Tiv Taam to invest NIS 12m to relaunch Eden Teva

Eden Teva organic Photo: Tamar Matsafi
Eden Teva organic Photo: Tamar Matsafi

Health store Eden Teva, which has eight branches and a website, will be expanded to 10 branches.

18 months after acquiring the Eden Teva chain of health stores, Tiv Taam Holdings 1 Ltd. (TASE: TTAM) will invest NIS 12 million in relaunching and renewing the brand, previously called Eden Teva Market. Tiv Taam acquired Eden Teva in September 2015 for NIS 29.25 million. Eden Teva, which has eight branches and a website, will be expanded to 10 branches. Two branches have been upgraded, as well as three departments within Tiv Taam stores.

As part of the change, the Eden Teva logo has been replaced, and the branches themselves were redesigned and downsized in order to increase the return per area. For example, NIS 6.5 million was invested in the first branch under the new conception in the G shopping mall in Kfar Saba, and its area was substantially reduced to 1,100 square meters. In launching the branch today, Tiv Taam CEO Adi Cohen said that the size of the branch had been reduced from 2,700 square meters, and the branch was now selling nearly twice as much.

At the same time, another branch was opened on the Star Center site in Ashdod, after having been upgraded at an investment of NIS 4 million and having its size reduced from 1,100 square meters to NIS 700 square meters. Two more branches under the new concept are slated to open in 2017, in addition to the opening of Eden Teva departments in seven large Tiv Taam chain branches.

In addition to the name, the chain is trying to present a healthier image, and has introduced a number of changes in which a health bar with shakes and organic juices, to be sold for NIS 15-20; an industrial machine for making tahini on the premises; and a machine for making oil from legumes chosen by the customer on the premises have been introduced. In the framework of the innovations, the chain will offer both upgraded branches and departments in existing branches offering a new naturopathic consultation service provided free of charge by the chain's health consultants. Another innovation is a line of beef products free of antibiotics and supplements, which has not previously existed in Israel, with beef raised in Israel and slaughtered under kosher inspection. In contrast to the Tiv Taam chain, the Eden Teva chain is not open on the Sabbath, and does not sell non-kosher meat product, but lacks an official kashrut certificate.

Eden Teva has an active online store, lately joined by Tiv Taam, which also opened a website with deliveries, including on the Sabbath. According to Cohen, sales by the Eden Teva online store approximately equal sales of an additional branch.

Tiv Taam acquired the Eden Teva Market chain in May 2015 from the receiver, after the latter accumulated NIS 300 million in debt when Mega was the controlling shareholder. According to Cohen, the stay of proceedings affected the chain, causing a 50% drop in sales, but substantial growth has taken place since.

Cohen added that the market share of the organic food market rose to 1.5%, after a number of years of stagnation, and prices in Israel have remained high. "In the health market, there is an enormous gap between Israel and the rest of the world. In Israel, because of the market's size, the level of prices, import barriers, and other regulatory problems, variety of products is very limited, and prices are high," he says. The chain is promising to import health products that will be 30% cheaper than the corresponding products in Israel. Tiv Taam's response to the private brands of competing chains is to import products from a French retail chain named Casino. "Eden Teva will have no home brand," Cohen says. "We think that producing a private brand for the relatively small Israeli market will substantially increase costs."

Casino operates 15 branches in eight countries, and has a €41 billion annual turnover. Its organic products include granola, jam, beer, wine, etc. The sale of some of these will already begin in the coming days, while others are in the licensing and marketing processes.

Cheap prices do not go together with health products. The prices of organic vegetables will remain substantially higher than those of ordinary vegetables. For example, peppers are sold for NIS 16.90 a kilo, tomatoes at NIS 14.90 a kilo, cucumbers at NIS 10.90 a kilo, and lemons at NIS 29 a kilo. Commenting on the cost of organic vegetables, Cohen said, "The cost is higher, the fields are limited in size, there is a high depreciation rate, and seasons are a more significant factor." 370 grams of the organic tahini made at the branches is sold for NIS 14.90.

Among the products sold at the chain are quite a few products also sold at Tiv Taam stores and other retail chains that are not necessarily labeled as health products. Eden Teva nutritionist Rotem Gefen explains that the definition of a health chain refers to the products it does not carry - including preservative materials, food coloring, and food containing flavor enhancers, such as monosodium glutamate. Gefen says, "15% of the offers for products submitted to us do not obtain the chain's approval. When the marking reform comes, we'll want to promote our green products. Products with a red mark will be consigned to a less prominent place on the shelves; they won't be in the center of the store. We aim to limit the number of red-marked products that we offer."

The Ministry of Health's future reform is due to take effect in January 2018, including a red mark on products containing a large quantity of sugar, salt, or fat. Cohen said today, "If Israel implements this, there will be no imported products here. As players in the sector, we know that there is a serious problem in implementing this law. For the importers, we are smaller than the market in New York. Who will put a sticker on for us? The cost will be rolled over onto the consumer."

Published by Globes [online], Israel Business News - www.globes-online.com - on May 21, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Eden Teva organic Photo: Tamar Matsafi
Eden Teva organic Photo: Tamar Matsafi
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