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Following the success of its carrot snack category in the US over the last two decades, Strauss Group Ltd. (TASE:STRS) is trying to replicate this success in Israel. Today, the company launched two products in the carrot snack category. The packages contain pieces of fresh, peeled carrots that come in two forms: baby carrots, and carrot fingers. Strauss expects sales of NIS 12-13 million in the first year.
The launching of the products necessitated the building of a new NIS 15 million factory at Kibbutz Shluhot.
The new products will be sold at all supermarkets, convenience stores, café chains, and vending machines. In addition, Strauss is launching a special small package for McDonald's Happy Meals.
"In the US, 60% of carrot consumption derives from snack bags. We are following the trend. Schools are very interested in these products," said Strauss fresh foods division GM Eli Itzkin.
The product's main shortcoming is its short shelf-life: only eight days. This will most likely cause large losses until the market gets to know the product, assuming that it will.
A 150 gram bag will cost NIS 4.95, and a 400 gram bag will cost NIS 9.90.
The price reflects a price of NIS 33 per kilo for carrots in small bags, and NIS 24.70 per kilo for carrots in family-size bags. Itzkin says that, "One kilogram of carrots is needed to produce 380 grams of our carrot packages. This means that there is 60% waste. Secondly, there are other costs, such as refrigerated transport." The vegetable market is currently valued at NIS 5 billion per year. Strauss fresh vegetable unit manager Morris Cohen says that the group expects to have NIS 72 million in sales for 2011 in the fresh vegetable category. The group sells 7 million vegetable packages every year.
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