Strauss enters the milk substitute market: will establish a new plant for the production of fresh vegetable milk
Posted on Jan 14, 2021 by Ifi Reporter
Strauss enters the milk substitute market: will establish a new plant for the production of fresh vegetable milk and its products (yogurt, delicacies, etc.) of the Alpro brand, with a huge investment of NIS 150 million. The plant, which will cover 4,000 square meters not far from the Strauss dairies in Ahihud (near Karmiel), will employ one hundred workers. Construction of the plant will begin soon. The market expectation is that local production will cause a price drop.
The vegetable dairy market in Israel currently generates about NIS 426 million a year, compared to NIS 9 billion in the entire dairy market, so that Strauss' large investment in the plant is a "statement" of its confidence in significant future growth in the field.
This is one of the fastest growing categories in the world, which recorded a 36% growth in Israel since 2019, according to Sterncast. The source of growth is not necessarily in vegans, but more and more consumers who, in addition to animal welfare, choose vegetable milk for health reasons, as well as due to sustainability and conservation values (the dairy industry is considered particularly polluting due to the many greenhouse gases emitted by cows). -11%.
Establishing a food factory of this magnitude has become rare in the industry; Strauss itself opened its last plant (Ahihud Dairy, which replaced the dairy in Nahariya) about 20 years ago. The last major investment in the field was about three years ago, when Osem established the new Bamba plant in Kiryat Gat with an investment of about NIS 100 million, but it was a relocation of an existing plant, while now it is a new plant in a category that has not yet been created by Strauss.
Alpro is the world's leading producer of plant-based dairy products and is owned by Danone, a partner (20%) in Strauss Dairies. The brand franchise moved from Stowitz to Strauss about a year ago, and half a year ago marketing began through it. Until now, Alpro products marketed in Israel were durable and sold on the regular shelf, and the new plant will make it possible to produce fresh plant products, which will be marketed in the refrigerator - the preferred option for consumers and one that exposes the products to regular dairy consumers.
The establishment of the plant is a declaration of war and a threat to Tnuva, which through the "Alternative" brand controls the vegetable milk market in Israel, with a market share of about 57% compared to only 18% of Alpro today. Tnuva was among the first to discover the potential of the category, which is a significant growth engine for it. She enjoyed the advantage that her products were the only ones marketed as fresh in the refrigerators, but a year ago Tara also entered the refrigerators with VALSOIA's herbal drinks from Italy, which are sold under the Tzuriel farm brand.
Strauss began its steps in the world of plant products several years ago, when it entered into a partnership with a start-up that developed the delicacies "Som" and "Ufix". "We intend to be a significant player in the vegetable dairy market, this is a statement of intent," Eyal Dror, CEO of Strauss Israel, told Mammon and Ynet.
"Strauss and Yotvata dairies were and will be at the heart of the business, but alongside this we see the development of a new world, and we decided to establish a new plant because we see a future for this world. We will bring new technologies, and the plant will have durable and fresh products In Israel. "