seeking to grow its product line to fuel the company’s growth.
Israeli Manufacturers
New appreciation for Israeli foods over the past several years as result of the unstable and often
bloody Middle East situation has propelled Israeli kosher labels such as Elite, Zoglos and Osem.
While still not nearly as big as the established US national brands, these companies are gaining
traction primarily because of the heightened interest in Israeli foods and unprecedented support
of Israeli products, not only by Jews but also by ordinary consumers. “They seem to want to
express their solidarity with Israel by buying Israel” says one New York retailer. Additionally,
these companies also receive subsidies and grants from the Israeli government. This leads to
lower prices on the store shelves, which provides another competitive advantage to them.
Niche Players
In addition to these direct competitors, Manischewitz competes with other niche players such as
Biscotti and Company, Shick’s Bakery and Brent and Sam’s Cookies, serving only a few kosher
products in certain geographical areas. While these operations are hardly of the same size and
scope of Manischewitz, they fragment the kosher market, nonetheless, and take away market
share and presence from Manischewitz.
Other Competitors
On a much broader level, national and international brands such as Coca-Cola, Maxwell House
and Heinz do not specifically target the kosher market, but their foods have been certified
kosher, thus presenting another kosher alternative to anyone who keeps kosher.
FOOD AND THE NON-ALCOHOLIC INDUSTRY IN THE US16
According to the United States Department of Agriculture (USDA), total food expenditures were
$844.2 billion in 2001, representing an increase of 3.8% over those in 2000. Products for
consumption at home accounted for $443.9 billion in sales and away from home spending totaled
$400.3 billion. Average per capital food expenditures were $2,964 during this period, 2.8%
16
Richard Joy, Standard & Poor’s Industry Surveys Foods and Nonalcoholic Beverages, 5 December 2002, volume
170, no. 49, section 1.
7
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higher than the 2000 average. Away-from-home meals and snacks spending continue to rise.
This category accounted for 47% of the U.S. food expenditures in 2001, an increase from 45% in
1991 and 40% in 1981. See Exhibit 11 for a breakdown of food sales per category.
Retail food prices for both away from home and products for consumption at home purchases
increased by 27.0% over the last 10 years (1991-2001). Away from home food prices rose
26.1% and retail food store prices increased 27.7%. During this same period, the prices of all
goods and services in the Consumer Price Index climbed 30.0%. See Exhibit 12 for a
breakdown of US spending on Food Products in the at-home and away-from-home categories.
As of year end 2001, the top ten publicly traded U.S. food and beverage producers were
responsible for $170.7 billion (20.2%) of the total sales in this category (includes international
sales). Although large food manufacturers do have a great deal of power, the market continues
to remain fragmented. According to US Census data from 1997, there were 21,835 registered
establishments that manufactured food, beverages and kindred products.
Similar to the overall food industry, the U.S. packaged food industry is for the most part highly
fragmented. The average manufacturer that operates in this area is small and produces a limited
product offering for regional or specialized markets. It is also common for regional firms to
produce private label goods for grocery store chains.
Baby Boomers
The rising average age of the US population is affecting the product offerings of food
manufacturers. Baby boomers account for close to 77 million people, 30% of the U.S.
population, which are now between the ages of 37 and 55. Typically, people in this age category
become more concerned with nutrition and weight management since their metabolism is
slowing down and their bodies have a reduced ability to digest food and absorb nutrients. This
shift in consciousness is not as apparent for the baby boomers since increased work and family
obligations have reduced their time available for exercise. This dilemma has created a demand
for new food products that can address these needs.
Food Production Costs:
According to the USDA, 81% of the consumer spending on US farm products is used to pay for
marketing costs. These costs include, but are not limited to, labor, packaging, transportation,
energy, advertising, and promotion. Raw material costs of agricultural commodities accounts for
the remaining 19%. Marketing costs have increased over time due to higher labor costs,
transportation, food packaging materials, and other necessary inputs. The rising volumes of food
and increases in services have also contributed to increased costs in this area. Over the ten year
period, 1990 to 2000, marketing costs for farm products have risen by 57% to approximately
$538 billion.
Packaged food companies are less sensitive to changes in raw material costs since their
businesses focus on value added activities at both the packaging and marketing level. This
makes it easier to maintain margins. These companies also frequently use hedging techniques
that allow them to limit their exposure to fluctuating commodity prices. Marketing costs for
8
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packaged food companies account for a high proportion of the total input costs, but are generally
stable.
Private-label products
Lower priced unbranded products known as private-label or “store brand” goods are a constant
threat to branded products in terms of shelf space and sales. The competition between these
products is amplified during times of economic weakness. Private-label sales in supermarkets
increased from 1995 to 2001 in both sales and volume. Private-label sales in supermarkets
equaled $40.8 billion in 2001, an increase of 5.3% from the previous year. During this same
period, private-label sales in drugstores and mass merchandisers (excluding Wal-Mart) totaled
$3.3 billion and $1.7 billion respectively.
Private label supermarket sales volumes accounted for 20.7% of all units sold in supermarkets,
and 12.5% of the unit sales in drugstores. For the combined volume sales of supermarkets,
drugstores, and mass merchandisers, private-label sales accounted for 19.2% of total unit sales
for 2001, a decrease from 19.6% during the previous year.
Savory Snacks
The US dominates the global snack market (Exhibits 13 and 14). In 2001, the savory snacks
market was growing at a strong rate of 6.8% reaching $21.6 billion, though down from the
previous year. The main drivers of this market are heavily seasoned products and the desire for
convenience. A strong interest by consumers in healthy snacks also contributed to growth,
however, interest has moved away from a low-fat focus to one involving functional benefits
and/or organic ingredients.
Chips and crisps are the leading sector accounting for 23% of value sales in 2001 and achieving
the second fastest review period growth. Though a mature sector, potato chips recorded strong
growth mostly through the introduction of robust, powerful flavors.
Cookies/Biscuits and Crackers Food Category 17
As of 2001, the market size of the cookies, biscuits and crackers category was valued at $10.6
billion. This represents a 1.2% increase from the previous year. Percentage growth in sales in
this area has declined over the last four years by approximately 4%. Many companies in this
industry have been focusing on industry integration programs as the result of recent merger and
acquisition activity over the last year.
Increases in baked goods and bakery product sales can be partially explained by a significant
enhancement of the in-store bakery retail format. This category has also benefited from the
development of healthier biscuit products which have become increasingly sophisticated in
recent years, with a new emphasis on product fortification and vitamin content.
The cookies, biscuits and crackers category consists of sweet cookies and savory biscuits. As of
2001, the sweet biscuits sub-sector represented 59.1% - the majority of this category. Savory
biscuits sales benefited from the increasingly fast paced lifestyle in the U.S., which during the
17
Market Research Monitor: Euromonitor International online database, Major Market Profiles for the United
States.
9
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bullish market years of the late 1990s forced consumers to rely upon portable foods in order to
meet their food needs through snacking.
This category is highly consolidated and therefore very competitive. As a result, companies
must fiercely compete for shelf space through means such as retail slotting fees. Five
companies/brands control 68.4% of the market.
Sweet cookie consumption is highest among men and women 35 to 44 years in age. This age
group is less health conscience and therefore flavor is an important attribute. Marketing efforts
related to sweet and savory cookies target younger consumers as purchasing decisions in this
area are often influenced by children’s preferences. In addition, consumer research has shown
that health conscience consumers often do not consider price to be a significant factor in
purchasing decisions. Due to the higher price and specialty focus of health products, they are
more attractive to affluent and better educated consumers. (See Exhibits 15-19.)
Sector Forecasts
The cookies, biscuits and crackers food category is expected to increase sales by around 2.4%
($10.8B) in 2006. The sweet cookie sub-sector is expected to remain consistent with its current
share of the market and will continue to account for 59.0% in 2006 with a value of $6.4 billion.
Relative to sweet cookie growth, the savory biscuits and crackers sub-sector is expected to grow
at a faster rate, increasing 0.9% in value from 2002 to $4.4 billion in 2006.
SPECIALTY FOOD MARKET
The National Association for the Specialty Food Trade defines gourmet and specialty foods
products as foods, beverages or confections that are of the highest grade, style or quality in their
category. However, it is now recognized that specialty foods encompass a much broader
category than the traditional definition. Traditionally, it has included: specialty baked goods and
cereal-based products; specialty sauces, dressings, vinegars and oils; specialty cereals and pulses
(rice and beans); specialty meats; specialty dairy products; specialty beverages (herbal teas,
specialty juices, nutritionally fortified drinks); herbs and spices; and ethnic foods. Packaged
Facts, estimates that the U.S. gourmet and specialty foods market segment will exceed $54
billion in sales by 2002.18
The United States is becoming increasingly multicultural, with large and diverse ethnic
populations in most major cities around the country. The specialty food sector is profiting from
this diversity. Companies and consumers are exposed to ethnic cuisine and different products. As
specialty foods suppliers add these products, they create a demand that extends beyond the
traditional neighborhood niche that existed a few decades ago. Middle Eastern foods are
expected to grow in popularity in the same way Asian and Mexican foods, flavors and sauces
have in the last few years. The growing cultural diversity of the U.S. population has resulted in
greater demand for diverse ethnic foods, many of which fall under the broad umbrella of
specialty foods.
18
The Specialty Food Market in the United States by the Market Research Centre, Department of Foreign Affairs
and International Trade, June 2001
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Specialty foods that emphasize health awareness are also becoming more common. However,
retailers have found that these products must still advertise themselves as having good taste, in
addition to their healthy attributes, in order to succeed. Specialty foods promoted as being "fat
free" or "low fat" are still widely perceived as being poor tasting. In general, products are selling
on the basis of flavor and indulgence, even as the health factor becomes more significant factor.
Products which emphasize convenience, great taste, and diversity are shaping the growth of the
specialty foods market. A growing number of specialty food retailers are offering easily prepared
or preheated meals in order to compete with restaurants and supermarkets who offer these
products.
Even as the U.S. economy slows, competition in the food industry will increase. This is
particularly true for the specialty food segment, which continues to outgrow the industry as a
whole. The U.S. specialty food market is mature and constantly evolving. Domestic and foreign
competition must both fight for limited shelf space and consumer loyalty. The introduction of a
new product often results in the displacement of an existing one. As a result, distributors and
retailers have significant bargaining power.
The nature of the specialty foods market is such that there are numerous small players offering
distinct product lines. These players frequently focus on regional or cultural segments of the
market, or focus on one distribution channel (e.g. grocery stores but not gift shops). In some
cases, food products that are considered specialty foods in one store or region will be considered
a staple product in another area. (See Exhibit 20.)
Consumers
The U.S. market comprises an estimated 50 million "heavy buyers" of specialty foods. These
buyers can be found in all regions of the country, particularly in the 21 largest metropolitan
areas. The National Association for the Specialty Food Trade (NASFT) has categorized these
heavy buyers of specialty foods as affluent, educated consumers, typically in the late fifty to
early sixty age bracket. In addition, the NASFT found that 55% of U.S. consumers buy their
gourmet foods in supermarkets rather than specialty food stores, although the heaviest buyers
tend to frequent specialty food stores which offer a broader selection of goods. Typically,
customers who buy specialty foods spend more money and purchase more items per shopping
trip. They also tend to make special trips for specialty food products.
FOOD DISTRIBUTION IN THE US
Manischewitz generally uses middlemen distributors to sell its products to retailers. The pricing
for this distribution system is based on three levels of gross margins. The manufacturer
(Manischewitz), the distributor, and the retailer each take 30% gross margins per item.
Manischewitz has contracts with many distributors including RAB’s Millbrook. While many of
Manischewitz’s competitors use distributors as well, some also sell directly to retailers thus
cutting out the middleman and attracting consumers with the resulting lower prices.
The food distribution industry consists mainly of the following types of retail outlets19:
19
Sources: Progressive Grocer's 2002 Marketing Guidebook and Bishop Consulting, 2002
11
Manischewitz
By Store Format
Conventional Supermarket - The original supermarket format, offering a full line of groceries,
meat, and produce with at least $2 million in annual sales. Conventional stores will realize 9%
of their sales in General Merchandise and Health & Beauty Care (GM/HBC). These stores
typically carry approximately 15,000 items; offer a service deli and frequently a service bakery.
An example is Kroger’s.
Supermarkets have consistently accounted for about 80% of all food store sales. However,
during the last several years, supermarkets lost sales to drugstores, discount stores, and
warehouse clubs. To meet these competitive challenges, supermarkets changed their
merchandise mix by dropping duplicated product lines and allocating more shelf space to fast-
moving, non-food items and promotional items. Some supermarkets also have revised their
marketing strategy, shifting some of their advertising dollars from weekly newspaper inserts to
direct mail circulars.
Food/Drug Combo - A combination of superstore and drug store under a single roof, with
common checkout counters. GM/HBC represents at least one-third of the selling area and
approximately 15% of store sales. These stores also have a pharmacy. An example is Duane
Reade.
Convenience Store (Traditional) - A small, higher-margin store that offers an edited selection of
staple groceries, non-foods, and other convenience food items, i.e., ready-to-heat and ready-to-
eat foods. The traditional format includes those stores that started out as strictly convenience
stores but might also sell gasoline. An example is Seven Eleven.
Convenience Store (Petroleum-Based) - The petroleum-based stores are primarily gas stations
with a convenience store. An example is Mobil Mart.
Non-Traditional Grocery
Hypermarket - A very large food and general merchandise store with approximately 180,000
square feet of selling space. While these stores typically devote as much as 75% of the selling
area to general merchandise, the food-to-general merchandise sales ratio is typically 60/40. An
example is Walmart.
Wholesale Club - A membership retail/wholesale hybrid with a varied selection and limited
variety of products presented in a warehouse-type environment. These 120,000 square-foot
stores have 60% to 70% GM/HBC and a grocery line dedicated to large sizes and bulk sales.
Memberships include both business accounts and consumer groups. An example is Sam's Club.
Mini-Club - A scaled-down version of the wholesale club. The mini-club is approximately one-
fourth the size of a typical wholesale club and carries about 60% of the SKUs, including all of
the major food and sundry departments and a limited line of merchandise (soft goods, office
supplies, and opportunistic, one-time buys). Some of these stores do not have membership fees
and often operate as a "cash & carry." An example is Smart & Final.
12
Manischewitz
Supercenters - A large food/drug combination store and mass merchandiser under a single roof.
The supercenters offer a wide variety of food, as well as non-food merchandise. These stores
average more than 170,000 square feet and typically devote as much as 40% of the space to
grocery items. An example is Super Target.
Internet - An Internet-based grocery distribution operator. Included in this format are all Internet
operators who use the Internet as the primary means of accepting grocery orders for home
delivery or pickup. Also included are major food retailers that generate a portion of their sales
through Internet-based sales. Internet suppliers typically offer 12,000 SKUs or more for home
delivery. An example is FreshDirect.
Other - The small corner grocery store that carries a limited selection of staples and other
convenience goods. These stores generate approximately $1 million in business annually.
(Exhibits 23 and 24)
Distribution of Cookies/Biscuits and Crackers
In 2001, Supermarkets and hypermarkets which accounted for 79.9% of the total market were the
most important retail distribution channel for cookies and biscuits products. Though the
discounter category continues to be a small player in this market, it gained market share and
made up 7.9% of market value in 2001. Discounters’ importance has increased over the years
due to the involvement of such players as Wal-Mart and Kroger’s Fred Meyer division.
Independent grocer’s share of the market has continued to fall for the second year in a row
because of lower prices in supermarkets and a shift in consumers’ habits towards out-of-town
shopping centers. Internet retailing, once considered a viable threat during the late 1990s, has
not turned out to be a significant sub-sector in the U.S. with several of the leaders such as
Homegrocer and Webvan going out of business
For further detail pertaining to US distribution, see Exhibits 21 and 22.
MANISCHEWITZ’S MARKETING MIX
Manischewitz is the nation’s largest manufacturer of processed kosher foods and the world’s
number one baker of matzo. According to Integrated Marketing Communications, 40% of the
entire kosher category consists of products related to Passover which are prepared under
stringent guidelines during the holiday season20. The company is attempting to extend beyond its
current specialty foods niche where it markets products under three kosher brands:
Manischewitz, which produces traditional products sold primarily to Jewish consumers, Season,
which produces canned fish and Asian vegetables, and Guiltless Gourmet, which produces
natural and organic snack foods.
In fiscal 2002 spending on marketing and trade promotion represented approximately 5.9%,
Manischewitz’s total revenues. Consistent with its overall business strategy, management
continued to increase spending on advertising, marketing and promotion of Manischewitz'
existing products and new product offerings, including package design costs. Packaging has
20
RAB Holding, Inc. 10K, 6/27/2002.
13
Manischewitz
been updated to better communicate good taste and high quality, enhance visibility on store
shelves and attract a broader spectrum of Jewish and non-Jewish consumers. Manischewitz has
introduced no-fat and low-fat items to reinforce the positive health aspects of its products.21
Manischewitz markets a number of co-packed products, including cookies, confectionery
products, noodles, pasta, tortilla chips, salsa, condiments, dry soup mixes and canned fish. The
company expects to continue to employ co-packers as a capital efficient means of bringing its
new products to market. Co-packed products generated approximately 52.3% of Manischewitz'
total revenues in fiscal 2002, 2001 and 2000, respectively.22
Manischewitz has licensed its name to the Manischewitz Wine Company for decades. Such
licensing has had the double benefit to Manischewitz of bringing in extra revenue as well as
growing brand awareness and brand equity for the food company. In fact, the still-recognized
slogan of “Man-o-Manischewitz!” comes primarily from 30 year old wine advertising. Income
from licensing represents 2% of the company’s revenues.
As a subsidiary of RAB Holdings, Manischewitz believes that it has effectively positioned in the
kosher market. Although the company has been in existence for over a century, management has
recently implemented innovative marketing strategies creating a dominant force in the
marketplace. In an attempt to break away from the current limited association, management has
altered its strategy in an effort to move its products from the kosher aisles into mainstream
product sections. The introduction of products with wider appeal such as noodles, soup mixes,
and snack crackers combined with improved packaging and radio advertisements has allowed
Manischewitz to target non-Jewish populations. Manischewitz conducts push marketing
programs, such as offering off-invoice discounts to distributors. Integrated Marketing
Communications, Inc. and Packaged Facts have discovered an increase in sales of kosher foods
to non-Jewish customers which is a direct result of increased awareness of the quality of these
specialty foods along with an increasing trend toward consumption of healthier foods for
healthier lifestyles. Eighty percent of the non-Jewish population recognizes the brand name and
50% have tried the products according to Manischewitz. Product management is focusing on
increasing the 50% penetration rate of non-Jewish consumers.23 Manischewitz’s display of
crackers, noodles, soups and side dishes in the non-kosher supermarket aisles has allowed the
company to enhance current product awareness among non-Jewish consumers.
Continued expansion into the kosher market is a critical aspect of Manischewitz’s strategic focus
with key new product launches. Innovative kosher products such as extra moist chocolate cake
mix and thin wheat matzo are a few examples of recent market introductions. According to
Manischewitz management, 100% of the Jewish population recognizes the brand name and 90%
have tried the product line.24 In an effort to remain competitive, product management seeks
innovative product launches that will help retain this solid customer base driven by brand
loyalty.
21
RAB Holding, Inc. 10K, 6/27/2002.
22
RAB Holding, Inc. 10K, 6/27/2002.
23
RAB Holding, Inc. 10K, 6/27/2002.
24
RAB Holding, Inc. 10K, 6/27/2002.
14
Manischewitz
The current consumer awareness figures are a direct result of RAB Holdings increase in selling
and general administrative expenses by $1.6 million (SG&A expenses for the year ended
March 31, 2001 were $90.1 million, as compared to $72.9 million for the year ended March 31,
2000).25 These expenditures were channeled toward radio advertising, promotional materials,
and market research primarily allocated to mainstream products.
Manischewitz primarily sells its product line through independent distributors of which its two
largest distributors represent 39.4% of its 2002 revenues.26 One of the two distributors is
Millbrook Distribution Service, a kosher distributor that has provided Manischewitz with an
instant national network of experienced and well positioned distributors within their core market
segment. Millbrook is Manischewitz’s second largest distributor behind Gourmet Award Foods,
a bittersweet benefit that has caused some discomfort amongst the existing distribution network.
Manischewitz has a presence throughout the 50 states and international penetration in Europe,
Australia, South Africa, and South America. Major distributors such as Haddon House and
Gourmet Award were fearful that the recently formed alliance with Millbrook would disrupt
existing business. To date that has not been a major issue with the exception of strained
relationships this competitive pressure has created. Fortunately, Manischewitz’s focus on
mainstream markets has helped alleviate this arising issue and discount stores such as Wal-Mart
have already begun stocking portions of the Manischewitz’s product line.
Retailers favor specialty foods as they typically generate higher margins than mainstream
grocery products. The trend in the US towards consumption of specialty products has increased
demand for Manischewitz foods. This trend has resulted in increased shelf space for specialty
food items and aggressive promotion of these items by manufacturers in an effort to increase
market share. Manischewitz has benefited from minimal or no slotting fees associated with their
placement in the specialty food aisles. As Manischewitz expands their product offerings and
looks to mainstream product penetration, management must determine if it should exploit the
cost effective kosher aisle placement or incur additional fees in order to compete within the main
grocery aisles.
Supermarkets represent approximately 90% of total revenues for Manischewitz with the five
largest supermarkets being Kroger, Publix, Shop Rite, Albertson’s and Royal Ahold. 27 Outside
of the supermarket arena, Manischewitz takes pride in its dominance of the Greater New York
market. Recently major changes have been made within the greater New York area, an area
where many of these kosher producing companies were created. The trend towards
consolidation began with the collapse of Future Foods, the failure of Kolpen Distributors and
KDI Specialty Foods, and the acquisition of Millbrook by RAB Holdings. This consolidation
has affected the competitive nature of this marketplace as fewer distributors provide
manufacturers and retailers fewer choices and limited leverage when it comes to pricing. The
remaining 10% of revenues are generated from mass merchandisers and small specialty stores.
25
Ibid.
26
“The $4 Billion Industry”, KosherToday.com, May 2002
27
The B. Manischewitz Company, www.manischewitz.com
15
Manischewitz
ISSUES
The pressure was on. Mr. Bevilaqua needed to use the information available to figure out the
best long term strategy for the Manischewitz brand. Should the company try to appeal to the
non-Jewish customer? If so, he had to determine which products would appeal to other groups?
Could Manischewitz improve its distribution so that consumers could pay lower prices while still
allowing the Company to maintain its current margin level? Should Manischewitz pay slotting
fees to compete in the main grocery aisles or should it be happy with its free space in the kosher
aisle? How could Manischewitz use its brand equity of the past 100 years to grow its business in
the future? These are just a few of the critical issues which needed to be solved.
16
Manischewitz
APPENDIX
Exhibit 1
Organization Chart
RAB Holdings, Inc.
Richard Bernstein, President
B. Manischewitz Company, LLC
Bruce Glickstein, President
Purchasing Sales Marketing Operations
Victor Bevilaqua, Vice President
Season Brand Manischewitz Brand Guiltless Gourmet Brand
Seth Epstein, Brand manager Brand Manager position vacant Daniel Berkowitz, Brand Manager
17
Manischewitz
Exhibit 2
Manischewitz Products vs. Competitors’ Products
Product Types Manischewitz Product Price / Qty Competitors’ Product Price / Qty
Passover Matzo
$3.19 / $3.09 /
10 oz. 11 oz.
Soups
$2.79 / $2.19 /
10.5 oz. 10.5 oz.
Borscht & Schav
$2.69 / $2.39 /
33 oz. 33 oz.
Gefilte Fish
$8.09 / $6.69 /
24 oz. 24 oz.
18
Manischewitz
Exhibit 3
Kosher Certification Organizations
Young Israel of The Scroll K Rabbinical Council
West Hempstead Vaad Hakashrus of of New England
Denver
Kashrus Laboratories Chicago Rabbinical
Council Various Governing
Authorities
Orthodox Jewish Kosher Overseers Tablet-K
Congregations of Associates
America of America
Star-K Kosher Jewish Community "Star-K" Kosher
Certification Council of Montreal Certified
Kosher Services U.S. Kosher Supervision KOF-K Kosher
Supervision
Vaad Ha'ir of Winnipeg Manchester Beth Din Vaad Hakashruth of the
Capital District
Ko Kosher Service Congregation Shaarie Kosher Supervision
Torah Service of America
Igud Hakashrus of Los Metropolitan Kashruth Rabbi J.H. Ralbag
Angeles Council of Michigan
Kosher Certification Orthodox Jewish Council
Service Kosher Technical
Konsultants
Springfield Vaad Kashrus Council of
Hakashruth Toronto
Source: http://www.traderjoes.com/products/brochures/kosher_east/symbols.html
Exhibit 4
Rank-Ordered Metropolitan Statistical Areas
By Jewish Population, 2001
Source: American Jewish Year Book, 2002
Rank Metro Area Estimated Jewish % % Share of
19
Manischewitz
Jewish of Total US Jewish
Population Population Population
1 New York - Northern NJ - Long Island, NY - NJ - 2,051,000 9.7 33.3
CT – PA
2 Los Angeles - Riverside - Orange County, CA 668,000 4.1 10.9
3 Miami - Ft. Lauderdale, FL 331,000 8.5 5.4
4 Philadelphia - Wilmington - Atlantic City, PA - NJ - 285,000 4.6 4.6
DE – MD
5 Chicago - Gary - Kenosha, IL - IN – WI 265,000 2.9 4.3
6 Boston - Worchester - Lawrence, MA - NH - ME – 254,000 4.4 4.1
CT
7 San Francisco - Oakland - San Jose, CA 218,000 3.1 3.6
8 West Palm Beach - Boca Raton, FL 167,000 14.8 2.7
9 Washington, DC – MD - VA – WV 166,000 3.4 2.7
10 Baltimore, MD 106,000 3.9 1.7
Exhibit 5 Food Preferences of Various Ethnic Groups
Hispanics Asian Americans African Americans
Corn Rice Greens
Legumes Noodles Roots
Rice Vegetables Legumes
Chiles Fruits Corn
Vegetables Sauces Rice
Fruit Seafood Seafood
Seafood Poultry Poultry
Poultry Pork Pork
20
Manischewitz
Exhibit 6
rs
Source: Integrated Marketing Communications, 2002
Exhibit 7
Source: Integrated Marketing Communications, 2002
21
Manischewitz
Exhibit 8
Source: Integrated Marketing Communications, 2002
Exhibit 9
Source: Integrated Marketing Communications, 2002
22
Manischewitz
Exhibit 10
Source: Integrated Marketing Communications, 2002
Exhibit 11
Food Industry Historical Sales (200-2002) and Forecasts (2003-2004) by Category – by US
Dollar Sales and Tons
2000 2001 2002 2003 2004
Meat (US$ mn) 75,783 80,850 84,414 90,107 95,083
Meat ('000 tons) 24,195 24,326 24,599 24,955 25,227
Fish (US$ mn) 10,612 11,307 11,948 12,839 13,823
Fish ('000 tons) 1,329 1,350 1,369 1,396 1,428
Fresh Produce (US$ mn) 46,353 49,395 51,825 55,504 59,352
Organic Products (US$ mn) 7,760 10,113 15,308 20,320 25,671
Packaged food (US$ mn) 252,283 262,301 271,088 283,492 293,843
Confectionery (US$ mn) 24,154 24,637 25,162 26,018 26,829
Confectionery (tons) 2,929,125 2,942,330 2,947,750 2,958,784 2,982,879
Bakery products (US$ mn) 58,55 59,799 60,859 62,782 64,207
Bakery products (tons) 12,670,733 12,661,123 12,674,375 12,731,161 12,811,971
Ice cream (US$ mn) 12,297 12,914 13,308 13,960 14,669
Ice cream ('000 liters) 3,806,393 3,779,414 3,871,541 3,930,725 3,972,309
Dairy products(US$ mn) 44,491 46,183 47,791 50,084 51,927
Savory snack (US$ mn) 20,170 21,550 22,635 23,722 24,569
Savory snacks (tons) 2,733,466 2,785,283 2,858,302 2,888,932 2,922,620
Canned food(US$ mn) 16,623 16,903 17,282 17,892 18,352
23
Manischewitz
Canned food (tons) 6,233,151 6,174,845 6,142,193 6,135,899 6,133,616
Frozen food (US$ mn) 21,876 23,426 24,826 26,559 27,915
Frozen food (tons) 3,729,475 3,828,695 3,950,804 4,052,244 4,120,063
Dried food (US$ mn) 9,599 9,835 10,103 10,485 10,776
Dried food (tons) 2,747,435 2,762,243 2,778,621 2,798,059 2,819,373
Chilled food (US$ mn) 16,688 17,602 18,598 20,101 21,584
Chilled food (tons) 2,715,858 2,779,549 2,850,805 2,953,892 3,065,282
Oils and fats (tons) 1,334,426 1,276,231 1,270,920 1,263,526 1,254,340
Oils and fats (US$ mn) 4,541 4,79 4,907 5,033. 5,122
Spreads (tons) 547,033 557,715 566,249 571,265. 575,882
Spreads (US$ mn) 2,544 2,621 2,688 2,778. 2,844
Snack bars (US$ mn) 2,039 2,268 2,450 2,619. 2,751
Snack bars (tons) 160,530 171,668 180,477 187,450 193,772
Sauces, dressings(US$ mn) 13,227. 13,613 13,945 14,524 15,051
Sauces, dressings (tons) 2,399,902 2,367,901 2,355,840 2,350,410 2,347,043
Baby food (US$ mn) 4,500 4,732.64 4,986.11 5,255 5,458
Baby food (tons) 1,106,125 1,129,500 1,146,008 1,159,978 1,169,451
Note: the packaged food market is less than the sum of its sectors because some products appear in more than one
sector, eg canned soup is included in soups and canned food. Historical value data is shown at current prices
Exhibit 12
U.S. Spending on Food Products (in billions of dollars)
Food Expenditures % of Total
Away From Away From
Year At Home Home Total At Home Home
2001 437.0 366.0 803.0 54.4% 45.6%
2000 424.2 348.8 773.0 54.9% 45.1%
1999 409.2 331.0 740.2 55.3% 44.7%
1998 384.6 315.3 699.9 55.0% 45.0%
1997 370.5 298.4 668.9 55.4% 44.6%
1996 360.8 285.7 646.5 55.8% 44.2%
1995 345.4 276.7 622.1 55.5% 44.5%
1994 336.5 266.4 602.9 55.8% 44.2%
1993 322.7 254.4 577.1 55.9% 44.1%
1992 313.4 240.1 553.5 56.6% 43.4%
1991 321.8 246.4 568.2 56.6% 43.4%
1990 308.3 239.3 547.6 56.3% 43.7%
1980 179.7 103.1 282.8 63.5% 36.5%
1970 74.8 33.8 108.6 68.9% 31.1%
1960 50.3 16.2 66.5 75.6% 24.4%
1950 33.8 10.1 43.9 77.0% 23.0%
Source: Standard & Poor’s Industry Surveys, Food & Nonalcoholic Beverages, December 5, 2002.
24
Manischewitz
Exhibit 13
Market Sector Breakdown for Savory Snacks Category
US$ millions
Sectors 1997 2001
Chips/crisps 3,891.0 4,959.1
Extruded snacks 2,098.2 2,361.8
Nuts 1,363.4 1,895.1
Other 8,788.4 12,334.7
Source: Euromonitor
Exhibit 14
Savoury Snacks Share of Market
PepsiCo (Frito-Lay) 47.0
ConAgra Inc. 5.9
Private Label 4.3
Philip Morris (Nabisco/Kraft) 3.8
Procter & Gamble 3.0
General Mills 2.7
Source:EuroMonitor, Savory Snacks in the USA, September 2002
Exhibit 15
Cookies/Biscuits and Crackers Market Size 1997-2001
Sales (US$
Year Percent Change
mm)
1997 9,211.50
1998 9,686.50 5.16%
1999 10,115.00 4.42%
2000 10,467.00 3.48%
2001 10,592.50 1.20%
Source: Euromonitor
Exhibit 16
Cookies/Biscuits and Crackers Market Sectors 1997-2001
Sectors 1997 % 2001 %
Savory biscuits 3,605.60 39.14% 4,332.80 40.90%
Sweet cookies 5,605.90 60.86% 6,259.70 59.10%
Source: Euromonitor
Exhibit 17
Cookies/Biscuits and Crackers Share of the Market
Companies/Brands 2001
Nabisco Holding Co 38.0%
Keebler Corporation 18.0%
Private label 8.3%
Campbell Soup Company 6.9%
Parmalat 4.0%
Lance Inc 1.5%
Source: Euromonitor
25
Manischewitz
Exhibit 18
Cookies/Biscuits and Crackers Distribution
Channels 2001
Super/hyper markets 79.90%
Discount stores 7.90%
Independent food retailers 6.00%
Others 4.90%
Convenience and variety stores 1.30%
Source: Euromonitor
Exhibit 19
Cookies/Biscuits and Crackers
Consumer Profile - % Consuming Within The Last 30 Days (2000)
Sectors/Categories Sweet Cookies
18-24 60.5
25-34 69.5
35-44 72.2
45-54 67.5
55-64 67.4
65+ 60.5
All female homemakers 57
Source: Euromonitor
Exhibit 20
Purchases of Selected Specialty Food Products by 50% of Consumers
Food Product Sales (%) Food Product Sales (%)
Rice/Beans 85 Crackers 81
Pastas/Sauces 83 Olive Oils 80
Cookies 83 Teas 80
Mexican Foods/Sauces 82 Asian Foods/Sauces 73
Salad Dressings 81
Source: Specialty Food Distributors and Manufacturers Association. The Specialty Food Distribution Channel.
Downloaded from http://www.specialtyfoods.org. January 18, 2001.
Exhibit 21
US Distribution Channels
Number of Stores
2001 Number of Stores 2001 % of Total
Supermarkets ($2,000,000 + ) 32,265 100.0
Chain Supermarkets 21,108 65.4
Independent Supermarkets 11,157 34.6
Grocery/convenience/gas stores 125,000 N/A
Wholesale Club Stores 910 N/A
Military Commissary 196 N/A
Source: Progressive Grocer
69th Annual Report of the Grocery Industry – April 2002
26
Manischewitz
Exhibit 22
US Distribution Channels
Grocery Sales
2001 $ Sales Billions 2001 % of Total
Supermarkets ($2,000,000 + ) 398.2 100.0
Chain Supermarkets 326.2 81.9
Independent Supermarkets 72.0 18.1
Grocery/Convenience/Gas Stores 90.0* N/A
Wholesale Club Stores 25.7* N/A
Military Commissary 3.6* N/A
Source: Progressive Grocer
69th Annual Report of the Grocery Industry – April 2002
Exhibit 23
Manischewitz Advertisement from the 1950s
27
Manischewitz
Exhibit 24
Historic Manischewitz Images
28