Market and Trade Data
Eating Out Is In for
Tourists and Locals in Israel
By Gilad Shachar
FAS Report IS7003
expanding tourism industry and domestic consumers who
enjoy dining out are good news for U.S. exporters, who
sold $376 million worth of food and agricultural
products to Israel in calendar 2006.
tourism industry is expected to fuel demand for the HRI
(hotel, restaurant, and institutional) sector. Last
year, foreign tourists in Israel spent $1.9 billion on
food and lodging, benefiting hospitality outlets that
ranged from luxury hotels to bed and breakfast
tourist visits are expanding long-term, last year visits
decreased about 4.5 percent due to the July-August 2006
Lebanon War. However, despite the decreased visits,
overnight stays increased 1 percent, up to 19.3 million;
foreign tourists accounted for 6.8 million and Israelis
for the remaining 12.5 million stays.
industry experts expect that the number of tourists
annually will exceed 4 million. In 2006, 1.8 million
tourists visited Israel, of which 54 and 24 percent were
from Europe and the United States, respectively.
Israeli consumers and tourists spent more than $3.4
billion on food away from home, with an average 838,000
visiting restaurants every day. Israel’s food service
sector is divided into commercial (restaurant and hotel)
and institutional categories. Israel also has an unusual
restaurant venue — celebration halls, which serve around
20 million meals per year at a cost of $800.
Institutional sales estimates came in between $740 and
$820 million, with the remaining sales in commercial
past few years, consumer buying habits have changed.
Israelis are dining out more and choosing premium foods
at their restaurants, coffee shops, cafeterias, kiosks,
pubs, and bars. Demand for imported food products picks
up during Jewish holidays —Rosh Hashanah (New Year) in
September, Succot (Feast of Tabernacles) in October,
Chanukah (Festival of Lights) in December, and Passover
Restaurant meals of high-quality beef and seafood
account for 30 percent of the country’s total
consumption of those products. Consumption of soft
drinks, mineral water, and wine and beer is also on the
rise. Mediterranean, Italian, Thai, and Japanese
restaurants are favorite destinations, with Middle
Eastern shawarma, falafel, and hummus served in hundreds
of small shops.
outlet sales are estimated at $94 million per year, with
the biggest chains — Pizza Domino, Sbarro, Domino’s,
Pizza Hut, and Pizza Meter— making up half of the
sales. The most popular burger outlets include
McDonald’s, Burger-Ranch, and Burger King.
companies control half of the institutional sector, out
of a total 450 - 500 companies. More than 1 million
institutional meals are served each day. The Israeli
Defense Forces are the largest consumers of the
government entities, which purchase 25-30 percent of the
total meals; the remainder is served at civilian
Countries Compete With the United States?
Israel imported $2.79 billion worth of food and
agricultural products, 12 percent more than the year
before, while exporting $686 million, making the country
a net food importer.
(European Union) is the chief foreign food and
agricultural supplier to Israel, with $1.19 billion in
exports in 2006, or 42.6 percent of Israel’s imports —
almost triple that of the United States. Far Eastern
countries, principally Thailand and China, contributed
$186 million in Israeli imports. Other important
suppliers include Turkey at $63 million, and Brazil,
Argentina, and Colombia with a total $210 million.
and EU suppliers provide the main competition for U.S.
exports. The U.S. industry’s main advantage lies in
standardized regulations for products, food safety,
reliability in supply, and quality. At the same time,
U.S. foods do not always have a fine cuisine reputation,
with local consumers believing Israeli-made products are
of higher quality. Also, shipping costs, import duties,
and import licensing requirements erect barriers to the
market. On the other hand, some U.S. products benefit
from tariff-rate quotas, preferential customs tariffs,
and current favorable exchange rates.
Western EU products are becoming less competitive due to
the exchange rate between the euro and dollar, growing
competition for U.S. exporters is coming from Eastern
Europe, Turkey, the former Soviet Union, South America,
and the Far East.
compete, U.S. exporters need competitive pricing and
high-quality products and attention to Israeli health
and labeling regulations. Nearby EU countries supply
sophisticated foods and beverages to the Israeli market,
and operate with relatively low transportation costs.
law requires that the Rabbinical Council of the Chief
Rabbinate or a body authorized by the council certify
all meat and poultry imports as being kosher. With the
exception of meats and poultry, certification is not a
legal requirement for importing foods into Israel.
However, non-kosher products have a much smaller market,
as the large supermarket chains, hotels, restaurants,
and institutional food services refuse to carry them.
Rabbinate recognizes the kosher certification issued by
many U.S. rabbis, but Israeli importers send Israeli
rabbis to any country to verify food preparation
Food Control Service and Ministry of Health enforce food
regulations in Israeli ports. Because Israeli food
standards and labeling requirements are similar to EU
standards, it is recommended that prospective exporters
consult with importers to assure that standards are met.
food importers sell directly to food manufacturers and
distributors. Only large chains have central purchasing
offices. As most of the HRI sector is widely dispersed,
operators of small bars, cafeterias, and restaurants
tend to purchase products and ingredients in the local
open market or the wholesale market, and buy beverages
and perishables bought through distributors.
identifying a market opportunity, the exporter should
consult with an importer experienced in the HRI sector.
Visits are recommended to establish a good business
relationship. The importer can ease customs clearance
and advise the exporter on complying with
product-specific regulations, such as labeling,
packaging, duties, and sanitary regulations.
Trade Shows Key to Marketing Food and
HRI shows offer good venues for meeting
contacts. The FAS Office of Agricultural
Affairs in Tel Aviv, Israel, recommends
participating in the ISRAFOOD and HOTEX
ISRAFOOD, an international food and
beverage exhibition held annually in Tel
Aviv for HRI businesses, provides an
excellent opportunity to present products to
key food importers, distributors, retailers,
wholesalers, and processors.
Information on ISRAFOOD is available at:
HOTEX presents food display and
restaurant equipment. For information
on HOTEX, go to:
hotels and restaurants usually have their own importing
divisions. Though the large supermarkets may import
directly, most acquire imports through an importer that
is also a distributor. All other HRI outlets depend on
importers usually want to develop a brand name, and will
ask for exclusivity in representing a product for a few
years. Importers also believe that promotion is
essential for increased sales and will ask the exporter
for a partial investment in a promotional campaign.
Prospects for HRI Exports
products are proven bestsellers with continued good
Organic and health food products
cream and sorbets
Olive oil and canola oil
Dairy products and eggs
Almonds and walnuts
Processed fruits and vegetables, including frozen
Prepared cereals, baking mixes, and pastas
Shachar is an agricultural assistant with the FAS Office
of Agricultural Affairs in Tel Aviv, Israel. E-mail: