The Woman Behind the 5-shekel Cup of Coffee

Hagit Katz Shinover, daughter of the Cofix discount cafe chain’s founder, speaks about being a millionaire (on paper) and her hard-scrabble childhood.

Eyal Toueg

The change that came over Avi Katz, the founder of the famed five-shekels-a-cup Cofix cafe chain, was momentous. One moment he was speaking with his characteristic self-confidence in front of a TV camera, going on with stories from his past and quoting the Bible and rabbinic literature. But off camera, Katz rushed to sit alongside his daughter, Hagit Katz Shinover, who had been nervously inspecting the first-ever Cofix supermarket due to be opened later that day.

“Do you think it’ll succeed? We haven’t made a mistake?” Katz asked his daughter. She didn’t hesitate.

“Not a mistake at all - there’s nothing to fear,” she answered, making it clear how important her presence was for him.

Until two weeks ago, Katz Shinover was best known for being Avi Katz's daughter, but her profile has grown since Cofix’s debut on the Tel Aviv Stock Exchange last month. Only 30 years old, Katz Shinover is now worth some 33 million shekels ($7.9 million) on paper due to her 17% share of Cofix, which operates 75 cafes and the Super Cofix supermarket brand. Super Cofix has only one store right now but has three more slated to open in the next two months. Cofix plans to have 110 cafes up and running by the end of the year and add a further 30 by 2018.

Not only is Katz Shinover the second-largest shareholder in the company, after her father's 32% stake, she is also the vice president for purchasing and sales. She is responsible for negotiating with suppliers, deciding which products will be sold, designing the stores and cafes. She also oversees advertising and marketing.

Cofix, whose cafes and supermarkets sell everything for a single price of 5 shekels, is one of the most intriguing companies to have popped up in Israel in recent memory. In less than two years, it has become synonymous with low prices. Gyms, real estate agents and even printer ink sellers advertise themselves as the “Cofix” of their industry.

A branch of the Cofix coffee chain, south Tel Aviv, January 2015. Less profit per sale, but more sales.
Ofer Vaknin

Katz Shinover is the oldest of five children and the only one who works for Cofix. Compared to her father, who loves the spotlight, she works mostly behind the scenes. But Cofix’s major suppliers, who work with her, describe her as the force that powers the vision. Katz creates the strategy and she brings it to fruition, they say. He comes to the first and last meetings and makes a lot of noise, say the suppliers, but the rest of the work is done by her.

“She’s very powerful and full of ambition,” says a senior executive at one of Israel’s largest food manufacturers, who asked not to be identified.

“Hagit is a trader in the full meaning of the word, very professional. She is not [her father’s baby]. She’s tough, no sucker,” says the CEO of another large food company.

Katz Shinover's toughness is evident even before the interview begins. A buyer calls to tell her that a distributor they work with says he can’t put barcodes on the cartons identifying the product. She snaps back, “Let them find a way to put it on. What’s the big deal? All our suppliers put on barcodes and they’ll do so, too. Enough said.”

As it becomes clear later in the interview, that is how she works - no excuses, no apologies, no waffling and no fear. She finds how to get what she wants without any sentiments. Nonetheless, in most cases she is pleasant and business-like.

Katz Shinover says that unlike what many think, she did not grow up spoiled. She spent her childhood with a father who was bankrupt and a mother who was a housewife - and the family barely made ends meet.

“We didn’t have money when I grew up,” she recalls. “A child doesn’t feel she’s growing up in poverty, so I didn’t have a feeling of lacking anything, but I certainly did not get everything I wanted. When I think about it, I remember I had one pair of shoes and they never bought me another pair ... I remember they told me, ‘You have a pair of shoes, why do you need another pair?’”

She says the first time her father had money was around when she got married at age 20. “He wasted the money on the wedding,” she adds.

As a child, she worked in the warehouse of her father’s toy store chain and as a teenager she worked during school vacations. Her sister cleaned the offices twice a week during the school year, even after the family already had made some money.

“I received an education of hard work and saving. Today, too, when it’s busy in Super Cofix, my father and I come to help pack and arrange the shelves," she says. "The week after the opening I did three shifts in the supermarket, and father helped, too."

Even as a newly minted millionaire, Katz Shinover wants her children to get a similar education. “I buy them clothes in the plainest stores at 20 shekels an item, and I don’t buy brand names for myself either,” she stresses.

She met her future husband Michael as law students at Shaarei Mishpat College. The two were engaged just two weeks later and married less than three months after that. “I still don’t understand why I felt so pressured to get married, but in retrospect I wouldn’t have managed to achieve what I have without it.” It may sound like a cliché, but it’s true, she says.

She left law school after her first year, since “it was hard for me to stick with studying - I preferred the school of life.” Her husband stuck with it and is a lawyer specializing in contracts.

At 21 she gave birth to her daughter Avital, and then went to work for two years in the Kfar Hashashuim, the toy store chain her father owned, in the import department. After her second daughter, Libi, was born, she decided to look for something else, which is when her father came up with an idea for a business.

“My father told me a friend of his had a cosmetics store in Herzliya and he wanted to sell it. He asked me if I wanted to run the store as a franchisee of the Loka chain. I spent a few hours in the store and decided I wanted it.” And that is how at age 24 she became a retailer.

She says she was able buy the store with the help of her father.

“The store cost 400,000 shekels with the goodwill and the inventory, and my father gave me a loan in return for checks spread out inconveniently at 8,000 shekels a month in 36 payments. My husband finished his law degree just then, so we didn’t have any money. We managed to keep to it, but it was really hard. I managed the store for four years. After three years I paid off the loan and managed to make a little profit, and I made money in the fourth year.”

Her father came to her with the idea for Cofix, which she thought was brilliant. They both thought she should continue in cosmetics, but her husband cast a veto. “He saw the potential in Cofix, told me it was going to be crazy and I have to be there.”

Katz Shinover lives in a five-room apartment in the center of Ra’anana, the Tel Aviv suburb she has lived in most of her life. Her parents live in Kfar Sava. Her gross monthly salary is 22,000 shekels.

“I really don’t feel like a millionaire, maybe because it’s on paper," she says. "When my father hears me saying the money is only on paper, he tells me I’m stupid, since even on paper its worth [something]. But in the end I live on the salary I earn.”

Sometimes her bank account is down to zero by the end of the month, she says. The couple has a little bit of savings and only one car - and she thinks they still need to cut back a bit. Her husband uses an electric bicycle and they try to go out once a week to a restaurant - but not a fancy one. They don’t travel abroad much and go to a hotel twice a year.

“I don’t have time .... I work from 8 a.m. to 6 or 7 p.m. My husband works from home and is the one who’s with our daughters most of the time,” she says. “I’m not exactly a person with vision, but a person who lives for the moment. I’m here and do what needs [to be done the] best [I can]. I don’t have a great dream, since to tell the truth I’m pretty much living the dream now. I love to live for the moment without thinking all the time about the next thing.”

It is easy to forget when you sit with her that Katz Shinover is religious, and grew up until she was seven in Bnei Brak. She studied in religious schools and did civilian national service instead of the army. Her daughters also go to religious schools. Her father keeps the Sabbath and took part in the battle to close Tel Aviv’s supermarkets on Saturday.

“So what if I wear pants and not a skirt? I live a religious lifestyle. I keep the Sabbath, keep kosher," she says. "As a religious woman I prefer for places to be closed on Saturday and be kosher.”

She defends her father’s part in the Sabbath-closing campaign, which critics called religious coercion. “If I’m in Tel Aviv and all the restaurants are open on Saturday I can’t eat meat there, so that’s nonreligious coercion,” she snaps back.