FMCG market in Israel - statistics & facts
Israel's fast-moving consumer goods (FMCG) market hit a new high in 2023, expanding by over six percent compared with the previous year. The first half of 2024 has also shown robust sales growth. This is part of a broader trend, with industry sales growing at a compound annual rate of 4.25 percent over the past five years. The food sector has been a key driver of this expansion, accounting for more than three-quarters of FMCG market. With a value exceeding 10 billion U.S. dollars, this segment is marked by a flurry of product innovations and booming categories such as snack foods and packaging designed catering to specific demographic groups, such as children. Although high inflation has played a role in the nominal growth, the market continues to expand in real terms.
Snack foods are filling shopping carts
Snack items have become increasingly popular among Israeli supermarket shoppers, driving growth within the food segment. Vegetable snacks, in particular, saw the highest increase in sales, with unit sales surging over 50 percent year-on-year. White chocolate bars followed closely, grossing over ten million U.S. dollars for food retailers. Seaweed products and gummy candies also saw notable expansions. This trend reflects a growing consumer preference for compact, single-serving packaging. As a result, smaller retail channels like corner shops and convenience stores are gaining market share at the expense of large supermarkets.
Market concentration continues to raise concern
However, the concentration of power in Israel's FMCG market continues to cause unease, as a handful of heavyweights dominate both the retail and supply. In retail, Shufersal stands out as the undisputed leader, commanding over 30 percent of the food retail market and posting an annual turnover of several billion U.S. dollars in 2023. It also holds a significant stake in the health and personal care FMCG segment through its ownership of 'Be', the country’s second-largest drugstore chain. On the supply side, the ten largest suppliers account for almost half of the market. As of mid-2024, the top three suppliers, Tnuva, Osem and Strauss, held almost 27 percent of the market. The dominance of a few influential actors has sparked concern among economists and politicians alike, leading to the enactment of the 'Food Law' over a decade ago. This law aimed to stimulate competition among FMCG retailers and bring down prices. Although concentration among suppliers has fallen by nearly eight percentage points since then, the success of the reform is being questioned amid a cost-of-living crisis.
Snack foods are filling shopping carts
Snack items have become increasingly popular among Israeli supermarket shoppers, driving growth within the food segment. Vegetable snacks, in particular, saw the highest increase in sales, with unit sales surging over 50 percent year-on-year. White chocolate bars followed closely, grossing over ten million U.S. dollars for food retailers. Seaweed products and gummy candies also saw notable expansions. This trend reflects a growing consumer preference for compact, single-serving packaging. As a result, smaller retail channels like corner shops and convenience stores are gaining market share at the expense of large supermarkets.
Market concentration continues to raise concern
However, the concentration of power in Israel's FMCG market continues to cause unease, as a handful of heavyweights dominate both the retail and supply. In retail, Shufersal stands out as the undisputed leader, commanding over 30 percent of the food retail market and posting an annual turnover of several billion U.S. dollars in 2023. It also holds a significant stake in the health and personal care FMCG segment through its ownership of 'Be', the country’s second-largest drugstore chain. On the supply side, the ten largest suppliers account for almost half of the market. As of mid-2024, the top three suppliers, Tnuva, Osem and Strauss, held almost 27 percent of the market. The dominance of a few influential actors has sparked concern among economists and politicians alike, leading to the enactment of the 'Food Law' over a decade ago. This law aimed to stimulate competition among FMCG retailers and bring down prices. Although concentration among suppliers has fallen by nearly eight percentage points since then, the success of the reform is being questioned amid a cost-of-living crisis.
