Inside The Business Of Kosher

Menachem Lubinsky: Kosher base “continues to grow.”

Menachem Lubinsky: Kosher base “continues to grow.”

by Julie Wiener

With higher-than-expected kosher food sales for the Jewish holidays, an uptick in kosher organic and the introduction of 5,000 new kosher products this year, the multibillion-dollar kosher industry appears thriving. This week, 7,000 people flocked to Secaucus, N.J., for the 21st annual Kosherfest trade show.
Kosherfest’s founder, Menachem Lubinsky, is president and CEO of Lubicom Marketing Consulting, which specializes in marketing to the Jewish and other niche communities and touts itself as the “pioneer firm of the kosher marketing community.” Lubinsky’s who edits the trade magazine Kosher Today, spoke to The Jewish Week about the industry

Q: What explains the kosher industry’s success in the midst of a recession?
A: The base community [of kosher consumers] continues to grow. The retailers in [heavily Orthodox] areas like Borough Park, Flatbush, Lakewood and Monsey all say they are doing larger sales because more young families are coming in and families are getting larger.

Kosherfest displayed 500 new items this year (including Luck Chen microwaveable Asian noodles, “Best In Show” winner of the best new product competition). At this point, an estimated 40 percent of supermarket products are kosher and gross annual sales of kosher products is over $200 billion, with sales of kosher ingredients now more than $325 billion. What exactly are “ingredients,” and why is this such a growth area?

You have ingredient companies all over the world that produce flavorings, oils, everything that goes into a food product. If you want to sell an ingredient product in the U.S., you can’t sell it if it’s not kosher. Kellogg’s, Dannon and Coke aren’t going to buy it.

What are the major countries where kosher supervisors have now set up shop?

China is huge. You have upward of 2,000 companies that produce kosher items.

Is the kosher certification business profitable?

All the supervising agencies, the large ones I know are all not for profit. The Orthodox Union [The Largest certification agency] is not-for-profit, and proceeds from kashrus fund a good deal of the programs of the OU. Is it profitable? Big time, but they use it to fund all their other projects.

How much money do you think the OU brings in from certifying kosher products? I’ve asked them a few times and no one ever tells me.

That’s probably as secret as the ingredients of Coca Cola.

What’s been the Pomegranate effect? When this upscale kosher supermarket opened in Brooklyn last year, many people predicted it would put its rivals out of business.

They have definitely taken share away from a number of competitors in different areas, but not enough so that any are on the verge of collapse.

Has the kosher meat market stabilized since last year, when meat-processing giant AgriProcessors was forced to close (due to an array of criminal charges)?

Yes, but it’s different. Before, Agri was supplying almost every large and small market. Today, those tiny markets are either out of the picture or have sporadic supply.

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