The Israeli food and beverage group’s coffee segment operating profit fell 37% in the third quarter as a result of weakening exchange rates, higher green coffee prices and ongoing conflicts in Israel and Russia
Strauss Coffee distributes 16 packaged coffee brands | Photo credit: Strauss Coffee
Israel’s Strauss Group has posted a slight fall in coffee sales in the third quarter as trade continues to be impacted by Russia’s invasion of Ukraine and the recent conflict in Israel.
Coffee currently contributes 48% of the Petah Tikva-based food and beverage manufacturer’s sales, reaching NIS 1.27bn ($342m) in the three months ended 30 September 2023. Third quarter coffee sales were 2% below the same period of last year, primarily due to a fall in sales and volumes in Russia.
Strauss Coffee’s sales in Israel grew 5% year-on-year to NIS 210m ($56m), while its international revenues fell 3.6% to NIS 1.06bn ($286m). Coffee sales outside of Israel currently account for 84% of Strauss Group’s total coffee business.
The division ended the third quarter with NIS 90m ($24m) operating profit, a decline of 37% compared to the prior year period. The group said the weakening of the Israeli shekel, higher green coffee prices in Brazil and the impact of the Russia-Ukraine conflict has hindered profit margins.
Strauss Coffee distributes 16 packaged coffee brands, including Elite Coffee and Beanz in Israel, Ambassador in Russia and Ukraine and Fort and Pedro’s in Poland.
“Since the beginning of the war in Israel we have maintained business continuity. Our dedicated people are working across the country to keep on providing food and beverages and ensuring the food security of the residents of Israel. The quarterly results reflect our ongoing focus on implementing the group's strategy, productivity measures and innovation,” said Shai Babad, CEO, Strauss Group.
Strauss Group’s total third quarter revenues grew 7% to NIS 2.67bn ($716m). The business also operates in the fields of water, dairy, dips and spreads, fresh food, confectionery and snacks.