Last summer the food importer arrived Willipod to the headlines, and not because of a move she led or an event that directly concerns her. The story was born because of the price of canned tuna Starkist of diplomat which became the symbol of the struggle against the cost of living, when in front of her stood the ton of Willipod. “We were not involved at all in everything that happened,” says Zvika Williger, one of the controlling owners of the company and joint CEO together with his brother, Yossi.
“It was a war of the ‘pipeline’ against diplomat, and we were the answer, but we were not contacted, nothing. It came as a surprise to us. In the month that our tuna was on evening television, there was a 70% growth in sales, in the last two months the trend continued, and we saw a 45% growth.”
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Only in tuna or other products?
“Our sales have increased considerably. The problem is that we still don’t have enough shelf space, so that we are seen the way the leading brands are seen. The marketing chains still don’t give enough space to companies like us.”
And how do you fix it?
“The only thing is to show the marketing chains that our products are selling. As soon as they see that they are making money, there will be a change. In the end, everything is business. Every category we enter, I prove to them that we are no less good than the leaders.”
affect Shufersal
Williger is a rare case of a supplier who is also a retailer, as one who owns 4.9% of Shufersal, the largest food retail chain in Israel. A few months ago it was announced that he tried to form a group of investors that would purchase additional percentages of the chain, but he denied this. He also refuses to comment on Aaron Frankel, who held talks to acquire control but gave up and retired.
How does being a shareholder in Shufersal reconcile with the fact that you are their supplier?
“I entered Shufersal on a personal level, not through Vilipod. This is my private investment. After examining the network, I believe it has a very high potential. I strongly believe in Itzik Abarkhan and the new CEO, and that they will make a big change and we will see it in the return on the stock.
“At the moment we are still losing a lot of money, but this is not a financial deal but a strategic one for me, and I like to invest in places that I understand a little bit. All in all, we will have a good return with the stock as a result of the good work they are doing – there are now very big changes, they are changing the business I think this is a chain with huge potential, and following Carrefour’s entry into Israel, Shufercell will be a very interesting target for international companies.
“It seems to me that at the end Shufersal will do a merger, or there will be something else regarding the ownership. It is currently owned by the institutions, and I do not believe that it will remain without an owner. I am a considerable shareholder in it now, the largest individual, and this is a strategic deal for me.”
Were you surprised that Barkhan returned?
“No. It was clear that he had to go back. There was a very serious accident that needed to be fixed.”
Do you think Carrefour will bring about a price revolution?
“I don’t think so. Israel is a very competitive country when it comes to imports, Carrefour still needs to learn a lot of things. The fact that you bring such a brand still does not mean that you can sell cheaper than other brands. It will take them a long time to assimilate this brand against the leading brands, but there is no There is no doubt that I am very pleased that an international network recognizes the State of Israel.
“At the time, I wanted to bring in an international chain, and in the end it failed solely because of the reputation – this chain has stores in the Arab world, and it was not ready to risk that by entering Israel. Carrefour has many stores in the Arab world and here, it agreed to enter. I mean, after the Abraham agreements Israel received legitimacy.
“The entry of Carrefour has brought recognition to the country, and I believe that this is only the first step and several more will follow. I know that the Israeli government is pushing for as much competition as possible, and I know that the Israeli market is very attractive, it is a market that can sell all over the world.”
Are you tickled to try again to fetch network now?
“Very well”.
Is there anything in stock?
“I can’t talk about it.”
“Trying to cut expenses”
The first conversation with Williger took place in a cafe in Sabion on election day. It was interrupted countless times, and between the stories about Lieberman and Netanyahu and the hustle and bustle of the Sabbath, it was almost possible to forget that November 1 was the day when the new price lists of the suppliers went into effect, which included price increases of up to 20%.
“There is no doubt that there is no sector or category that the producers did not ask for price increases, and not by a few percentages. By dozens,” says Williger. “I have no doubt that there will be massive price increases here, but I hope that the Israeli consumer will understand that there is a high-quality alternative that is much cheaper than the local produce.
“The price differences between us and the leading brands are 30%, and sometimes even 40%-50%. Therefore, even if we raise the prices a bit, the differences will still be huge.”
How do you explain that?
“We try to reduce our general expenses as much as possible. We also invest much more in the sale of the goods and the consumer, than in advertisements and marketing. This saves money, but it has a huge disadvantage, because it is difficult to bring the message to the attention of the public. On the other hand, once the public meets the products Ours is satisfied, and we see an increase in sales.”
To demonstrate the way he conducts himself in front of the nets, Williger talks about the Crambo. “For us, it’s Manevo, with real chocolate. We sell it 25% cheaper than the Israeli Karambo, and that’s even before they raised prices.
“The problem is that the Israeli consumer has to get used to eating an over-qualified product, and it’s very difficult. To change the consumption habits of Israelis who have been eating the same krambo since Ben-Gurion declared the State of Israel, and suddenly someone comes to them from Denmark, which is actually the country of origin of the krambo – it takes time.”
The latest update on the cost of living is the price increase announced by Tnuva (see page 4). Williger refuses to comment on the issue, but noted that “we are getting more and more into dairy products, such as yogurts and yogurt drinks. We brought a Pro Beauty yogurt that we sell for two shekels less than the corresponding Pro Beauty. The point here is to educate the Israeli consumer, and this is a Sisyphean task. It’s not easy.”
How do you really do it, if you don’t invest in advertising?
“This year we increased our marketing expenses by almost 300% compared to what we invested in the past. Of course this is at the expense of the financial results, but we believe it will have an effect.”
“Everyone absorbs something”
As a shrewd businessman with decades of experience in the industry, one might expect Williger to keep a poker face when talking about the competitors or the Israeli consumers, but every now and then he sneaks a small smile or hits his fist on the table in emphasis or frustration.
“Do you know how much we sell yellow cheese from the best dairies in Europe? Around NIS 15 cheaper than the Emek cheese. I’ll tell you what the headline should be here. ‘The people of Israel should stop whining and crying and start buying wisely.’ He will save a lot of money and enjoy equally good products.”
Is this already happening?
“Yes. In the end, the prices here are rising significantly, and the salaries are not. Why should you eat pasta that costs twice as much? Look what happened to Asem, sales dropped significantly, and the alternative pastas increased significantly.”
Everything is getting more expensive now. Are the importers and suppliers supposed to absorb everything?
“I believe that none of the competitors are really raising their prices according to the price increases. I’m sure that everyone is absorbing something. The question is how much are you willing to absorb, and how much are you willing to give up your profitability. We as a company decided in several quarters to give up profitability for the benefit of the consumer, and you saw it in the financial statements .
“We had a report that we dropped 80% in our profits, and we invested all the money in letting the consumer buy at the old prices. In the end, it’s all a matter of strategy, and ours was not to raise prices so that the consumer would be more exposed to our products.”
Are you drawing fewer salaries?
“No, just less profits. Now you ask how we still make money? I have a brother who does a wonderful job together with me, and all our people work very hard, we have a naval commando. And everyone knows that we are an import school. Most of our competitors today are friends. who worked for us in the company.
“Excessive overcrowding”
Vilipod is traded on the stock exchange at a value of approximately NIS 720 million. In the reports for the second quarter of the year, the company’s revenues increased by about 4% to NIS 241 million. However, the net profit was cut by about 46% to about NIS 19.7 million.
The group engages in the import, export, marketing and distribution of over 600 food products in Israel and abroad, and according to Williger, they launch 150 new products a year. “There is no other Israeli company that does this. Of course not everything stays, only what succeeds. It costs a lot of money and it’s a lot of work, but we believe in it.”
Who should absorb the price increases, the suppliers or the marketing networks?
“The marketing chains that everyone is attacking earn very little, 2-3% operational. On the other hand, the big companies that own 60% of the Israeli food market, earn the big numbers. This is where the change should come.
“By the way, the marketing chains earn more on our products than on the products of the big brands. It’s a rule: the weaker the brand, the higher the retailer’s profit. The stronger the brand, the lower the retailer’s profit.”
Is the harassment that is now on your colleagues justified or excessive?
“They are exaggerating a bit. There is no doubt that they are exposed to price increases, and adjustments and the middle ground must be found so that everyone is satisfied. In the end, they will not stop working with Unilever or Terra, it’s just a matter of time and negotiations. It’s a game. This game does not exist with us, if I leave That’s it, I left, they won’t call me to come back. But they have no choice. They won’t tell Tara not to supply more goods because you are raising prices. In the end, they will find the king’s way.”
Who has more power, the networks or the producers?
“Right now? To the big manufacturers, who hold 60% of the Israeli market. They set the tone. There will be price increases in any case, it’s just a matter of time and how much. We too will have to raise prices on some products. We will increase in a measured way, and even then we will be much cheaper than the brands the carriers”.
“We doubled the sales”
What is your biggest career mistake?
“My wife claims that my biggest mistake is that I returned to the food industry after selling the company twice (the first in 2007 to Arkady Gadimak, the second in 2014 to Alexander Granovsky, Shas). She says that at my age I should have come to rest and peace, and not be so springy.”
So why did you come back?
“It’s stronger than me. I went to a psychologist, and he told me that this profession and my love for this thing is much stronger than me, and I can’t overcome it. Those who work in the food industry must love it with every inch of their organs, because the payoff is not like in other industries , but much smaller.
“You need to have fashion, and I have that. I like developing products, making and changing things. I’ve done a lot of things in the country in consumer habits and products, I really enjoy it.”
So why did you even sell twice?
“Because at the end of the day I’m also a trader, and I received offers that I couldn’t refuse. I don’t think I’ll do it again. The last time it was a very big mistake, I sold to the wrong people who did terrible things to the company.”
And were you able to restore?
“Here, look at the results. From 2017 until today, we have doubled sales and tripled profitability. We have done very big things in a relatively short time in the food industry.”
Where is the industry going in the coming years?
“It will be very difficult, and there will be a lack of goods. The war between Ukraine and Russia is causing enormous damage to the economy. The world is in trouble, because it is not possible to feed the entire population. There are already countries that do not allow their products to be exported, because they want to take care of their residents. It will be more and more “.
Zvika Williger ID
personal: 67 years old, married and father of two daughters. Lives in Sabion
professional: In 1992, he founded Vilipod with his brother Yossi, which is currently traded on the Tel Aviv Stock Exchange (the subsidiary Vilipod International is traded in Tel Aviv and Nasdaq in New York). He sold the company twice, in 2007 to Arkady Gaidamak and in 2014 to Alexander Granovsky, and in 2017 bought it back
Something else: Likes to read thrillers, and go to Champions League soccer matches