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May 6, 2005
The rewards of one Zionist dream
SIMON GRIVER ISRAEL PRESS SERVICE
Ofra Strauss embodies the Zionist equivalent of the American dream.
Her grandparents, Dr. Richard and Hilde Strauss, fled Nazi Germany
and set up a small family farm in Nahariya, north of Haifa, in 1936.
Today, Ofra Strauss serves as chair of the Strauss-Elite Group,
Israel's second-largest food enterprise, with annual sales of $850
million US. She's also ranked 45th in the Forbes list of the world's
most powerful businesswomen.
A national celebrity, Strauss is frequently featured in Israel's
gossip columns. She is more admired and has a softer image than
Galia Maor, Bank Leumi's president (the only Israeli ranked by Forbes
as a more powerful businesswoman than her) and Shari Arison, the
owner of Bank Hapoalim, who is ranked by Forbes as the country's
richest woman. Maybe it's because Strauss is associated with food,
rather than banking.
With a law degree from Tel- Aviv University, Strauss left Israel
after graduating with her then-husband Dan Lahat, son of former
Tel-Aviv Mayor Shlomo Lahat, to live in New York, where she worked
for Estée Lauder for five years. The couple returned home
to raise their family in Israel and Strauss entered the family business.
The Strauss family built its empire on dairy products. Richard,
a doctor, and business-minded Hilde wanted a new start in the Palestine
of the mid-1930s and decided to build a dairy in their backyard,
where Hilde would made cheeses for the locals.
The dairy, however, was also used for a more surreptitious purpose
the Strausses, who were active in the pre-state underground
movements, would meet groups of "illegal" immigrants on
the Nahariya seashore and hide them in their cowshed from the British
Mandate authorities, before safely transferring the immigrants to
nearby kibbutzim.
Meanwhile the business grew and Strauss, as it was now called, began
distributing its cheeses throughout the Haifa area. In the austere
early '50s, however, the company encountered difficulties, compounded
by stiff competition from the fast-growing kibbutz-owned Tnuva company.
The Strausses took the strategic decision to move out of cheeses
and focus on a new but promising market ice cream. By 1962,
Strauss was flourishing and with their son and daughter, Michael
and Raya, in the business, they decided to take over a former ice
block factory (ice block distribution to chill food had succumbed
to the growing penetration of electric refrigerators) at the southern
entrance to Nahariya.
Michael and Raya Strauss transformed the family business into a
flourishing nationwide food manufacturer and Strauss became a household
name in Israel during the 1960s.
When Nahariya Dairy Strauss Ltd. celebrated its 50th anniversary
in 1986, the company was a market leader in ice cream, yogurts and
other dairy delicacies (including cheeses cheese production
had been reintroduced) and enjoyed sales of $50 million US per year.
It was during the 1990s that Strauss emerged as a global corporate
entity. To leverage their know-how, strategic partnerships were
forged with international giants Danone, who acquired 20 per cent
of Strauss's dairy division, and Unilever, who took a 50 per cent
stake in the ice cream division. Then, in 1996, Strauss bought a
controlling stake in Elite, the country's biggest manufacturer of
chocolate and coffee. This was a major coup for the Strauss family
at the time, Elite's annual sales of $580 million US were
nearly double those of Strauss.
Shortly after the acquisition, Michael Strauss stepped down as chairman
and president, leaving the newly formed Strauss Elite Group in the
hands of his eldest daughter, Ofra, whom he had groomed as his successor.
Many senior executives in the company (Strauss is dominated by former
Israel Defence Forces officers) felt that the job would be beyond
her. But her low-key style of management, which revolves around
delegating most responsibilities to her senior generals while making
strategic policy decisions herself, combined with excellent financial
results, have earned her grudging respect from both her executives
and her competitors. Arik Raichman, president of Tnuva now
Israel's largest food manufacturer and still Strauss's main rival
paid her a backhanded compliment: "Of course, she would
not have got where she has if not for the family," he said,
"but she is very good."
By 2004, Ofra Strauss had fulfilled her first major target
the merging and streamlining of Strauss and Elite into a single
corporate entity. The fruits of this policy were felt when Strauss-Elite
reported a $35 million US profit for the year, making the company
one of Israel's most profitable enterprises.
The company has acquired well-known local brands such as Yotvata
(dairy drinks) and Yad Mordechai (honey, olive oil and jam), Energy
(cereals) and Max Brenner (chocolate). Strauss has also expanded
into the chilled salads market and has a strategic partnership with
PepsiCo Frito-Lay for salty snacks.
Above and beyond business, Ofra Strauss supports feminist causes
and social action groups to help the disadvantaged and is also committed
to advancing Israel-Diaspora relations (she sits on the Jewish Agency's
board of governors).
Now that Strauss has consolidated the company's domestic base, it
is beginning to expand overseas (international sales now account
for 15 per cent of the company's income). Elite is already the world's
eighth largest coffee manufacturer and the market leader in coffee
throughout eastern Europe and the former Soviet Union. The company
also has a strategic alliance with Italian espresso market leader
Lavazza. It controls some 70 per cent of the local chocolate market
and has turned to international markets for growth, including supplying
chocolate to British supermarket chain Sainsbury.
Richard and Hilde Strauss established Strauss as a small local business
and Michael and Raya Strauss transformed it into a national enterprise,
but Ofra Strauss's corporate vision has made Strauss-Elite the market
leader it is today.
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