Israel-based Strauss Group has indicated it will look to make further cost savings in its domestic market.
The coffee giant, which reported higher sales and profits in Israel in November, also plans to up prices on a range of food products sold in Israel. The prices on coffee will remain unchanged.
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Strauss Group is lining up “further organisational efficiency measures” following moves carried out last year.
In November, the company booked higher group sales and profits for the first nine months of the year and improvements in revenue and earnings from its domestic business.
On the changes to the business’ organisation, the company said it wants to “improve efficiency and savings”, while adapting its business in Israel “to the group’s strategy and the macro-economic environment”.
The business said “most of the efficiency” will come from a “reduction in the administrative layers”.
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By GlobalDataJust Drinks has asked how many jobs could be affected. The group employs more than 6,000 staff in Israel.
Strauss Group said the changes “will not include employees who were evacuated from their homes or those who serve in the military reserves”.
The price hikes will be made on confectionery, salty snacks, hummus and Yad Mordechai olive oil “among others”, Strauss Group said.
The company pointed to a “sharp increase” in the prices of some raw materials, citing an 88% leap in cocoa costs, a 60% jump in olive oil and a 30% rise in tahini. Across a year, Strauss Group estimates higher raw-material prices cost it NIS100m.
Some products, including coffee, Yad Mordechai honey and fresh vegetable salads, will not see price increases.
The group said it will update prices for retailers “at an average rate of 1.7%”.
The new prices will take effect on the 1 February.
Strauss Group CEO Shai Babad said: “We are aware of the complex situation in which we operate, and therefore the price increases reflect the minimum necessary in the current business reality.”
The company estimates the implementation of the organisational changes will result in annual savings of “approximately NIS45 to NIS55m”.
In the nine months to the end of September, Strauss Group generated sales of NIS7.86bn, up 11.5% on a year earlier. Income attributable to shareholders was NIS339m, more than double the NIS148m it booked in the first nine months of 2022.
The company’s Strauss Israel division reported an 11.2% rise in net sales to NIS2.3bn. Operating profit was 23.9% higher at NIS263m.
