Opportunities in Israel

Israel’s appetite for UK Food & Drink products has grown significantly in recent years, and with the impact of COVID-19 shaping new consumer trends throughout the population, opportunities for UK suppliers looking to export to the country looks set to increase further.

We sat down with Ronee Isaacson, based in the British Embassy in Tel Aviv, to find out more about the Israeli market, the current Food & Drink trends and what companies should expect when selling to Israel.

Hi Ronee. Thanks for taking the time to speak with us about the Israeli market. Can you give our members some background on yourself and how the British Embassy in Israel supports UK businesses looking to trade in market?

I’ve recently joined the British Embassy in Israel as a Senior Trade & Investment Adviser where my role is to promote trade from the UK to Israel and to keep British companies informed about the current opportunities in Israel across all sectors.

I left the UK 18 months ago and I certainly appreciate that I can buy good quality UK tea and chocolate here. However, there are still too many products I need to pack in my suitcase from the UK which I think would have wide appeal to the Israeli market.

The food and drink industry has always been a focus for our Embassy due to the huge demand for UK products here in Israel. There is already a great range of UK products such as Wilkin & Sons, Dorset Cereals, Ryvita, Bute Island Sheese, Eat Real Snacks and many others, but there is definitely still scope for further growth!

We help companies right the way through the export process, helping advise on current market conditions and making introductions to trusted importers who can assist companies navigate through the import, regulatory, and licencing process with the Ministry of Health. We’re dedicated to supporting companies with any issues or questions they may have and it’s always great to hear from new companies looking to export to Israel.

Can you give us an overview of the Israeli Food & Drink market opportunities?

Israel is continuing to grow as an export market for UK companies – according to the official figures published by the Israel Central Bureau of Statistics, annual British exports to Israel have grown steadily in the past few years, from £2.16 billion in 2016 to £2.50 billion in 2019 (ONS, 2019).

The Food & Drink sector is no exception! Israeli importers view the UK as a key market, meaning there is plenty of potential for British Food & Drink suppliers who are looking to break into Israel.

Recently there has been growing demand for organic, vegan and non-dairy food and protein and milk substitute products. There has been also significant growth in premium categories, which has grown at a higher rate than market growth by about 40% to NIS (New Israeli Shekel) 2.3bn according to Israeli market analysts StoreNext.

Israel took a significant step forward last year to ensure that consumers understand the nutritional value of the food and drink products they buy. From 1 January 2020 products have been required by law to be clearly labelled with a ‘traffic light’ system to disclose if they are high in sodium, sugar and/or saturated fats.

Has COVID affected the Food & Drink trends in Israel? Do you anticipate that the country will be back to normal soon?

Due in part to Covid-19, 2020 saw a record growth of 9.2% in Food (3x faster than in 2019 increasing sales by NIS 4.4bn) and 10.4% growth in Alcoholic Beverages. With the hospitality sectors closed due to the pandemic, there was unsurprisingly a 20% growth in cooking and baking categories, and a significant growth in the sales of products which are normally consumed outside of the home such as alcoholic beverages and espresso coffee. [Source: StoreNext]

As I am sure you have seen in the press, due to Israel’s highly successful vaccination campaign, the economy is starting to open up. Restaurants are now open based on a ‘Green Pass’ system, allowing vaccinated/recovered individuals to sit inside. It is too early to say yet what the impact of this will be on the Food & Drink sector, but the signs are good that we are now in post-Covid recovery of the economy.

Many of our UK Sellers on UK’s Finest may want to know how difficult it is to start exporting to Israel. What things do our companies need to think about when targeting the market?

As with many international markets, working with a good importer is key and they can guide you through the process. Israel and the UK have a Free Trade Agreement which provides preferential/zero tariffs across a number of different food products.

Products such as dairy and eggs (or products that contain them) need special ‘sensitive food’ approval from the Ministry of Health, and require shipment checks. These are issues your importer will be able to assist with.

Israeli society is very diverse but for practical reasons the main supermarkets only stock Kosher food (which makes up 80% of the market). This is why many global food producers will choose to get their product Kosher certified when looking to sell into Israel.

We always advise companies looking to get their products certified to also consider other export markets where there is a sizeable Kosher market – such as North America, France, Mexico. According to a 2014  study, in North America 41% of all food and drink products on supermarket shelves are Kosher certified. The worldwide Kosher market was valued at $19.1 billion in 2018, and is set to grow to $25.6 billion by 2026.

How do businesses become Kosher certified?

Kosher certification means that your food is certified as conforming to the Jewish dietary requirements. There are a number of requirements, the most commonly known is that milk and meat products cannot be produced or consumed together. At the British Embassy we work closely with the UK Kosher authorities who have extensive experience of helping companies achieve certification.

How does conducting business in Israel compare to the UK?

Israel is only 2 hours ahead of the UK, and usually most Israelis do not work on Friday afternoon and Saturday, however Sunday is a normal working day. Most Israelis have a good level of written and spoken English.

Israelis are pretty straight talking which can come as a bit of a shock to the British, so don’t feel shy to be direct! Once a relationship is built Israelis are also very warm and welcoming, so don’t be surprised, once in-person travel is permitted again, to get an invite over for lunch or dinner!

You mentioned about visiting buyers in person, but while international travel is still off the cards, do you have any tips on how to build relationships via platforms such as UK’s Finest, virtual meetings and email?

I would encourage both buyers and sellers to connect with as many contacts on platforms such as UK’s Finest.

Here at the British Embassy in Tel Aviv we have already added 4 Israeli buyers to UK’s Finest, so I’d recommend taking a look to see if these buyers are of interest. If they are, and you have established a connection on the platform, then set up a video call. While virtual meetings aren’t a complete substitute for in-person ones, it’s the best starting point to build the business relationship.

With both Israel and the UK making great progress with vaccination programmes, when travel is possible, we would suggest coming to Israel to meet with buyers face-to-face, as personal connection is the basis for forming a long-term business relationship in Israel.

Many thanks Ronee, Israel sounds like a great market with plenty of potential for our UK’s Finest members.

If you are interested in exporting your products to Israel, take a look at the 4+ buyers that are already on UK’s Finest Marketplace and start connecting today.

Products of interest for these buyers include Organic, Vegan, Healthy Snacks, Baby & Toddler foods, Cereals & Bars, Non-Alcoholic and Alcoholic Drinks, Nutraceutical, Health & Supplements, Sauces & Chutneys, Tea & Coffee.