Sabra Dipping Co. LLC, the company behind the iconic red-rimmed tubs of hummus in grocery stores throughout the country, is probably the most recognizable Israeli brand for Americans. After all, said Inon Elroy, economic minister to North America for Israel’s Ministry of Economy and Industry, “for Sabra, you just need to be hungry.”
Less known to the public, Sabra’s parent company, Israel-based food and beverage company Strauss Group — Sabra is co-owned by Strauss and PepsiCo — is also a world leader in food technology.
The history of how that came to be was what Sabra CEO Tomer Harpaz came to speak about at the Israel-Greater Philadelphia Food Tech Summit, co-hosted by the Philadelphia-Israel Chamber of Commerce on June 20 at Drexel University. The conference explored innovations in the food and beverage industry.
“We are continuously looking for new technologies so we can add value,” Harpaz said before his keynote speech. “Adding value, by the way, can be in the form of improving efficiencies, but also in the form of adding value to the product — more fresh, less preservatives, better flavors, better sensorial experiences, so on and so forth.”
In 2011, Strauss initiated a strategic review of the food and beverage industry to understand where the industry’s future was headed. The industry had been growing for decades by increasing calories of products so people would consume more over time, and their review found that this trend would soon come to an end.
“At one point, there’s a limit to how much humans should or can consume,” Harpaz said. “Even more so, we thought that the era of volume growth, that was there for decades in the food and beverage industry, is just about to end.”
Volume growth in the food and beverage industry had led to an obesity epidemic. In 2011, more than one-third of American adults were obese, and there was an increasing number of initiatives to address that. They thought there would eventually be government regulations to tackle obesity, as well as concern over sustainability.
Without volume growth, food and beverage companies would have to grow in other ways — by competing through prices or by adding value to their products. At the same time, consumers were becoming more informed and making more rational choices about the food they buy.
“How do you address these types of pressures, these types of dynamics?” Harpaz said. “We always thought it’s not unique just to food. Technology is really key to make a difference, to make a big difference and change the world.”
With technology, they thought they would be able to provide better food for cheaper prices to consumers. But to compete with larger competitors, Strauss needed to do more than just throw money at its research and development department. They thought they could potentially develop a new system of innovation instead.
“We thought perhaps there is a new era that is coming,” Harpaz said. “We thought perhaps there is room, certainly in food, for an era that we called at the time community-driven innovation.”
That community-driven innovation would involve bringing together entrepreneurs, engineers, scientists, institutions, venture capitalists and more to create a community of innovation around food technology.
At the time, Harpaz said, there was little in the way of a food technology industry, but in Israel, often referred to as the “Start-Up Nation,” they thought they could pull it off.
“We realized that actually all the dots, all the components needed to create a technology space, a technology industry were there on the ground, but it was very, very premature and totally uncoordinated,” he said. “There wasn’t a theme of what are the big problems we would like to solve. Today, we can say we want to have the next plant-based product, we want to reduce sugar, we want to reduce sodium, we want to increase freshness, we want to have much more sustainable packaging. This is all true. At the time, there wasn’t common knowledge of what are the big problems we want to solve with technology.”
Strauss saw an opportunity to become a leader in the food tech business. They began by creating facilities for start-up companies to experiment with Strauss.
A few years later, Strauss created a food tech incubator.
Strauss’ leadership in the food tech industry was why Harpaz was invited to the conference, Elroy said. Sabra, he said, is also a great example of what collaboration between U.S. and Israeli companies can achieve.
“Sabra is an amazing example for joint venture between U.S. and Israeli companies, how the synergies could look like,” Elroy said. “Sabra could serve as an example for Israeli and U.S. companies and what they can imagine.”