Trade and the Market for U.S. Products and Services
Estimates for 2006 show that agricultural and processed foods imports to Israel totaled $2.8 billion, 11.5 percent above previous year levels. Of total agricultural imports13.5 percent were from the United States and 43 percent from the EU. Israeli food and agricultural exports in 2006 totaled over $1.7 billion, of which $166 million were to the United States and $1.1 billion to the EU.
In 2006, prepared food, beverages and tobacco products imports rose by more than 9 percent compared to the previous year with imports from the U.S. reaching $81 million. Food imports from Thailand and Argentina have increased by 10 percent and 54 percent, respectively, compared to the previous year. In addition, in recent years food imports from Turkey have increased significantly.
Consumer Buying and Eating Habits
The monthly household consumption expenditure in 2005 totaled $2,403, of which 16.3 percent ($392) was directed to food purchases and consumption. When buying food, Israelis are quality oriented and are ready to pay a premium for quality food products. The Israeli consumer is acquainted with American products and wishes to have more of them available but for competitive prices. During the last decade an increased share of consumers prefer to buy their products through supermarket chains, on account of the traditional channels of open markets and small grocery stores. Kosher certification is not an obligatory requirement for importing food into Israel, except for meat (beef and poultry). However, non-kosher products have a much smaller market share as the large supermarket chains and hotels refuse to carry them. Approximately 2/3 of Israeli consumers buy kosher food products.
Consumer Taste and Preference
The food service industry is expanding and consumers’ habits are changing. Over the last few years, Israelis have begun to dine out more frequently and choose premium food when doing so. Approximately 20 percent of Israel's 7 million people are concentrated in the Tel Aviv district, Israel's commercial and financial center. Other major concentrations of the population are the Haifa area (15 percent), a major port city and center for the petrochemical industry, and Jerusalem (12 percent). While most companies are headquartered in the Tel Aviv or Haifa metropolitan areas, a growing number of firms maintain branches, showrooms, or service facilities in Jerusalem and Beer Sheva.
Consumer malls and shopping centers are popular in Israel. Over 200 malls exist and others are planned. Many American specialty shops, chain stores, and franchises have their outlets in malls and shopping centers. The key to success is offering an increasing variety of new products and services to the consumer.
The institutional services, including the army, hospitals, hotels, restaurants, banquet halls and places of employment, account for 30 percent of the total market share (households and institutional). Over 50 percent of the total food supply directed at non-institutional consumers is sold through supermarkets and retail chains.
Agreement on Trade in Agricultural Products
Israel has been a member of the World Trade Organization (WTO) since 1995: The first Free Trade Area Agreement (FTAA) was with the European Community in 1975 followed by the U.S./Israel FTA in 1985. In 1996, Israel and the United States signed a five-year Agreement on Trade in Agricultural Products (ATAP), in which Israel was allowed to protect a number of sensitive crops and livestock products with a combination of tariff rate quotas and relatively high duties. In 2004, the agreement was extended until 2008.
Best High Value Products Prospects
High quality beef meat (if BSE ban is lifted)
Wine and beer
Energy drinks
Coffee and Tea
Organic food
Ice cream
Soy food products
Frozen pizza
Morning cereals
Fish and seafood products
Baby food
Frozen Bagels
Frozen vegetables
Pet food
Vinegar and Olive oil
Dried fruits & Nuts
Sauces and condiments
Intermediate products for further processing (whip toppings, corn and potato starch, milk powder, products for the baking industry)
