Wissotzky Tea Plans U.S. Expansion

TEL AVIV, Israel

Few companies can boast the resilience of Wissotzky Tea, Israel’s largest tea importer and manufacturer.

Founded in 1849 in Tsarist Russia, Wissotzky became one of the world’s largest tea companies, but lost everything when the Bolsheviks nationalized the company in the Russian Revolution of 1917.

Shalom Seidler, the fifth generation leader of the privately-held, family-owned Wissotzky Tea, recounts the epic tale of his ancestors in his Tel Aviv office surrounded by delicately painted, enamel Russian tea boxes dating back to the late 1800s.

Seidler, Chairman and Chief Visionary officer along with David Cohen, Director of Global Markets, met with World Tea News to discuss the company’s rich history and path towards the future.

At the height of the revolution Solomon (Shalom) Seidler, scion of the founder Klonimus-Wolf Wissotzky, escaped to Poland to continue the activities of company, only to see it shuttered by the Nazis in World War II. Seidler and most of his family perished in the Holocaust but his son Simon Seidler managed to immigrate to present-day Israel in 1936.

Working together with the head office in London, which was established in 1907, he set out to yet again rebuild the family legacy.

Market Leader

Wissotzky today dominates Israel’s tea market. The privately-held company doesn’t disclose revenues, but Seidler estimates a 76% share of the Israeli tea market. Lipton, their closest competitor, owns approximately 12% of the market. Domestic sales account for approximately 92% of company revenues.

The company has enjoyed steady growth of 8-9% annually since 2006, though in the past year growth has rocketed to 20%, due in large part to a widely successful green tea campaign. Green tea sales alone grew 50% in in the last year, and now command nearly 100% of all domestic green teas sales. Wissotzky research shows that the average Israeli kitchen cupboard contains 4.5 packages of Wissotzky tea which, Seidler offers, is excellent ‘throat share.’

David Cohen and Shalom Seidler
   David Cohen and Shalom Seidler

Wissotzky specializes in bagged and loose teas with a selection that exceeds 160 varieties of black, herbal infusions, fruit, rooibos and green teas. Seidler said that the company is firmly committed to branded tea sales, and has aggressively rolled out new products as part of strategy to increase tea consumption, thereby dominating and expanding retailer shelf space.

With 400 employees, the company maintains its own distribution and trucking facilities, servicing 7,000 chain, independent retail, food service, and institutional customers. A new automated production and warehousing facility opened in 2005, meeting international standards including ISO 22000, HACCP and GMP.

Internationally, Wissotzky boasts customers in Canada, Switzerland, UK, Australia, South Africa, and now has its eyes set on mega-tea markets in Russia and the United States.

While firmly established in the U.S. kosher marketplace and marketed on QVC retail TV channel, plans are in development for a major, mainstream rollout in 2013.

Cohen notes that Wissotzky’s advantage as a pioneering Kosher-certified product eventually evaporated as non-Jewish food manufacturers discovered the marketing benefits of rabbinical supervision.

Shalom Seidler
  Chairman Shalom Seidler

U.S. Expansion Plans

With a broader U.S. rollout planned in the first quarter next year, Wissotzky has been developing a dual-track strategy. Facing a market saturated with 162 brands, Cohen plans to pursue the branded specialty market. Seidler, however, hasn’t ruled out acquisition and equity partnership opportunities, though he seems a bit bewildered by skyrocketing company valuations.

Though Seidler and Cohen wouldn’t discuss specific plans, some of Wissotzky related ventures have already found a receptive market – notably their line of all-natural Else’s Story cookies (offered as a private label to Whole Foods).

It also seems likely that Wissotzky will stick with their core competency – hot tea – rather than attempting to enter the U.S. market’s rapidly growing ready-to-drink (RTD) category. Previous efforts in RTD beverages were successful in Israel, at one point landing 65% market share.

“But we simply didn’t have the ability to compete with the large, international beverage companies, which control bottled beverages distribution,” said Seidler. In 2009, Wissotzky discontinued their RTD line.

Whichever strategy Wissotzky pursues in North America, Cohen points to guiding tradition of innovation and flexibility, a necessity for any company to keep up with Israel’s dynamic, start-up mentality.

“Israel is a like a small speedboat, fast and maneuverable, not like a big ship,” he said.
 

COMMENT