Six months after the World Health Organization classified processed meat as a carcinogen, processed meat products have yet to recover. Storenext figures seen by “Globes” showed a stark 27.1% financial drop in sausage and hotdog sales between January and April.
The manufacturers have lost more than NIS 90 million, at market price. The sharpest plunge was in deli sales (-32.2%), though hotdogs suffered a similar hit (-31.9%). Sales of cold cuts dropped 21.1% since the beginning of the year, with dry sausages not far behind.
The production of processed meat is the central activity of many of the players in the market, and they all took a heavy hit.
The different efforts by the companies to distance their products from the negative reputation given by the WHO including special sales events have not met with much success. Senior market sources said at the beginning of the crisis it was not a passing fad; now it appears the producers will have to make fundamental changes to their business model.
One senior industry source told “Globes” at the time: “We never thought for a second we make oats, buckwheat, or lettuce we’re in an industry that belongs to a different standard, but the effect here is serious, and we cannot treat this as a specific moment.
“We cannot think that we took a tumble today but we’ll wake up tomorrow and everything will be fine. When you slap the word ‘cancer’ and even more when you’re being compared to cigarettes it’s not another incident. We have a responsibility to think and to prepare.”
As part of those efforts, Soglowek introduced a new series of products that contain no preservatives: it includes hotdogs, deli meats, and processed meats. According to Storenext data, Soglowek sales have plunged 32% since the beginning of the year and its market share dropped to 35.6%.
The second major player in the market is Tirat Zvi, which is jointly owned by Tnuva and Kibbutz Tirat Zvi; it finished the period with a small increase in market share but a sharp drop of 23.2%. The midsized players in the market were also hurt: Maadaney Yehiam sales fell 26.3% while Of Tov sales dropped 33.8%.
Soglowek CEO Pini Kamari announced this week his decision to step down from his position in six months. Kamari made the decision last year but stayed on because of the crisis. He will wrap up more than six years in the role, and he intends to head into the private sector. Before the crisis, he managed to streamline operations at Soglowek.
Kamari will be replaced by Eli Soglowek, who had served as chair of the managing committee. Soglowek said, “Pini Kamari is one of the pillars of Soglowek and he fulfilled his role with endless devotion. We thank him for his excellent work during an important and challenging period and his many contributions to Soglowek.”
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2016
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