From shelves to labs: Israeli food execs talk trends and challenges in 2024

As 2024 unfolds, executives in the Israeli food sector are looking ahead at a landscape shaped by the lessons of 2023, a year marked by challenges and successes.

The perspectives from both the retail and food-tech sectors offer valuable insights into the anticipated trends and challenges for the coming year.

Retail: Navigating challenges and emphasizing resilience

Dani Bezalel, Chief Marketing Officer of Keshet Teamim Supermarkets, reflected on the tumultuous nature of 2023. “2023 was a challenging year on one hand and a good year on the other,” he said.

“The war has forced us to work in very difficult conditions, which proved once again that we as a company and all of the retail and especially supermarket industry are very important to the national ability to stay strong and to overcome hard times, as was proven before during coronavirus and through all the wars in the past.”

Bezalel emphasized the looming challenge of securing quality and committed personnel in 2024. The war experience has reinforced supermarkets as a source of job security, highlighting the need for a skilled and dedicated workforce. The impact on the produce supply chain during the conflict has also brought attention to the importance of sustaining local suppliers and producers for national resilience. However, he noted, “it is a great challenge to maintain them, alongside maintaining the cost of living since imports make it possible to lower the shopping basket costs.”

As 2024 unfolds, retailers will need to keep a keen eye on evolving consumer preferences, technological advancements, and supply chain dynamics. The shifting landscape of retail requires adaptability to changing customer behaviors, a strategic embrace of digital solutions, and proactive measures to ensure the continued resilience of the industry in the face of unforeseen challenges. The delicate equilibrium between supporting local producers and managing costs will demand innovative solutions, making strategic foresight and agility paramount for retailers navigating the uncertainties of the upcoming year.

Food-tech: Maturation and mission in a changing landscape

Eyal Afergan, Co-Founder & CEO of Imagindairy, provided insight into the maturation process currently underway in the food-tech industry. Israeli food-tech companies at the forefront of this transformation are transitioning from visionary endeavors to realizing their true potential.

Illustrating this transition, Afergan noted that the company achieved significant milestones in 2023, including regulatory approval in the US, a strategic investment from Danone, new state-of-the-art headquarters, and additional agreements.

Looking ahead to 2024, Afergan anticipates continued demand for tangible progress and results in the food-tech sector. Moreover, there is a growing emphasis on non-animal dairy and sustainable food products, with companies expected to thrive by delivering premium quality at cost-effective prices.

The intersection of technology and food production is about providing alternatives and addressing broader concerns related to resource depletion, climate change, and food security. The ongoing work in food-tech represents a crucial element in the collective response to these challenges.

“The war has highlighted the need for food security action plans, and we estimate food-tech will play a major role in these,” he said.

Regulatory reforms: Streamlining import processes amid historical challenges

In a concurrent development, the Knesset's Health Committee approved an amendment to the Consumer Protection Order, specifically focusing on the labeling and packaging of food products. This amendment, part of a broader reform initiative led by the Economy Ministry, marks a pivotal step toward streamlining import processes and eliminating barriers to the importation of food into Israel.

Following the official cancellation of around 100 food standards in November 2023, the amendment eliminates the obligation to publish a unique requirement specification on certain products. This requirement, previously mandated for items such as pasta, rice, frozen fruits and vegetables, oils, honey, alcoholic beverages, chocolate products, spices, cheeses, and more, added to costs and served as a significant import barrier.

The order’s content will undergo thorough reexamination during the first year of implementation. This includes a continued assessment of remaining import barriers resulting from the standards that persist.

However, it’s essential to note that the last two years have seen the government attempt several tries at import reform, with little impact on prices or variety in supermarkets. As such, industry observers will be keenly watching to see if this latest amendment brings about meaningful change.

While the ongoing conflict with Hamas adds additional uncertainty, the industry remains cautiously optimistic. The ability to adapt, innovate, and prioritize national resilience in the face of adversity reflects the strength and determination embedded in Israel's business landscape. As 2024 unfolds, the Israeli food sector approaches the future with a watchful eye on evolving dynamics, ready to embrace challenges with resilience, innovation, and a measured sense of optimism.