KOSHER BENEFITS

In the past two decades, the demand for kosher food products in the United States and around the world has greatly impacted the food industry. Studies have confirmed a direct correlation between kosher certified food and increased sales, as seen in the article below.

"Kosher-Food Firms Dive Into Mainstream" Hwang, Suein L., Wall Street Journal, April 1, 1993, at B1.

Long associated with matzo and gefilte fish and the staples of the Passover Seder, kosher-food companies are looking beyond their traditional Jewish customers to the mass marketplace.

Among the results: kosher linguine and kosher frozen pizzas.

Meanwhile, some giant food marketers have latched onto the kosher seal as a new way to position products as wholesome to the general public.

Among the results: kosher frozen yogurt and kosher baby cereal.

Within the next year, to cite a specific example, kosher hot-dog maker National Foods Inc. and its new parent, conglomerate ConAgra Inc., are expected to launch a line of prepared foods under a banner uniting National's Hebrew National and ConAgra's Healthy Choice brand names. "We have a vision of being a kosher-food conglomerate,"" boasts Harvey Potkin, president of National Foods, which ConAgra acquired in January.

But ConAgra isn't throwing its marketing might behind chopped liver. Products being considered for the line include a new frozen dinner. ""ConAgra believes there's tremendous potential for a kosher-food line for mainstream America,"" says Mr. Potkin. About 60% of Hebrew National's frankfurter customers aren't Jewish.

Many old-line kosher-food companies, however, have been slow to catch the trend and have failed to aggressively capitalize on demand in the wider marketplace. Indeed, sales for the biggest brands on the Seder table were lackluster last year, according to national sales data compiled by Information Resources Inc.'s InfoScan service. In the year ended Feb. 28, unit sales for matzo monarch Manischewitz Co. were down 3.2% and those of rival Aron Streit Inc. were flat. Both companies registered 3% gains in dollar sales because of price increases on most key products. Gefilte-fish marketer Rokeach Foods Co. saw sales slide 2.8% to $12.4 million.

Sales of National's Hebrew National premium-priced hot dogs, sausages and deli products rose a slight 2%, which the company attributed to the recession. The standout in the crowd was Empire Kosher Poultry Inc., a kosher-chicken company that has aggressively diversified into such secular fare as kosher frozen pizzas and prepackaged luncheon meats. Last year, Empire's sales jumped 14% to $7 million. ""Health-conscious non-Jewish consumers are definitely a growing part of our business,"" says Birgitta Wade, director of advertising. ""We ran some advertising in Eating Well magazine last year, and the phones were ringing off the hook."

Just because a food is kosher doesn't mean it's automatically healthful, however. Kosher food is checked to make sure it adheres to the kashrut, a complex system of dietary laws. Some of the guidelines -- such as those that dictate close inspection of animal carcasses -- could have some bearing on the quality of the food. But many others -- those banning shellfish, for example -- have little significance to the general population.

Still, marketing experts say that the general public, dissatisfied with government food inspections, increasingly sees kosher certification as a quality check. ""Kosher is the Good Housekeeping Seal of the 1990s,"" declares Joe Regenstein, an official of the National Kosher Foods Trade Association.

Some of the biggest names in the food business are responding. For while American Jews number only six million, their higher-than-average incomes and concentration in crucial major markets make them sought-after targets for national brands. Gerber Products Co., for example, recently acquired the kosher designation for its dry baby cereals; the move was part of an effort to boost sales on the East Coast with its large Jewish population.

In an internal study, Dannon Yogurt Co. found that a kosher label placed on a number of its products in late 1990 will directly contribute $2 million in sales annually. The study further concluded that the symbol helped Dannon gain shelf space in smaller stores and generated free publicity in Jewish media.

The number of kosher-certified products has swelled to 23,600 from 18,000 in 1989, according to Menachem Lubinsky of Integrated Marketing Communications Inc., a Jewish-marketing firm.

With kosher labels going on new food items every week, the size of the business is hard to quantify. According to Mr. Lubinsky, the kosher marketing consultant, U.S. sales of all products bearing the kosher seal totaled $35 billion in 1992. By contrast, sales to consumers who specifically seek out kosher products were $2 billion.

Established kosher companies are scrambling to diversify before bigger competitors shut them out of ripe new marketing opportunities. Gefilte-fish sales ""may go down a little, but other items will take its place,"" predicts Irwin Kralstein, senior vice president of sales at Rokeach. His company is betting on its new line of kosher pastas to take up the slack. ""Older people are dying off, and the younger generation is looking for newer, more creative items."

Also under pressure is Manischewitz, the Kohlberg & Co.-controlled concern that industry executives say has just begun to show signs of life under a new president. After its 1991 settlement with the government over allegations of matzo price-fixing, the company lay dormant for a time and was perceived as overly dependent on traditional Passover items. ""People there were working in an older time and perhaps a slower time,"" says Ruth Folger Weiss, creative director of Ad Lib Unlimited, a kosher-food marketing firm.

But changes are afoot, according to Robert Kroll, the RJR Nabisco Holdings Corp. executive who became president of Manischewitz a few weeks ago. He says the company is working to broaden its appeal to the non-Jewish population. ""I think there's a renewed commitment to accelerating growth,"" says Mr. Kroll. As evidence, he points to Manischewitz's current market test of a kosher bagel chip.

While they eye wider markets, kosher-food company executives are wary of eroding their traditional base of Jewish support as they diversify. ""There's always the risk of trying to do too much with the name,"" says one industry observer of the changes under way at Manischewitz.

Even the ambitious Mr. Potkin worries a little about the Hebrew National/Healthy Choice mix. ""We have to take a hard look at whether or not the line is acceptable to consumers or confusing,"" he concedes. ""Yes, there's the opportunity to mainstream a lot of kosher products, but the price and quality have to be acceptable to the mainstream population."

Kosher food may be considered to enforce more rules and regulations regarding food hygiene due to the fact that certain animals and animal products are not allowed to cross-contaminate any ingredients throughout the manufacture and distribution processes.

Kosher food also restricts cross-contamination between meat and dairy ingredients, and therefore it is easy to identify products that contain dairy and which do not.

Kosher food is very carefully supervised throughout all processes of manufacture and distribution by a professional and trust-worthy expert before being certified as a Kosher product. If there is any cross-contamination in the process the product will no longer be permitted to show the Kosher seal on their product packaging and information.