Kellogg's Israel franchise sold to Schestowitz for $15m

Kellogg's controls 42% of the global breakfast cereal market, but has neglected the Israeli market for years.

Sources inform “Globes” that Kellogg's (NYSE:K) Israeli franchisee Alexander Jacobs Ltd., owned by Cilla Horowitz, has been sold to S. Schestowitz Ltd. for $15 million. Kellogg's sales in Israel are estimated at NIS 60 million.

Michigan-based Kellogg's has $9 billion in sales a year and 26 factories worldwide. The company makes 70 types of breakfast cereal under the Kellogg's brand.

Kellogg's controls 42% of the global breakfast cereal market, but has a smaller share of the Israeli market than its competitors, after neglecting the Israeli market for years. The Israeli breakfast cereal market has been growing rapidly, mainly thanks to the efforts of the market leader, Telma, a brand of Israel Edible Products (Tami)-Bestfoods, an Israeli subsidiary of Unilever (NYSE:UL; LSE; XETRA:ULVR).

Schestowitz, mainly a cosmetics and toiletries company, took its first steps in the food sector 18 months ago. Schestowitz imports Gillette (NYSE:G), Colgate-Palmolive (NYSE:CL) and Duracell brands, and has $150 million in annual sales. Schestowitz recently acquired 50% of Beit Teva Kal, the importer of Alpro Soja soy products. Schesterowitz also became a partner in the importer of Barilla pasta.

In 2000, Kellogg's planned to establish a joint company in Israel with Elite Industries (TASE:ELEI1; ELEI5). Kellogg's and Elite were to each own half of the venture. Kellogg's withdrew from the deal, when it decided to halt all non-US investment after acquiring US cracker company Keebler for $8 billion.

Horowitz told "Globes", "The switch to Schestowitz is a milestone for Kellogg's in Israel, which will enable the brand to achieve a place in the market worthy of the company."

Kellogg's share of the Israeli market has fallen from 20% to 11%, compared with Telma's 63% market share and Nestle's (SWX:NESN) 12% share. Israel's breakfast cereal market is estimated at NIS 300 million.

Published by Globes [online] - - on December 23, 2003

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018