Kosher Sales Growth Slowing

JULIE GALLAGHER

SECAUCUS, N.J. — Retailers can jump-start the kosher food segment's slowed momentum by promoting kosher ingredients and frozen foods, Menachem Lubinsky, president of Lubicom Marketing and Consulting, Brooklyn, N.Y., told attendees during a keynote presentation at last week's Kosherfest here.

“The kosher consumer is no longer Sadie, the old grandmother with the shopping cart — it's a younger consumer with a Lexus parked outside,” he said. “He's fast-moving, looking for pizzazz and would love to have every product that is popular be kosher; he's not afraid to experiment, loves new products, and his wife has multiple cookbooks.”

Retailers interested in catering to these consumers, while attracting members of what's referred to as the “crossover market,” should feature products on endcaps positioned outside of segregated kosher sets.

“Don't just limit promotions to Passover,” said Lubinsky.

Israeli products have been the focus of many recently launched efforts, he said.

Although kosher food sales fell short of the double-digit growth they'd experienced in previous years, the segment's sales rose 8% to 10% during the past year, according to Lubinsky. He noted anecdotal evidence suggesting that kosher shoppers are changing their purchasing habits.

“The large discount chains — the Costcos, the Wal-Marts, the Sam's Clubs — are on the radar screen of today's kosher consumer,” Lubinsky said. “If you walk into a Brooklyn Costco on a Thursday, you'll see an incredible number of Hasidic and Orthodox Jews, and they were not shopping there a year or two ago.”

Kosher supermarkets are also appealing to members of the demographic.

“They've made a remarkable comeback in the last couple of years in several key markets,” Lubinsky said.

In July, a kosher supermarket called Pomegranate opened in Brooklyn. Boasting three kosher kitchens, the 20,000-square-foot store merchandises only kosher products.

Likewise, H.E. Butt Grocery Co. began catering to San Antonio's kosher community weeks ago when it opened H-E-B Alon Market. “Alon” means “oak” in Hebrew.

The 128,000-square-foot store is H-E-B's third location to merchandise an extensive selection of kosher foods, David Martinez, manager of H-E-B's Houston store, told SN on the show floor. He and three colleagues were scouting out dry groceries, frozen foods, bread, meat, deli items and general merchandise to add to their respective kosher sets.

“The kosher products that are around this year may become unavailable next year, so we're looking to replace those,” said Martinez.

Of particular concern is the availability of kosher meat, he added.

The capacity of Agriprocessors, of Postville, Iowa, the nation's largest kosher meat supplier, dropped by about 30% after it lost 400 skilled workers due to immigration issues in May. Previously it had processed 60% of U.S. kosher beef and 40% of the country's kosher poultry.

But even when supplies are abundant, sourcing kosher can prove challenging, noted Martinez. “A mainstream company like Del Monte will come to you and say, here's what we've got, but with kosher suppliers it doesn't work that way,” he said. “So we come to shows like these, and sometimes it's a strikeout and sometimes it's a home run.”