Where is the retail and marketing industry heading? What are the new trends that will characterize it, and which trends will become extinct? Who are the players who will survive the rapid pace of change? The section will analyze the situation in the industry, and the future that awaits it. For inquiries and responses: [email protected]
The author is the CEO of the economic-marketing consulting firm Czemanski Ben Shahar & Co.
Israelis like to eat meat. Meat restaurants are ranked fourth in customer preferences in Israel, and the share of meat restaurants in Israel out of the total supply of restaurants is the largest. Israel is ranked first in the world in consumption of chicken per capita, and in fourth place in consumption of meat per capita.
Will the current health and lifestyle trend bring about significant changes in the consumption habits of meat, poultry and fish? According to rough estimates (there is no controlled and real study), in Israel about 5% of the population is vegan, and there is a double proportion of vegetarians – together they make up 15% -10% of the population. These numbers have been on a significant upward trend in recent years.
Here we will describe the changes in the quantities consumed and the consumption habits of meat and fish products in the country over the years, and what is expected in the field.
A quarter of the monthly expenditure
Meat restaurants are ranked fourth in customer preference (from a customer survey conducted by Czemanski Ben Shahar & Co. among a representative national sample). There are about 2,500 meat restaurants of all kinds in Israel, and another 1,200 restaurants that define themselves as “Oriental” and sell meat products on a significant scale. This is out of 14,200 restaurants operating in the country.
The largest share belongs to restaurants that specialize in meat and Italian, with 17% for each area. Inevitably, this share and its position in the ranking indicates the consumption preferences and behavior of customers in Israel. Specialty fish restaurants occupy another 1%. The share of “healthy” restaurants, vegan and vegetarian, is less than 1%. However, in the menus of the “regular” restaurants, the portion of vegan and vegetarian dishes thickens.
The population of Israel currently numbers about 9.4 million residents, who are unionized in about 2.9 million households. Consumption in Israel in general, and consumption of food and beverages in particular, is growing steadily. The steady increase in the per capita consumption rate indicates that the increase in consumption is not only a result of the increase in the population, but also stems from a change in the consumption habits and disposable income of the households that grew.
Households’ monthly expenditure on food products is on the rise (CBS data). In the last decade, there has been a weighted average annual increase (CAGR) of 1.7%. In 2022, expenditure was NIS 2,411 (excluding VAT) in the average quintile. Of this, expenditure on meat and fish products accounts for about 25% (excluding expenditure on meals outside the home). In other words, the average monthly household expenditure on meat and fish is NIS 650-750.
Consumption in general, and consumption of meat, poultry and fish in particular, is also a derivative of economic well-being. A comparison by the OECD between the countries of the world reflects a correlation between the size of the consumption of animal protein (meat and fish) and the level of gross domestic product per capita.
Due to the economic growth, the increase in the gross domestic product in Israel over the years has caused a significant increase in the volume of animal protein consumption. Post-Corona consumption in Israel is also among the highest in the world. According to data from the Bank of Israel, the growing trend in gross domestic product in Israel is expected to continue, and as a result, the increase in the volume of consumption of meat, poultry and fish products will continue.
Raising poultry for food is one of the largest agricultural industries in Israel in terms of product volume – about 10% of agricultural product, which in 2021 amounted to NIS 3.4 billion. In 2021, the volume of production will decrease by 6.5%. Today, this market is estimated at 615,000 tons per year, and an increase of 25-30,000 tons per year is expected by 2032.
The price of poultry has remained constant in recent years, and no change in consumer preferences is expected in relation to the consumption of these products. This means that the high level of consumption per capita is expected to be maintained.
4 sources of meat
The meat market is currently estimated at 220,000 tons per year, and is expected to continue to grow in the coming years. Meat consumption per capita in Israel is growing, and is lower only than in Argentina, the United States and Brazil. In consumption of beef, only Chile and South Africa lead us.
The edible meat market is estimated in 2021 at 182,000 tons. There are four main sources of meat consumed in Israel: imported frozen meat (46%), live veal imports (25%), Israeli live beef (15%) and imported chilled meat (14%).
In recent years, there has been a significant trend of an increase in the consumption of chilled meat imported, mainly at the expense of imported frozen meat and Israeli live beef. The instability in the volume of imports of live calves is due to the changes in public opinion in relation to this mode of import, which affect the regulation of the industry around the world.
Unlike the deli and ready-to-eat food market, in the last decade the supply of stores specializing in the sale of meat and fish and butchers has decreased, and now their number is about 800. The reasons for this are the strengthening of supermarket stores, which also offer dedicated meat departments in their field, as well as the sale of special meat and fish products within convenience stores, and in some delicacies. In practice, the rhythm profession is becoming extinct.
Expect to grow fish
The level of fish consumption in Israel is relatively low. Among other things, in light of the avoidance of some of the population consuming seafood for religious reasons. The volume of consumption is small in real terms, and given the increase in the population.
In 2020, there was a significant increase in the volume of imports and the volume of total consumption, as derived from the removal of import tariffs. Similar to the process that the butcher market is going through, the number of stores that specialize in fish has also decreased in the last decade. Supermarkets of all kinds produce the best alternative, and in a “store within a store” format.
The volume of fish consumption is not expected to increase significantly, but the market share of imported fish is expected to increase. The fish market is currently estimated at 170-175 thousand tons per year, and is expected to grow by about 7,000 tons per year by 2032.
Bottom line, the volume of consumption of meat, fish and poultry products in Israel has increased, and is still not affected by the existing awareness of the health connection, the environment and the transition to a vegetarian and vegan lifestyle. Although restaurants and cafes have a growing supply of vegetarian and vegan dishes (as happens in the consumer market for gluten-free products), the number of pure “healthy” restaurants is not expected to grow significantly in the coming years, in the absence of a sufficient economic basis for their existence.