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The Schmooze

Israelis Drink More Alcohol, Eat More American Food

We may be in the midst of an economic crisis, but it seems there’s at least one good business to be in. Food imports to Israel are growing out of proportion to the overall growth of the Israeli food market.

The Israeli food market grew by 2.3% in 2008, to $14.4 billion. But food imports grew by an enormous 25%, to $1.8 billion, says a report by the USDA Foreign Agricultural Service.

So what is going on here? Well part of the picture is the weak dollar. Agricultural and food imports from the US to Israel increased by 33% to $628 million

But it can’t only be a question of currency rates, because the Euro has strengthened significantly and yet imports of agricultural and food products from the EU increased 23% to $1.7 billion in 2008.

In short, there seem to be several factors coming together, some good, some bad. As the report points out, the growth in imports reflects overall economic growth in Israel, which is a result of Israel weathering the economic crisis relatively well. It also reflects the fact that the Israeli food market is becoming more complex — though Israeli consumers have a penchant for sugary and fatty foods, the market for health foods, organic foods, wholegrain foods and the like is growing, meaning that imported products in the healthy niche are selling well. Israelis today, says the report, are “quality oriented and are ready to pay a premium for quality food products.”

To be viewed with more ambivalence is the fact that alcohol consumption is growing by 5% to 15% a year. “The driving force behind this growth is the one million immigrants from the former Soviet Union, who are known for their relatively high alcohol consumption,” claims the report, which is written with the objective of highlighting trade opportunities for Americans. “In addition, in recent years the consumption of alcohol by youngsters has increased significantly. Israel is among the top six nations in the world in terms of vodka consumption, valued at over $83 million per year.”

While the report implies that the rising imports are good news as it means more opportunities for importers, some in Israel will view evidence of rising imports as alarming. Traditionally Israel imports more than 90% of its cereals, 70%-80% of its fish and beef, and half of its pulses, oilseeds and nuts. Some will regard the latest import figures as a wake-up call saying that Israel needs to become more self-sufficient.

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