The owner of Meshek Tzuriel knows where to draw the line vis-a-vis the competition. "I am not going to war against Tnuva, not even a war of words, because I have no chance," says Asher Tzuriel. Until recently, the company was a big player on a small court - the soy milk and soymilk dessert markets. Now, however, the firm will have to compete with newcomer Tnuva, and soon with Strauss.
"The size ratio between Meshek Tzuriel and Tnuva is 1 to 100," says Tzuriel. "If the struggle were like that of David and Goliath - a ratio of 1 to 4 - I would win by virtue of my experience and talent, but with a ratio of 1 to 100, I haven't got a chance; I will only tire out."
Meshek Tzuriel began manufacturing soy milk products in 1999. Today, the company's annual sales are about NIS 60 million, with half the revenues coming from soy milk and soymilk desserts. Tzuriel estimates that market's total annual sales at NIS 100 million, which means that the company's fresh and long-life soy milk, soymilk desserts and cheeses account for about a 30 percent share.
Even though the soymilk product market is far smaller than the milk product market, which has annual sales of a few billion shekels, the former is new and growing fast; Tzuriel says that in the past year, sales jumped 30 percent.
Tnuva recently began marketing soy drinks under the label "So Tnuva," while Strauss is developing soymilk desserts in a joint venture with Shemen. Alpro, Meshek Tzuriel's veteran competitor, recently joined the Shastovitz import group, which markets brands such as Palmolive, Gillette and Duracell, and will now enjoy an expanded distribution system. The supermarket chains also see great potential in soymilk products: Supersol recently began marketing long-life soy milk under its house brand label, Super Class.
What happens to a small manufacturer when the big food companies decide that its niche interests them, and they allocate huge budgets for development, marketing and advertising? Tzuriel believes that Tnuva's entry into this market will be good for his company, at least in the short term, due to its ability to invest in advertising, and thereby, create awareness of the health advantages of soymilk products.
"If Tnuva invests half as much in soymilk products as it did in Yoplait, and people are exposed to the products' advantages, I would not be surprised if soy milk is consumed in every home," he says. "Tnuva has the power and the brains to do this, and it has no choice because it is investing a lot of money to enter this field. If Tnuva does not manage to double sales in this market, its new soy milk factory will not be a white elephant, but rather a heard of white elephants."
Although many companies are due to benefit from the boost the market will receive from the entry of Tnuva and Strauss, a look at supermarket refrigerated space shows that Tnuva already enjoys a huge advantage: The company's long-life soy milk can be found in two locations - the dairy refrigerator, beside regular milk, and the dairy pudding refrigerator, beside Meshek Tzuriel's soymilk products.
Tzuriel hopes that the rapid growth in soymilk products will convince the supermarket chains to give such products their own refrigerator space, but he believes that whatever happens, "our shelf space will be reduced in favor of the big companies."
Tzuriel doubts that he will appeal to the antitrust supervisor if he feels that Tnuva and Strauss are pushing him out of the market. "The supervisor may wag his finger at them, but he will not buy soy milk," says Tzuriel.
The soy milk war is not Tzuriel's first against large manufacturers. Supermarket refrigerators display Meshek Tzuriel's goats' milk cheeses alongside Tnuva's "Collage" cheeses. Meshek Tzuriel also recently began marketing cottage cheese. "Tnuva went into the soymilk field, so I am selling cottage cheese," Tzuriel says with a smile.
Tzuriel's cheeses take up a relatively large part of the refrigerator, about the same amount of space allocated to Gad Dairies and Tnuva's hard cheeses. Tzuriel says that the fact that he is a small manufacturer may actually become an advantage in his fight for shelf space. "The [supermarket] chains' interest is to encourage small and mid-sized manufacturers in order not to give the larger ones too much power," Tzuriel says. "If the large manufacturers remain alone in the market, the chains will have no bargaining power against them."
Faced with Tnuva's advertising attack, Tzuriel says that he is a big believer in taste. "I will not be the big player, but I want to be the leader in quality," he says. "I believe that if the taste of our products remains good, our customers will maintain their loyalty to us.
"I have no solution beyond quality. I will not invest money that I do not have in marketing, but I will develop the international market, so that I will have an alternative if they take away my market in Israel," he says.
Last week, Meshek Tzuriel exported its first shipment of soy milk to South Africa. Tzuriel has also set up a company for marketing his products in the United States, but prefers to do everything by himself.
Tzuriel could have become a part of Strauss or Osem. Strauss considered the acquisition of Meshek Tzuriel's soymilk operations, while Osem wanted to buy the company's operations and merge them with its Tivol subsidiary. The synergy between Tivol, the leading company in the beef and chicken substitute market, and Meshek Tzuriel's soymilk operations is clear, but negotiations fell through.
"I did not join Tivol because I did not want to lose the identity of Meshek Tzuriel," says Tzuriel. "If my product was called Tivol, my influence would disappear altogether."
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