Strauss Group, Israel’s second-largest food and beverage company, has become, over the past few years, an international corporation with a steadily growing part of its business conducted outside of Israel. The Group employs 11,600 people and operates nineteen production sites in sixteen countries. In the last six years the Group has consistently achieved growth that more than doubled the volume of its business during that period, generating NIS 6,245.9 million (around $1.7 billion) in turnover at the end of 2008, of which 47% came from international activities.

The Group is built around three core businesses: Strauss Israel, which focuses on two major consumption trends: Health & Wellness and Fun & Indulgence; Strauss Coffee, which incorporates the coffee activity of the Group and is fast becoming a significant global company; and Strauss North America, which incorporates the Mediterranean dips and spreads company Sabra, with product lines that target the health and wellness trend, and the Chocolate Bar chain Max Brenner that targets the fun & indulgence trend. In addition to these businesses, Strauss is engaged in the start-up H2Q water project, which has recently completed its technological development phase.

The Group also collaborates with a number of leading multinationals – Danone, PepsiCo and Lavazza, and is traded on the Tel Aviv 25 Index, which includes the largest public companies in Israel.

The Strauss Way

Strauss’ core mission is Creating Wonders Out of Basics, and its core values are; Caring & Daring, Passion & Responsibility, and The Team. This mission and these values encompass the story of a family-owned company that began 70 years ago in a shed with two cows and has evolved into a global food & beverage company, operating according to international standards, with a top position in emerging markets. Operating in relatively traditional categories the company has managed to take its core competencies outside of Israel, conducting processes and changes designed to adapt its operation model for global expansion, responding to developing needs in the food field, while remaining passionate about food, love for people, commitment to quality and respect for local cultures and food consumption traditions in every country where it operates.

As part of the Strauss Way the Group defines its visionary goals once every five years and manages core processes from its corporate center, which facilitate its continuous leadership position.

Over the past year, the Group focused on implementing Strauss’ new corporate identity process, mainly in Israel, and it intends to expand this process into its countries of operation in the years ahead.

Growth Philosophy

The high expansion rate experienced by the Group over the past six years is the result of the successful implementation of a growth philosophy that sets the Group apart from its competitors. This philosophy is based on a combination of activities, focusing on major growth trends in the food industry and the development of each of them in the geographical regions that possess the greatest growth potential. The Group invests massive resources in developing the uniqueness, differentiation and competitive advantages of each of these activities. All processes are expressed in a detailed strategy that has been defined for each activity.

Strauss Israel

Strauss Israel is the Strauss Group’s home base and by the end of 2008 accounted for approximately 53% of the Group’s total business turnover. The Company’s brands for all of its core categories are leaders in the Israeli food market. Strauss Israel’s activities focus on Health & Wellness and Fun & Indulgence, and it manufactures, markets and distributes many of the Israeli consumer’s preferred products. The Coffee division, which is managed by Strauss’s global coffee company, is also active in Israel.

In 2008 Strauss Israel’s sales, excluding the Coffee business, totaled NIS 2.7 billion, and including the Coffee business, totaled NIS 3.2 billion.

Strauss Coffee

Currently, Strauss Coffee is the sixth largest coffee company in the world in terms of green coffee consumption and over the last six years has been one of the world’s fastest growing coffee companies. During this period Strauss Coffee tripled its size, growing from NIS 1 billion in 2002 to NIS 3.2 billion at the end of 2008.

Strauss Coffee’s activities focus on the R&G (Roast & Ground) sector and other complementary coffee products (instant coffee, chocolate and cocoa powders, cappuccino, espresso, and organic coffee); and services in the coffee category, particularly solutions for AFH (Away-From-Home) coffee consumption. The Company enjoys a leading position in coffee markets in Israel, Central and Eastern Europe, and Brazil. It is ranked as the Number 1 or 2 player in all markets where it operates (with the exception of Russia).

The geographic clusters in which the Company is active today include; Israel, Brazil (through a partnership with the Lima brothers in Santa Clara), Poland, the Balkans (Romania and Bulgaria), the former Yugoslavia countries (mainly Serbia), and the former USSR countries (mainly Russia and Ukraine). The green coffee procurement center which serves the entire Group is located in Zug (Switzerland). Additionally, the Group owns green coffee processing plants in Brazil, which export coffee for the Group’s activities as well as for external customers worldwide.

In 2008 the leading private equity fund TPG Capital entered the Strauss Group as a partner (25.1%) against the allocation of Strauss Coffee shares with an Enterprise Value of $1 billion pre-money. In the next few years the Group plans to continue, and even accelerate, Strauss Coffee’s growth and expansion process.

Strauss North America

Strauss North America currently serves as an important growth engine for the Group.

The Group has decided to grow and develop throughout North America by leveraging Sabra and its extensive know-how in Health & Wellness, a fast-growing category in the region. Simultaneously, Strauss aims to further penetrate the North American market through its Max Brenner Chocolate Bar chain, a unique concept that quintessentially captures the Fun & Indulgence trend.

Sabra Refrigerated Dips and Spreads

In August 2005 Strauss acquired 51% of Sabra, a leading hummus and Mediterranean salads brand in the U.S. This acquisition resulted from identifying a unique opportunity in the ethnic and Mediterranean foods category, which is growing rapidly. The acquisition created a platform for the Group to expand its refrigerated salads business in the North American market, a category in which Strauss possesses extensive experience and know-how in production, technology and marketing. Following the acquisition, Sabra’s strategy was redefined with the aim of creating a new consumption field in the U.S. for fresh, ethnic, authentic and healthier dips, and the Group subsequently began taking steps to realize this strategy. In view of Sabra’s success and the great potential of this category, food giant PepsiCo recently became a partner (50%) in Sabra, and today the business is managed as a partnership between Strauss Group and PepsiCo.

Strauss has turned Sabra into the fastest growing brand in the refrigerated dips and spreads category in North America, leading the hummus category with a market share of 39% (as at February 2009). Strauss plans to leverage Sabra as a platform for continued expansion in North America.

In 2008 Sabra’s sales totaled approximately
NIS 300 million.

Max Brenner, a Unique Chocolate Bar Concept

Max Brenner presented the Chocolate Bar to the world as an innovative retail concept characterized by a unique chocolate culture that strengthens the social experience and the fun of eating and drinking chocolate. During the last few years Strauss has invested enormous effort towards developing the prestigious Max Brenner chocolate brand, which has proven itself as a global indulgence concept in various parts of the world.

Max Brenner has 24 Chocolate Bars operating around the world: 6 in Israel, 2 in the U.S., 2 in the Philippines, 1 in Singapore and 13 in Australia.

In 2008 Max Brenner’s sales totaled NIS 94.8 million.

Strauss Ice Cream

Strauss Ice Cream is not included in the Strauss Group portfolio and has remained under private ownership, with 51% of the company owned by Unilever, and 49% owned by the Strauss family.

Social Responsibility & Community Involvement

Strauss Group is characterized by seventy years of caring, concern and involvement in the community. CSR became a major part of the corporate strategy. Strauss formed a CSR management policy, launched a global Code of Ethics which was integrated into all Group activities worldwide, developed a policy for the management of corporate governance, environmental protection, and diversity & inclusion as an intra-organization focal point which is increasingly manifested in the Group’s social involvement plans. In addition, Strauss published two Social Responsibility Reports, for 2007 and 2008, which include the company’s effects on, and performance in, economic, financial, social and environmental issues.

These processes were accompanied by various activities to create a dialogue with the Group’s stakeholders as a basis for transparency and constant improvement in this field.

In accordance with the Group’s commitment to promoting corporate responsibility at the global level, in 2008 Strauss joined the UN Global Compact organization and the 4C organization that promotes fair coffee trade. For the past five years, the Group’s social responsibility plan has received public recognition, and Strauss is the highest ranked company according to the Ma’ala Index for social responsibility among Israeli companies.

Strauss’s Annual Financial Statements has also received the highest-possible “A” rating by the GRI organization.