The Israeli food and beverage manufacturer has praised the strong performance of its coffee division as the wider group navigates rising costs, supply chain disruption and the fallout from a confectionary product recall
Strauss Group's headquarters in Shoham, Israel | Photo credit: via Shutterstock
Strong coffee sales have propped up Stauss Group’s half-year sales growth as the Israeli food and beverage manufacturer grapples with the fallout from a major product recall, inflation and supply disruption
Strauss Group said total revenues grew 8% to reach NIS 4.5bn ($1.4bn), largely due to increased Strauss Coffee sales.
However, a major confectionary product recall, ‘adjustments’ to its Sabra manufacturing plant coupled with the rising cost of raw materials, shipping and energy, led to a 59% fall in half-year operating profit to NIS 204m ($62m).
Nevertheless, Strauss Coffee’s half-year performance was ‘especially strong’, the company said, with half-year sales in Israel growing 6.1% to NIS 395m ($120m) following an increase in retail market and out-of-home sales.
Coffee sales Brazil rose 62.4% to NIS 1.26bn ($380m) following growth in quantities sold and price increases. Meanwhile, Strauss’ coffee business in Eastern Europe delivered a successful half-year, with sales growing at double-digit rates, despite the ongoing war in Ukraine.
"The first six months of 2022 reflect the Group's inherent resilience as a diverse global company and its ability to successfully contend with a challenging macroeconomic environment along with internal challenges,” said Strauss Group CEO Giora Bardea.
“The coffee and water companies both delivered excellent performances, impressive sales growth and an increase in profit. We are wrapping up a quarter of strong revenue growth but a drop in our bottom line, mainly because of the effects of elevated raw material and energy prices as well as events in the Confectionery Division and Sabra,” Bardea added.
Strauss also announced that Bardea would be stepping down as CEO after five years in the role.
"I would like to thank Giora for the 5 years in which he served as CEO and led the group with extraordinary responsibility, determination, partnership and collegiality,” said Ofra Strauss, Chairperson of the Strauss Group, who added Ofra Strauss, Chairperson of the Strauss Group.
Strauss Group is the largest food and beverage manufacturer in Israel, with its subsidiary, Strauss Coffee, one of the leading coffee distributors in eastern Europe and Brazil and controls brands including BeanZ, Elite Coffee, MK Café, Ambassador, Doncafe and Amigo.