Cashing In on ‘Kosher’: Passover Goes Private Equity
Business + Economy

Cashing In on ‘Kosher’: Passover Goes Private Equity


Why is this Passover different from other Passovers? 

Well, for one thing, The Manischewitz Company, the world’s largest kosher food company and a name that, for American Jews at least, has been synonymous with the holiday for 126 years recently changed hands. It is now owned by an affiliate of Bain Capital. Moreover, demand for kosher products, including those sold at Passover, are seeing growth from an unlikely source — people who aren’t religious Jews.

Market research data recently cited by the Newark Star-Ledger found that more consumers who bought kosher goods did so because of “health and safety” reasons. Hebrew National for years marketed its hot dogs with the slogan, “We Answer to a Higher Authority” — similarly playing up the idea of kosher as quality.

That potential for broader brand growth — and the prospect that the company could break out of the kosher food aisle — helped make Manischewitz an attractive buyout target.

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“We saw a great company and wanted to make it greater,” said Mark Weinsten, the company’s interim CEO in an interview with the newspaper. "It was a very appealing investment opportunity.”

Passover, the celebration of the ancient Israelites’ delivery from slavery in Egypt, is big business for Newark-based Manischewitz — and a growing business overall. Total spending on the holiday, which ends Tuesday, will reach about $1 billion this year, a 5 percent gain compared with last year, as the number of products designated “Kosher for Passover” continues to rise.

That estimate from Kosher Today, a trade publication, includes everything from purchases of food products to spending on holidays at resort hotels. People are expected to spend roughly $85 million on matzah — thin, unleavened bread eaten by Jews during Passover. The bread is both the best-known and top selling product associated with the holiday.

“Matzah is a strange category,” said Menachem Lubinsky, the editor-in-chief of Kosher Today and an industry consultant. “Many retailers use it as a loss leader.”

Manischewitz reportedly controlled as much as 80 percent of the U.S. market for matzah as recently as 1990. Competition in the market, however, has heated up in recent years as U.S. matzah makers have lost market share to a flood of imports from Israel. Kosher Today estimates that the Israeli firms now have about 40 percent of the U.S. market.

Matzah now comes in a wide variety of flavors, such as egg and whole wheat, that weren’t available years ago. Sales of handmade circular matzahs called shmura are also growing in popularity, especially among Orthodox Jews.

Many Jews who aren’t particularly observant buy the unleavened bread during the holiday, as do a fair number of non-Jews, who like the taste and are interested in recreating Jesus’ last supper, which scholars have argued was a traditional Passover meal known as a seder.

“If you are living in New York, Los Angeles or Baltimore, you are going to see eight to 10 different varieties of matzah,” says Rabbi Yosef Wikler, who edits Kashrus Magazine Online, in an interview. “It’s a totally different market than it was 10 years ago.”

To combat the market trends, Manischewitz has diversified and added new products and now has over 400 items for Passover alone. For example, the company began selling a brand called Kitni aimed at Sephardic Jews of Middle Eastern ancestry.

“Overall,” said Avital Pessar, a brand manager at Manischewitz, “we are hoping that people feel connected.”

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