Super-Sol Slaps at Strauss With Cheaper, Private-label Version of Krembo Snack

Not only is the Super-Sol retail chain stepping up its war against food manufacturer Strauss by launching a private-label version of a favorite sweet, it's going to sell the thing much cheaper, too.

The private-label Super-Sol version of Krembo - think Mallomar, Tunnocks Teacake or simply "chocolate-covered fluffball on a cookie" - is called Kef-bo. It comes in vanilla and mocha flavors and costs NIS 32.99 for a box of 40, compared to NIS 47 for Krembo.

Rival manufacturer Feldman calls its product (which looks exactly like Krembo) Angel Kiss or Manbo. (No, "manbo" isn't Hebrew for "angel kiss," it's just a name.)

A box of eight Kef-bos sells for NIS 10.99 at the discount outlets of Super-Sol Big. Packages of 20 Manbos sell for NIS 18.99.

Two months ago Super-Sol dealt Strauss a body blow with its launch of private-label plain milk and plain dark chocolate bars, to compete with another Israeli icon: Cow brand (Shokolad Para) chocolate. Cow is made by Elite, which Strauss acquired in 2004. According to the market research company Nielsen, Cow commands a 70% market share.

Krembos may be fluffy, but the figures are not. Sales of the sweet rose 43% in 2008 compared with the year before to NIS 43 million. The actual Krembo, sold by Strauss, commands 40% of the market for similar candies.

Second in line is Manbo "angel kisses" by Feldman - which will also be manufacturing the Super-Sol version, TheMarker has learned.

Super-Sol already produces about 1,000 private-label products, to the ire of its suppliers, since these goods diminish their sales. The private-label products tend to be cheaper and now constitute about 10% of Super-Sol's revenues. The range includes mineral water, Turkish coffee, canned foods, juices, pasta, rice, cookies - and chocolate and "angel kisses."

By the way, the name "Krembo" may have become generic for the delicacy in question, but in fact it was the brand name given it by Whitman, which introduced the candy to Israel in 1966. Strauss acquired Whitman in 1979 and thus gained supremacy in the market for Krembos.

Super-Sol is by far the biggest retail chain in Israel, and it has a history of complaints from suppliers to the Antitrust Authority. The chain has been accused of heavy-handed tactics, for instance removing products from its stores when the supplier offended.