IN-DEPTH FEATURES
The Race for the Dairy Case: Selling to Chareidim

Every year the number of cheeses and dairy products at the grocery store grows, leaving the consumer at the dairy case overwhelmed by the selection: cheese spread, cheese spread with olives, hard cheeses, foil cheeses, salted cheeses, velvety cheeses. The buying public -- especially as the Nine Days draw near -- piles them into the cart to keep the refrigerator stocked with a wide array of yogurt, leben, cheese, cheese spread, and other products.

Not everyone is so thrilled with this cheese-fest. The overflowing dairy cases have Rachamim Burkov, a veteran stock clerk at a well-known Jerusalem chain, very anxious. "When we have an oversupply I add a shelf or a display stand on the spot," says Rachamim in a tone of agitation, "but when the truck carrying dairy products rolls in, my chest tightens up and my head begins to ache. Where have the good old days gone? Crates of plain cheese spread would come in, I would arrange them in straight rows on the shelf and that was that. Today I have to try to deal with piles of puddings, yogurts, cheeses and a dozen kinds of chocolate milk and other milk drinks. I feel like it's time for me to throw in the towel."

Rachamim shoves the leben into one straight row. Then he arranges a display representing all of the various puddings and milk drinks and builds a tower of yogurt with remarkable deftness. "The agent from the dairy comes around demanding to know why his company's products are not visible and how I had the gall to put the competing cottage cheese on an eye-level shelf."

On the Shelf

"We fight for every shelf," says Amit Raz, deputy director of marketing at Tara. The various dairies wrangle over every centimeter of the dairy case which, unlike the non- refrigerated shelves, have strict space limits and cannot be readily expanded due to problems of logistics, infrastructure, compressors and costs.

Despite the stiff competition, the dairy industry is not saturated and consumption continues to increase noticeably. Surveys show that Israeli consumers spend NIS 2.2 billion ($550 million) per year on cheese, yogurt, pudding, and milk drinks, in addition to the hundreds of millions of liters of plain milk purchased.

Even these staggering figures are not all-inclusive. Dairy products are a good barometer to measure the sharp increase in living standards at the beginning of the 1990s, which boosted the development of new products. Surveys commissioned by the respective dairies show that the consumer would be very glad to see a new product with a unique taste and texture appear on the shelves of the dairy case tomorrow morning. The dairies are only too happy to rise to the challenge, and in every dairy's secret development rooms, strategies are devised to accommodate the Israeli palate.

The battle for the dairy case is waged largely in the product development department, where the dairies work on new products in complete secrecy. "You want me to tell you about the products we're planning?" a manager in Tnuva's marketing department asks me incredulously. "Do you think we're about to let our military secrets get written up in the paper?"

Chagai Eldar of the Aviv Dairy says that only the owners know the product ingredients, none of the employees have access to the information and the recipes are not recorded anywhere, not even on computer disk. "It's all up here," says Chagai, pointing a finger toward his head. "The work is compartmentalized. Each worker has his own job to do and has no idea what the exact raw ingredients are." The mashgichim sent by Shearis Yisroel are informed in detail of the ingredients used, but even they are not privy to the precise mixture. Despite the precautions taken, industrial espionage is a problem at every dairy.

The major dairies' big fear is of the small dairies, explains a senior executive at one of Israel's leading dairies. "A small dairy would have no problem imitating a trade secret. Its limited operations allow it to change plans and manufacture a new product within a short period of time. Here every change involves tremendous logistical alterations and means bringing in a whole line, including workers and raw ingredients."

Marketing

The vast selection of products on the market forces the various dairies to work hard on marketing and advertising. Every dairy is armed with top admen who do extensive field work in order to splice the market into specific target sectors. In its recent advertising campaign Tara invested a modest sum of $160,000, small change spent to convince us that without their cheeses we run the risk of malnutrition.

Advertisers don't take any chances. Before each new product goes on the market, taste tests and sector-specific surveys are conducted and research teams are brought in. Advertising agencies even conduct "pantry surveys" in which representatives are sent door-to-door to ask about the products currently on the refrigerator shelf. "I buy Tnuva milk and Tara cheese," says one housewife with confidence. "May I take a look inside your refrigerator?" the researcher inquires politely and then, to her great surprise, the refrigerator is actually stocked with Tara milk and Tnuva cheese.

Benny Gal of Gal Advertising, which holds the Tnuva account, explains that in such cases the respondent is not really lying; many consumers do not have a distinct preference and simply do not notice what they buy. But in advertising there is no room for mistakes--the agency has to do its homework down to the last detail. A campaign stresses brand recognition: "Look for our product, red with a green logo-- red and green are your colors," the commercial will say, aggressively steering the consumer to the right shelf of the dairy case.

How are new products marketed?

Benny Gal guides us through the mysterious world of advertising. First, experienced admen analyze the existing information; if it is already widespread, it is considered a known fact and a completely different advertising message will be disseminated. Then they research the demand for the product, and whether the public is aware of the benefits of the special added ingredient or innovation.

Health, for example, goes over very well in advertisements for dairy products. Consumers are no longer satisfied with plain, old-fashioned milk. Today they demand fortified milk and look for calcium and vitamins. In the West the current trend in nutrition emphasizes foods that contain elements from all of the food groups and top-selling products contain various added ingredients.

Amit Raz of Tara explains that basic dairy products such as milk and plain cheese spread are excellent carriers of various health additives. Yet despite the widespread awareness generated largely through advertising, some customers think the products are for other people. Often they think the health additives are aimed at sick people. "I'm as healthy as a horse," the wary reader tells himself, "I don't need a product designed for the sick."

If a campaign to promote healthy ingredients has not made their advantages sufficiently clear to the general public, it has missed the mark. "When I want to market a cheese containing Bio," says Gal, "I have to verify that the healthy consumer is aware of the tremendous benefits the ingredient can provide his immune system. Trusted authorities, from doctors to nutritionists, appear before the consumer to explain that a given product will improve his health.

Advertisements are supposed to appeal to a particular target audience. The contents of a campaign aimed at the Arab sector are entirely different from a campaign aimed at the average Israeli. Secular sectors are highly influenced by advertising that stresses prestige--"you can afford to buy a better milk drink." When the brainwashed customer goes to the grocery store he just might choose this product since it makes him feel like part of the upper class.

When the typical Israeli buys cheese spread, he looks for added value that has nothing to do with the product itself, often taking ridiculous considerations into account: a rock star's rave reviews of a certain brand of yogurt or a recommendation to drink a strawberry-flavored milk drink.

Of course ad copy aimed at the chareidi sector uses a special lexicon and contents of its own. Every self- respecting ad agency has a staff member who is familiar with chareidi habits and specializes in the methods of persuasion that are most effective with chareidi consumers.

Who are We and Why Do We Buy?

The chareidi sector is "a purposeful sector that focuses primarily on the pragmatic element," says Gal. "They are looking for products that are kosher lemehadrin, tasty, come in large quantities and are of course inexpensive."

A professional ad man will not try to persuade chareidim through appeals based on sports and/or a body-oriented culture. Such messages would just distance the chareidi consumer from any product, no matter how good it may taste. While other sectors may buy milk as a status symbol, the chareidi buyer is not interested in gimmicks. "Better twice as big at an attractive price," says the consumer in Jerusalem or Bnei Brak. "I couldn't care less if rich people want to buy cheese spread in a porcelain container with a translucent pink wrapper."

On the other hand, healthy and hygienic are qualities that can strike home, and the chareidi public, which adheres to the precept of nishmartem, is willing to pay more for a healthy product, despite the fact that most chareidim are on the lower rungs of the socioeconomic ladder.

The most transparent advertising techniques are often used in appeals to buy "in honor of Shabbos" or through reminders that a healthy nefesh thrives "in a sound body." While the chareidi consumer expects the advertising agency to do its job by focusing messages on product quality, admen often scoff at such an idea and may even reject it outright.

Sometimes the halfhearted, insincere acceptance of mitzvos and customs on the part of advertisers is not enough to lure the chareidi consumer to the grocery-store shelf. After all, the former can normally be expected to have a lesser knowledge of halacha, which has been known to make itself apparent in advertising. In one case, for example, a dairy issued an "earnest call" to purchase milk products before Shavuos and to stock up before the Nine Days.

Nevertheless in general, advertising agencies demonstrate a reasonable knowledge of halacha and customs, as well as considerable awareness of chareidi ways. Yossi Shemayahu, director of marketing at Tnuva, is very fluent in the lexicon used in the chareidi sector. He talks of Tnuva's sponsorship of women's nights and of smachos held by Admorim. Surveys conducted in chareidi areas show sharp increases in sales before Shabbos and chagim, particularly Shavuos, and during the Nine Days.

In areas with a mature population there is also a sharp increase in the purchase of sweet yogurt and pudding products on erev Shabbos, by "Grandma and Grandpa buying goodies for the cute grandchildren," says a veteran adman well networked in the chareidi sector.

Stuck in the House

"When I begin an advertising campaign for a new product I use all of the weapons at my disposal," says Yossi Shemaya of Tnuva. "We analyze the market and know exactly which bus stops to stick posters on. Demographic concentrations dictate where billboards go up and our ads appear in almost every chareidi newspaper." And if, by keeping our eyes on the ground and ignoring most ads, we happen to miss some of the artillery fire, there is still a good chance of finding a glossy recipe guide stuck to the front door.

Advertisers for the dairy industry know the heart and soul of their customers. The child in everyone loves getting presents. "Buy six containers of cheese spread and get one free."

Dairies like to lure customers with fabulous offers of scratching away, collecting tops or dialing a phone number listed and saying the secret code word, and rely on the children to do the legwork and to beg their parents to cooperate.

Despite all of the enticements and the billboards on every corner, every rookie adman knows that the way to the chareidi consumer's wallet is through the small print. Even a four-year-old trying to get a chocolate pudding with whipped cream into the cart knows how to ask, "Do we eat this hechsher?" Without the right hechsher, the most attractive product will not make it to the checkout counter.

Take Aviv Dairies, for example, a newcomer in the industry that singled out the chareidi market as its major target group a few years ago. "Shearis Yisroel doesn't make life easy for us," says Chagai Eldar, of Aviv. "From the list of Eida Chareidis dairy farms, they select only certain ones where milking is done by religious Jews and without the slightest suspicion of milking on Shabbos."

Eldar goes on to describe the close supervision during transport of the milk and the strict oversight of the production process at the dairy itself; even a minor trial issue of a new product requires special approval. Eldar then explains how Shearis Yisroel mashgichim are involved in every stage of the production process. "We have been visited on numerous occasions by gedolei hador and leading poskim, all of whom sang the praises of Aviv's chumras and strict adherence to halacha."

At Tnuva, the Mehadrin Committee is a refreshing innovation in kashrus: a panel of rabbonim and kashrus experts from various other committees who supervise its kashrus, rather than one or two individual committees.

Yechiel Nizari, director of marketing at Tnuva's Jerusalem production center which produces all of the products under the supervision of the Mehadrin Committee and the Eida Chareidis, describes the dairy's adherence to the strictest standards of kashrus. "We have to obtain advance approval from the Badatz before making even the slightest changes. Sometimes I feel like even our thoughts are subject to supervision." The dairy's pre-Pesach preparation is a major event that warrants an article of its own, but kashrus arrangements during the rest of the year are painstaking as well.

The Long Road to Kosher Milk

Tnuva's Rav Whitman (who is employed by the dairy to oversee its kashrus) says Mehadrin Committee vehicles travel tens of thousands of kilometers every month as part of the work involved in the task of supervising milk and dairy products. In a long conversation with Yated Ne'eman he lays out the various problems the kashrus department faces.

First of all is the problem of treif milk. A cow that undergoes certain surgical procedures, such as stomach perforation, is considered a treifoh, and its milk is no more kosher than pig milk. "One Friday at two in the afternoon," recalls Rav Whitman, "I was summoned to one of the dairy farms to watch an emergency operation performed on a cow. Without mashgichim on hand, the dairy farmers are not allowed to operate."

A highly trained mashgiach stands beside the veterinarian and together they plan a surgical approach that will not render the cow treif. Veterinarians know that operations may not be performed without the mashgiach present and dairy farmers do not dare to take such matters lightly.

There are also various ways to detect cows that have undergone operations. Rav Lichtenstein of Tara explains that every dairy farm has a computerized record of all the operations performed there. "When I arrived at one of the large dairy farms in the center of the country," recounts one of the mashgichim from a well-known kashrus supervision organization, "suddenly I saw a cow in isolation. The dairy farmer stammered various excuses from who-knows-where, but eventually I got to the bottom of it and he admitted that the cow had undergone an operation."

Another mashgiach describes an incident in which a worker dumped milk into the drainage system. "Right away I knew there was a problem. Since when do they throw milk away? I went up to the dairy farmer and asked which medications the cow was receiving. He then admitted that the cow had recently had an operation and that it was taking tremendous doses of antibiotics. He knew the Milk and Dairy Council would throw away all of the milk he had produced."

Problems of kashrus begin with the cow itself, but do not end there. With Thai, Polish and Romanian laborers working at dairy farms, gedolei haposkim have placed greater emphasis on the issue of cholov Yisroel.

Milking on Shabbos, however, remains a more severe problem. The issue is complex, but in general, at non-chareidi dairy farms, the rav of the moshav arrives to oversee the milking, and at more remote locations milking is monitored via video cameras installed on the premises. "When the dairy farmer delivers his milk, he hands over a video tape along with it," says Rav Lichtenstein. "Then the mashgiach watches the tape to see whether any milking took place on Shabbos."

If so, mashgichim arrive on Sunday to ensure that the milk gets taken to the regular production line, and is not used in products that are kosher lemehadrin. Only if the dairy is clean of such milk from the beginning of the milking process does it reach the mehadrin market. During transport from the dairy the milk is also carefully tracked. The contents of the tanks are carefully listed and the receiving mashgiach double-checks with the mashgiach at the point of origin.

Everything is Expensive--From the Camera Down to the Germs

Kashrus is a costly affair. Video monitoring systems cost NIS 30,000 ($7,500) per dairy farm and other related expenses jack up the price further. "Video monitoring is not just expensive because of the equipment needed," explains Rav Whitman. The dairy farmers are constantly on camera, which is not a particularly pleasant situation.

At Tnuva dairy farmers who choose to supply milk for the mehadrin line and agree to work under the spotlight receive a special bonus to compensate for the intrusiveness of the video cameras. Paying the mashgichim--who are on the job some 230 hours per month--also brings total costs up considerably. All this is just to ensure the milk is kosher; then there is the cost of supervising the dairy itself, as well as the ingredients that go into the various products.

"The public is not aware of our high day-to-day expenses," says Chagai Eldar of Aviv. "Take, for example, a basic product like powdered milk. Seven shekels worth abroad can be fifteen shekels or more for mehadrin powdered milk in Israel."

Rav Whitman says many of the raw ingredients used are very expensive due to their strict standards of kashrus, pricey stabilizers and similarly high-priced substitutes. To obtain one of the ingredients that goes into Vicol Margarine, for example, mashgichim must travel to such faraway places as Japan, France and Morocco.

In addition to the basic ingredients, importing bacteria has its price too. Why pay for bacteria? After pasteurization bacteria is introduced into the milk to develop cultures for cheese products. The problem does not stem from using the bacteria to produce yogurt or to make holes in Swiss cheese, but since they are raised on a bed of milk, in many cases there can be problems of cholov nochri.

In the past the imported bacteria were raised on a bed of cholov Yisroel and the third generation was used as kosher, but with today's sophisticated kashrus setups, entire factories outside of Israel are made kosher and mashgichim are sent abroad to guarantee the bacteria are raised on beds of cholov Yisroel to start with.

Preventing Fraud

How can incidents of fraud and deceit be prevented? Tnuva knows how to assess the potential losses involved when a cow is put out of commission, and compensates the dairy farmer to remove the temptation to deceive the kashrus authorities. Rav Lichtenstein says that in the kashrus business fixed routines must be avoided. How can he be sure a given producer does not mix other milk together with his mehadrin milk?

Generally black-market milk is of inferior quality. Producers who receive milk from the Milk Council run the risk that the Council's stringent tests will detect less than optimal fat and protein content or excessive amounts of antibiotics or bacteria. The risk is high, along with the fact that all of the milk could be rejected if undesirable substances are found. The producer is thus liable to lose its premiums, receive fines and can even have its production license revoked.

But above all, says Rav Whitman, "Trust can only be lost once. Dairy farmers know that even the slightest breach of trust will take its toll." Tnuva's policy is that it is always best to report correctly and stick to the truth.

"If a producer gets confused and makes a mistake, he can always come forward and explain what happened and we will accept his mistake. He also knows that Tnuva generally absorbs the losses. But if a dairy farmer is caught trying to trick us, that will be the first time and the last."

In today's war of attrition over the dairy case, the consumer is the focus of attention. Statisticians and admen are peering over his shoulder to see what goes into the cart, and use this information to plan their battle strategy. They take note of every container of cheese and every four-pack of pudding, trying to figure out why you decided to spend your money on the competitor's chocolate milk. Tomorrow they will translate your grocery bill into bombastic industry jargon -- "the consumption preferences of the average chareidi consumer" --and will concoct brilliant schemes to ensure that on your next trip to the grocery store, your buying habits will conform to their expectations.

All of the dairies seem to fawn upon the chareidi sector in particular. "We cater to the chareidi public," they declare, adding in a whisper, "We put our faith in you, spent good money to set up a special production line, and now it's payback time. So buy our yogurt."