International markets now generate 80% of revenues for the Israeli food and beverage manufacturer’s coffee division, with strong performances highlighted in Brazil and eastern Europe
Strauss Coffee distributes 16 packaged coffee brands, including Ambassador in Russia and Ukraine | Photo credit: Strauss Coffee
Israel’s Strauss Group has reported robust revenue growth for its Strauss Coffee division following strong sales across international markets.
The Petah Tikva-based food and beverage manufacturer cited its international coffee business as the key contributor to 12.4% year-on-year group revenue growth. Total group revenues reached NIS 2.5bn ($688m) in the three months ended 31 March 2023.
Strauss Coffee achieved 10% sales growth to NIS 1.2bn ($320m), 20% of which came from Israeli operations and 80% from international markets.
The coffee division saw sales rise 11% to NIS 621m ($167m) in Brazil, where Strauss Coffee has a 50% share in the Três Corações joint venture, alongside a 10% increase in Israel and a strong sales growth across the rest of Europe.
Strauss Coffee’s European-based international sales comprise of operations in Russia, Ukraine, Poland, Switzerland, Germany, The Netherlands and Romania.
In May 2023 Strauss Group announced the sale of its Serbian coffee roasting division, Strauss Adriatic d.o.o., for €40.5m ($43.6m) to Croatian consumer goods distributor Atlantic Grupa.
Despite a strong performance for its coffee division, Strauss Group said it is currently tackling ‘ongoing profit erosion’ due to significantly elevated raw material prices.
The group's first quarter gross profit reached NIS 837m ($225m), while operating profit grew to NIS 208m ($56m).
“Strauss experienced growth across most of its businesses, with an improvement in market shares and revenue growth. However, the need to cope with rising raw material costs and inflation led to a significant decline in the group’s margins overall, most notably in Israel, while the price increases by the group offered only partial compensation. We are making progress in implementing our strategic plans and driving further growth, strengthening and expanding our partnerships, optimising our portfolio, and are focused on significant plans designed to improve productivity,” said Shai Babad, CEO, Strauss Group.
International coffee sales were also the driving force behind Strauss Coffee’s 2022 revenues, which grew 37% to NIS 4.8bn ($1.3bn). The coffee segment contributed 51% of Strauss Group’s NIS 9.5bn ($2.6bn) full-year revenues.
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.