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Quick Stats

Quick Stats

Organics Dashboard From Passport

  • All Organic Ltd leads organic foods in Israel with a value share of 18.7% in 2019, followed by Hasade Natural and Organic Products Ltd with a value share of 5.7% and Tuvot Organic and Natural Food products with a value share of 5.3%.
  • Currently, the registered per capita expenditure, market size and forecast growth of organic products are relatively smaller than other developed economies, indicating a slow growth potential over the forecast period of 2019-2024.

  • Organic products in Israel represent barely 0.1% of global demand, with a per capita expenditure of US$8.25 in 2019. There is still a significant portion of the population unaware of the value-added by organic products, indicating a need for consumer education and potential for future growth.
  • Overall, there is expected to be positive growth, with organic products registering a CAGR of 3.5% for the forecast period 2019-2024, reaching a value of US$88.5 mn in 2024.
Qualitative Analysis

Qualitative Analysis

Quick Facts
  • Organic packaged food and beverages in Israel recorded a growth of 1.0% in 2019, to reach a value of approx. US$ 74.5 mn.
  • Organic baby food led the growth in organic packaged food with a current value increase of 21.0% for the period 2018-2019.
  • Organic soft drinks led the growth in organic beverages with current value growth of 9.0% in 2019. However, this was partly driven by an average unit price decline of 2.0% in 2019.
Market Trends
  • Organic products still struggle in Israel, with a price difference, when compared to non-organic variants remaining substantial in most categories. However, categories where the price gap is not significant, such as organic tea witnessed some growth, with a value increase of 5.6% seen in 2019.
  • While organic food witnessed some growth in 2019, the performance was weak compared to many other categories, especially alternatives such as fortified/functional offerings. Currently, the main types of products sought as organic are fresh fruit and vegetables as consumers try to avoid pesticides and chemicals in food, although even this is a niche.
Competitive Landscape
  • All Organic Ltd led packaged food by a considerable margin due to the popularity of its Harduf brand offering a wide variety of organic products across various categories and distributed by Tnuva, which contributes to its widespread availability. However, Harduf’s share is expected to fall in coming years, declining from its 2019 level of 23.4%, on the back of the success of Nizat Haduvdevan and Shufersal organic products.
  • The Tvuot brand, one of the most established organic brands in Israel, owned by Tvuot Organic & Natural Food Products Ltd saw a marginal increase in value share from 6.6% in 2018 to 6.7% in 2019. This increase was driven by a reliable distribution and wide product variety. Tvuot is innovative in launching new products from different food segments, including pasta made from healthier flours, including chickpea flour suitable for gluten-intolerant consumers.
  • Alternative Pharma Ltd was the leader of organic beverages in 2019, witnessing a slight increase in value share gain from 14.8% in 2018 to 14.9% in 2019. This increase was due to the positive performance of its Pukka organic tea brand, with flavours such as fennel and cardamom, vanilla chai, lemongrass and ginger. Furthermore, the company’s support from the global owner, Unilever Group, helps provide an advantage to improve its position and maintain consumer awareness through advertising and promotional activities.
Prospects And Growth Opportunity
  • Greenfield Foods Ltd, organic food and beverage player, and the leader in organic soft drinks increased its share in organic beverages from 11.8% in 2018 to 12.0% in 2019 owing to its extensive distribution network. Greenfield is available at a wider variety of stores than many other organic beverage players, selling through not only specialty stores but also in some supermarkets, discounters, and even online retailers. Recently, the company has seen its barley-based coffee alternative gain some popularity among consumers seeking healthy hot beverages, thus, presenting an opportunity to increase focus on hot drinks as well.
  • Organic baby food has recorded an increase of 91.6% for the period 2014-2019, with new and existing brands launching organic offerings, in pouch-based formats. With rising demand on organic products from parents aiming to offer their children the healthiest option available, the market has seen a rise in new entrants such as Piccolo and Green, which entered the category in 2019. The entry of these new brands and the increasing demand from working parents is expected to help baby food continue growing over the forecast period 2019-2024, with a forecasted CAGR of 52.1% for the period 2019-2024.
  • The rise in the number of health food stores and the increasing presence of health food departments in larger outlets are driving factors for the growth of organic tea products. Currently, organic tea is witnessing high sales across specialty organic stores and specialized tea stores. The expansion of specialty stores – mainly outlets that are part of the Nizat Haduvdevan chain - allows the organic tea category to increase, also supported by the social media focus from retailers on the added value of choosing organic products over non-organic variants.
General Health And Wellness Trends
  • Organic products are still not seen as adding value, with demand restricted mainly to fruits and vegetables. However, with rising consumers’ education on the added benefit of organic products, including pasta, bread and grains, there is an increasing potential for demand for organic products to spread across more packaged food categories.
  • Several smaller brands in organic juices are witnessing some growth, for instance, Shufersal Ltd, which grew from a value share of 1.0% in 2018 to 1.3% in 2019, backed by an increased product line and broader distribution networks. Organic juices, particularly 100% juices, are therefore a crucial contributor to the demand for organic soft drinks.
General Economics And Demographic Landscape

Economy:

  • Israel's economy is expected to witness a substantial increase in 2020 due to gas exports from the new Leviathan field and population growth, with real GDP growth reaching 3.3%, similar to 2019 levels of 3.2%. Private final consumption is likely to increase by 3.5% in 2020, post an increase of 3.7% in 2019.
  • Wage growth is witnessing an expansion, led by the business sector. Israel's savings ratio has been stable and higher than the regional average, amounting to 18.3% of disposable income with the indicator expected to grow to 18.5% n 2020.
  • Unemployment is expected to remain at 3.9% in 2020, the same as in 2019. A key-influencing factor is an increasing concern for the availability of skilled labour, supporting the assessment of a full-employment environment economy.
     

Population demographics:

  • The population of Israel is growing considerably, reaching 9.0 million in 2019 from the 2000 level of 6.3 million. The country is also witnessing an increase in median age, reaching 30.0 years in 2019. Median age is expected to reach 30.8 years by 2030.
  • Fertility has declined due to the high levels of education and female labour force participation amongst secular Jewish women. Nonetheless, the situation is unique as there are also large sub-populations with persistently high fertility cultures.
     

Income & expenditure:

  • Consumer expenditure, which represented 52.4% of GDP in 2020 amounted to a per capita value of US$23,143 in 2019, with a growth of 1.9% forecasted for 2020. Communications and transport are expected to be the categories with the highest share of consumer expenditure for the period 2020-2030. Overall, consumer expenditure is expected to increase by 35.0% for the period 2020-2030.
  • Disposable income per capita was recorded at US$28,227 in 2019 with real growth of 2.1% forecasted for 2020. Cumulatively, disposable income is expected to increase by 36.3% for the period 2020-2030, averaging about 3.1% annually.
Data

Data

Organic Packaged Food And Beverage Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

CAGR
(16-19)

CAGR
(20-22)

Health & wellness products consumption

USD million

2,646.7

2,722.5

2,842.0

2,961.6

3,065.9

3,176.5

3,288.2

3.8%

3.6%

Organic packaged food and beverages consumption

USD million

62.5

67.5

71.1

74.5

77.7

80.7

83.5

6.0%

3.7%

Organic packaged food consumption

USD million

51.5

54.3

56.9

59.5

61.8

64.0

66.0

4.9%

3.3%

Organic beverages consumption

USD million

11.0

13.3

14.2

15.1

15.9

16.7

17.5

11.1%

4.9%

Organic packaged food and beverages consumption as a % of total health & wellness products consumption

%

2.4%

2.5%

2.5%

2.5%

2.5%

2.5%

2.5%

-

-

 

Economic And Demographic Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

Total population

million

8.5

8.7

8.9

9.0

9.2

9.3

9.5

% Middle and upper class of total population

%

27.3

27.3

27.2

27.2

27.1

27.0

27.0

% Population aged 65+

%

11.2%

11.4%

11.7%

11.9%

12.1%

12.3%

12.4%

% Population aged 0-14

%

28.3%

28.3%

28.2%

28.1%

28.1%

28.0%

27.9%

% Population with higher education degrees

%

27.6

27.7

28.4

28.8

29.1

29.4

29.7

Average number of children per household

children

1.1

1.1

1.1

1.1

1.1

1.1

1.1

GDP per capita

USD per capita

40,212.2

40,940.6

42,052.7

43,775.1

44,376.4

45,063.3

45,930.4

Consumer expenditure per capita (US$)

USD per capita

21,553.7

21,926.1

22,499.8

23,124.6

23,509.5

23,886.7

24,366.4

Consumer expenditure per capita on food and non-alcoholic beverages (US$)

USD per capita

3,447.5

3,518.2

3,602.9

3,725.3

3,782.8

3,848.8

3,924.8

Retailer And City Data

Top 5 Cities By Population

Data category

Rank

City/retailer

Population
(millions)

Top cities by population (2019)

1

Tel Aviv

4.1

Top cities by population (2019)

2

Jerusalem

1.3

Top cities by population (2019)

3

Haifa

1.0

Top cities by population (2019)

4

Be'er Sheva

0.4

Top 5 Grocery Retailers By Sales

Data category

Rank

City/retailer

Top grocery retailers by sales (2019)

1

Shufersal Ltd

Top grocery retailers by sales (2019)

2

Rami Levy Shivuk Hashikma Ltd

Top grocery retailers by sales (2019)

3

Yeynot Bitan Ltd

Top grocery retailers by sales (2019)

4

Osher Ad

Top grocery retailers by sales (2019)

5

Yohananov M and Sons (1988) Ltd

United States Department Of Agriculture Global Agricultural Trade System Data

Top 5 Export Commodities To Israel

Year

Country

Rank of
Product/Commodity

Product/Commodity

Export Value (US$)

2019

Israel

1

Organic Apples Fresh

1,329,904

2019

Israel

2

Organic Vinegar and Substitutes

318,341

2019

Israel

3

Organic Broccoli Fr/Ch

266,227

2019

Israel

4

Organic Fruit Prep

232,205

2019

Israel

5

Organic Tomato Sauce Ex Ketchp

81,820

2019

Israel

Total

Total Organics*

2,309,095

2018

Israel

1

Organic Apples Fresh

1,836,171

2018

Israel

2

Organic Broccoli Fr/Ch

220,333

2018

Israel

3

Organic Fruit Prep

124,098

2018

Israel

4

Organic Vinegar and Substitutes

66,088

2018

Israel

5

Organic Strawberries Fresh

66,088

2018

Israel

Total

Total Organics*

2,270,601

2017

Israel

1

Organic Apples Fresh

1,242,328

2017

Israel

2

Organic Pears Fresh

63,510

2017

Israel

3

Organic Peach/Nectarin Fresh

24,899

2017

Israel

4

Organic Tomato Sauce Ex Ketchp

5,884

2017

Israel

Total

Total Organics*

1,336,621

2016

Israel

1

Organic Apples Fresh

1,877,454

2016

Israel

2

Organic Cherry Tomato Fr/Ch

134,128

2016

Israel

3

Organic Tomato Sauce Ex Ketchp

30,969

2016

Israel

4

Organic Coffee Roast Not Decaf

3,065

2016

Israel

Total

Total Organics*

2,045,616


Note : Total organics is the sum of all exports in a particular year 
Definitions

Definitions

Term

Definition

Health and Wellness

Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Organic packaged foods and beverages

This category includes packaged food & beverages that are certified organic by an approved certification body. Organic production is based on:

• A system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers.
• Organic food & beverages are minimally processed without artificial ingredients, preservatives or irradiation.
• The use of GMOs (Genetically Modified Organism) is prohibited. “Certified Organic” means the item has been grown according to strict uniform standards that are verified by independent state or private organizations.
• Depending on the country, such products are called ‘organic’, ‘biological’ or ‘ecological’: For organic products to be included under Euromonitor definitions, the organic aspect needs to form part of positioning/marketing of the product. This is an aggregation of organic baby food, bakery, confectionery, dairy, ice cream, oils and fats, ready meals, rice, sauces, dressings and condiments, snack bars, soups, spreads, sweet and savory snacks and other organic food.

Note that fresh food products or individual ingredients are not included in this definition.

Compound annual growth rate (CAGR)

The compound annual growth rate (CAGR) is the average annual growth rate over a specified period of time. For instance, the CAGR consumption of from 2016 – 2019 will be the average growth rates across these three years.

USDA GATS data clarification

The data presented in table 2.4 represents the dollar values of the top 5 organic commodities as well as of the total organic exports of the trade partner for the period 2016-2019 as per the United States Department of Agriculture’s Global Agricultural Trade System, a database consisting of international agricultural, fish, forest and textile products trade statistics dating from the inception of the Harmonized coding system in 1989 to present.

Policy Information

Policy Information

Government Agency(s) / Competent Authority

Authorized Government Agency(s):

Plant Protection Inspection Services (PPIS) in the Ministry of Agriculture and Rural Development of the State of Israel

Agency(s) Contact Information:

The Ministry of Agriculture and Rural Development
The Plant Protection and Inspection Services
P.O. Box 78, Bet Dagan 50250
ISRAEL
Telephone: (+972 3) 9681500/01
Facsimile: (+972 3) 9681507
E-mail: ppis@moag.gov.il
Website

Organic Regulations and/or Standards

Name(s) of Regulation and/or Standard:

Law for the Regulation of Organic Produce, 5765-2005 

August 2006, the PPIS published the “National Standard for Organically Grown Plants and Their Products”  

Regulations for organic products (organic products of animal origin, production and sale) - Htsa"g 2013

Additional Guidelines for the Accreditation of Inspection and Certification Bodies (CBs) (revisions in progress July 2016)

Israel’s organic law follows European Union organic standards and requirements.

Date of Implementation: 1992

Regulation and/or Standard Scope:

This initial standards covered to unprocessed plants and plant products, and processed products derived from plants, which carry or are intended to carry, descriptive labeling referring to organic production methods. Regulations for animal products were passed in 2013.

Imported Products

Certification to the Israeli standard is not a requirement for importing organic food into Israel. However, if an importer would like to utilize the Israeli organic seal then specific information documenting that the fruit meets Israel's requirements must be submitted to the Israeli Plant Protection and Inspection Service (PPIS).

Certification and Accreditation

Certification:

A list of accredited certifiers is available.

Accreditation Method:

Government

Accreditation:

The Plant Protection and Inspection Services (PPIS) are the competent authority and sole accreditation body authorized to approve inspection bodies for organic production.

PPIS is recognized by the U.S. National Organic Program (NOP) to accredit certification bodies in Israel to certify to the NOP standards.

Additional Information

Additional Information:

Israel is on the third country list for the EU.

USDA's GAIN Report Israel Retail Foods (2019)
USDA's GAIN Report Israel Food Service - Hotel Restaurant Institutional (2019)
USDA's GAIN Report Israel Food and Agricultural Import Regulations and Standards - Narrative (2020)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Export Certificate Report (2020)
USDA's GAIN Report Israel Exporter Guide (2019)
USDA's GAIN Report Israel Food Processing Ingredients (2020) 
USDA's GAIN Report Tel Aviv Tidbits – August 2017 (2017)