Kosherfest : More than holy and healthy, Big Kosher is big money


kosher golden egg

Kashrut in America is a $12.5 billion mitzvah, according to a market estimate by the consulting firm Lubicom, and it’s growing at rate of 12% per year. (The firm’s CEO, Menachem Lubinsky, is also the founder and maestro of Kosherfest.) Other studies indicate that in a typical US supermarket more than 60% of products carry kosher certification. The figures are staggering, given that strictly-kosher Jews in the US number only a few hundred thousand.

OCDG: $12.5 Billion is a minimum “estimate”… meaning the actual number is much higher but this is what they will admit to. Also concerning the 60% figure… I’d say that’s astoundingly low given that it’s nearly impossible to find items that DON’T have kosher certification.

Trust is the lynchpin of the multinational kosher business. If people were ever to lose faith in the rabbinical emblems, just as the Golem returns to dust when the mystical letters are erased from his forehead, the industry would disintegrate before the next Sabbath. The trade depends on the rabbis, and the rabbis depend on their good names.

This is going to be unsurprising to any regular TUT reader but a few years ago there were many articles about how unhygienic and non-kosher the kosher industry actually was. One of the better known names involved was Hebrew National… apparently they answer to a lower authority. Trusting a rabbi is deadlier than trusting a den of vipers.

Times Of Israel

A dispatch from Kosherfest, where the made-in-America branding industry is a rags-to-riches international success

NEW JERSEY — With every imaginable kosher brand in one cavernous room — and limitless free samples — Kosherfest just might be the embodiment of an Orthodox Jewish food fantasy. Blintzes in abundance, miniature Maccabees pizza bagels and towers of Manischewitz macaroons sit side by side while two sushi chefs fastidiously prepare endless kosher nori rolls. Down one aisle, nearby traffic is clogged by a multitude besetting the Marzipan booth until a stout man who smells curry diverts the entourage.

Billed as Kosherfest, the massive annual New Jersey trade show is a kind of High Holy Day for the kosher food industry — a gluttonous anti–Yom Kippur.

All morning disciplined Orthodox Kosherfesters — who wait hours between eating meat and milk products — avoid the hot dogs sizzling on various grills, because they weren’t yet done with dairy. Others surrender from the start.

“From 7:30 this morning I’m already fleishig,” one man boasts, using the Yiddish term for having recently eaten meat.

But Kosherfest is not just a tribute to kosher food. It’s an elaborate business meeting, where producers, distributors, vendors, and rabbis vie to one-up the competition and scout out lucrative prospects. Many booths are equipped with adjacent cubicles, some curtained off, to talk numbers and shake hands.

All the samples are free, I realize, because someone else — the consumer — is paying for them. And the dollars are piling up even higher than the macaroons.

Profits from Kosher products are even higher than this tower of Manischewitz macaroons.

Kosher by the numbers

Kashrut in America is a $12.5 billion mitzvah, according to a market estimate by the consulting firm Lubicom, and it’s growing at rate of 12% per year. (The firm’s CEO, Menachem Lubinsky, is also the founder and maestro of Kosherfest.) Other studies indicate that in a typical US supermarket more than 60% of products carry kosher certification. The figures are staggering, given that strictly-kosher Jews in the US number only a few hundred thousand.

All of this begs the question: If the Orthodox pockets are relatively small, then how is kosher business so big?

The answer, according to a 2009 survey by the marketing firm Mintel, is that we’re dealing with a massive bandwagon. Of all consumers who buy kosher products because they are kosher, at least occasionally, only 14% reported doing so because they observe the traditional kosher laws.

Everyone else, it seems, is using kosher certification as a convenient proxy for other concerns: 62% said they consider kosher products to be better quality, healthier, and safer, while the rest explained that they want to eat vegetarian, dairy-free, gluten-free, or even halal — and they trust the rabbis to tell them what’s what.

“The cross-fertilization of society has helped the industry,” Lubinsky announced at a kickoff speech early in the Kosherfest morning. “We’re benefiting from a perception that kosher is better. Now, is it? I’ll leave that question unanswered.”

Trust is the lynchpin of the multinational kosher business. If people were ever to lose faith in the rabbinical emblems, just as the Golem returns to dust when the mystical letters are erased from his forehead, the industry would disintegrate before the next Sabbath. The trade depends on the rabbis, and the rabbis depend on their good names.

“They’re marketing their integrity,” explains Timothy Lytton, the leading scholar on US kosher regulation, in a telephone interview. And so far they’ve been wildly successful.

A hundred years ago in America it was next to impossible to keep kosher. The explosion of mass-produced industrial items baffled the ordinary housewife, who no longer knew what she was bringing into her kitchen. Worse, thousands of New York butchers advertised themselves as kosher but sold treyf, non-kosher meat. New York passed the “Kosher Bill” in 1915 to combat the fraud, but it was so underfunded that it accomplished virtually nothing — except convince a New York court that “kosher” was legally an English word.

Illustrative photo of kosher seals.

The European-style Jewish community structure was left on the boat at Ellis Island, so the rabbis of the New World were helpless. They needed to organize and, the bigger task, to become professionals.

Their evolution spanned decades and a few scandals. Today hundreds of kosher certification agencies, or hasgachahs, inspect factories and shops on every continent, covering half a million products. About a dozen of them fielded booths at Kosherfest, advertising their expertise and scrupulousness (one agency’s booth displayed a beware! sign warning that food at other booths may not be kosher).

The biggest hasgachah of them all is the Orthodox Union, whose trademarked symbol Ⓤ adorns untold billions of wrappers, cans, and bottle caps.

A visit to OU headquarters

Rabbi Menachem Genack, CEO of OU Kosher, greets me in his lower Manhattan 12th floor office. A handsome volume of the shulchan aruch, the 16th century code of Jewish law, lays open on his desk. The section devoted to kashrut is a dense web of protocol for the kitchen: What to do if some butter slips into a meat stew, but you don’t know how much? How about a dairy spoon that grazed a steak?

The solutions are hashed out by rabbis, whose centuries of blistering arguments are shrunken into small type and placed carefully side by side on the shulchan aruch pages, to be further sorted out by future generations.

But my dilemma is easier to sort out: I ask Genack why kosher food is so expensive.

A rabbi sharpens the knife to be used for traditional Jewish slaughter (human or animal?)

“It’s actually not very expensive,” he responds. The kosher consumer, he explains, can now buy most major products and brands while still “paying the same as the American consumer. That was the genius behind the OU.”

He allows that certain items — meat, wine, and cheese — are more expensive when kosher, but claims this is because of multiple kashrut concerns regarding these products and they “require constant supervision.”

But it’s not just the supervision: A kosher slaughterhouse, for example, incurs enormous opportunity cost by simply following the rules. They must discard a significant percentage of animals deemed ritually unfit, and the slaughtering process — performed by hand with special knives that must be constantly checked for nicks — is laborious and slow.

The yield is puny when compared with non-kosher slaughterhouses, so the costs spike.

“It’s not gouging,” Rabbi Genack insists.

In any case, he adds, “the meat and the restaurants — we don’t make money on that. We provide it because we think it’s important for the Jewish community. But the profit of the OU comes from the supervision of industrial plants.”

Genack declines to say how much money OU kosher certification makes a year. Although the OU is a 501(c) nonprofit, it is not legally obligated to disclose its income due to a religious exemption. But he does say the kosher department generates “by far the largest chunk” of the organization’s total revenue.

The OU’s kosher certification is so profitable that it effectively subsidizes most of the organization’s operations, including heavy investments in its National Council of Synagogue Youth (NCSY) and in Yachad, a program for Jewish children and adults with special needs. And nearly all of this cash comes from the certification of thousands of giant industrial plants located all around the world.

What is industrial kashrut?

Rabbi Favish Moster gets up at 3 am in Brooklyn each morning, dutifully immerses in the local mikvah, and then commutes to Dayton, New Jersey to begin his work day as the mashgiach, or kosher supervisor, at the International Flavors and Fragrances (IFF) plant.

“When I first started there,” he tells me over the phone, in a distinct Yiddish accent, “it was mind-boggling. They had more than 2,000 strawberry flavors.”

That was fifteen years ago. Since then the chemical complexity has only gotten worse, but Rabbi Moster adapted magnificently. He managed to write three separate computer algorithms: one to track the thousands of ingredients — “there are upwards of 18,000 kosher ingredients and they come at all times of the day” — another for the production, and a third to track the shipping.

“I was, boruch hashem [thank God], able to create certain macros and formulas that check the data and interpret it in a matter of seconds,” he explains.

Astonishingly, Moster, who studied for years in yeshiva before becoming a mashgiach for Organized Kashrus Laboratories (OK), has never taken a chemistry or computer class.

“I would go to people who gave me a couple of crumbs of information, and I did some research on my own on the Internet,” he says. “I’ve always had a knack for computers.”

At last year’s Kosherfest, Moster was crowned “Mashgiach of the Year” by Kashrus Magazine and awarded a $1,000 check. He downplays his selection as “a draw of the hat,” but considering the occupational hazards, it was well deserved.

“If you step into something on the floor, the chemicals are so condensed that the stink could be absorbed in your clothes for months. I try to be careful,” he says.

At this year’s Kosherfest, I am wandering the aisles in search of a frozen organic tea popsicle that had won Best New Product, when I encountered Rabbi David Moskowitz, CEO of Shatz Kosher Services (SKS), who looked eager to chat.

I’d never heard of SKS, and I soon discover why: He operates mostly in China, certifying industrial ingredients which are later scattered unrecognizably among millions of products. He got his start there 20 years ago as a mashgiach for the Belzer Hassidim, but then went rogue and opened his own operation.

While his handful of employees and limited capabilities are dwarfed by the colossal agencies in the US, in China he enjoys a special edge: He’s learned to speak and read Chinese.

I ask Moskowitz if he gets along with the bigger certification agencies. He smirks.

“As much as possible — we are competition,” he says. Yet he points out that when the Sabbath arrives in the Far East, the rabbis of the competing hasgachahs gather for communal prayers.

“There’s office politics and then there’s yiddishe things,” he explained. “We’re all in the same boat.”

Kosher competition: ‘It’s the American way’

With so many millions of dollars dangling, it’s inevitable that various hashgachahs will compete for prized contracts and the rivalries are evident from booth to booth at Kosherfest.

I pass the COR of Toronto, or Kasruth Organization of Canada, and soon encounter the MK, based in Montreal, which asserts itself — in English and French — as “Canada’s Kosher Certifier.” The MK shrewdly shares a booth with an artisanal chocolatier, so I pause to sample the goods and chat.

“Competition is healthy,” says Rabbi Saul Emanuel of MK, “provided you don’t drop your standards.”

The kosher section at Winn-Dixie’s Boca Raton store.

Well, there’s the rub, and some of the ugliest kosher battles have been fought over these standards. Consider the Triangle-K, a New York certification agency run by Rabbi Aryeh Ralbag. His is a small, family-owned operation that secured some big names: Coca Cola, Drake’s, and Hebrew National.

Ralbag claims the OU and other large agencies badmouthed his hashgachah to the Orthodox community and eventually poached the hugely profitable Coca Cola and Drake’s accounts — which now belong to the OU. (The OU’s Genack, for his part, claims the companies switched for marketing reasons and that his organization never solicits a company that already has a kosher certification, though he alleges that other organizations secretly do so to OU accounts.)

Regarding the big agencies, Ralbag says, “I don’t deal with them. They don’t deal with me. They say my hashgocha is not reliable.”

Divisions like this have led some, like Rabbi Aharon Abadi of kashrut.org, to argue that the large hashgachahs are “businesses with a touch of religion.”

Similarly, law professor Kenneth Lasson wrote in the Baltimore Jewish Times, “more than one prominent Orthodox rabbi has suggested that modern kashrut ‘is two percent Halachah (Jewish law) and 98 percent ego and money and politics.’”

“The basic problem is there’s only one kashrut,” explains Timothy Lytton, author of the recent book “Kosher: Private Regulation in the Age of Industrial Food,” via telephone.

“It’s supposed to be fungible,” because if an item is kosher then it shouldn’t matter which rabbi said so. And yet the agencies must compete in order to win contracts, so they practice “market differentiation,” with each hasgachah trying to convince the client that they provide more reliable service.

The big agencies insist that their standards are actually better. Richard Rabkin of Canada’s COR said that some agencies, lacking effective administration, are in essence “a guy running around like a chicken with its head cut off.” He describes worked at a facility under dual certification for eight years without ever seeing the other supervising rabbi.

Rabbi Chaim Fogelman of OK Kosher says a client once switched to his certification because their previous rabbi would determine if the food was kosher by administering a taste-test.

As for the OU’s standards, Genack states simply, “There’s no comparison.”

While the OU is still the biggest fish (with fins and scales), a few decades ago it was poised to monopolize the field. Genack said on one occasion he consulted his revered teacher, Rabbi Joseph B. Soloveitchik, who warned that an OU stranglehold on kashrut would hurt the Jewish community.

“The OU has the leverage, if it wanted to, to dominate the market,” Genack acknowledges, but says he follows his teacher’s “credo” instead.

“Competition is always good. It’s the American way,” says Genack.

The dot-kosher brawl

The Internet quietly ballooned in 2012 when ICANN, the obscure body that governs domain names, decided to change the rules. Whereas domain names were once tightly restricted to suffixes such as dot-com and dot-gov, they could now be dot-anything.

It was a profound expansion, like shifting television to color from black-and-white.

Organizations began to apply to ICANN for exclusive rights to certain domain names. In November of 2012, OK Kosher applied for the dot-kosher rights, which sent the other hashgachahs into a panic. They worried they would be shut out of an explosive future market, so they joined forces against the OK. An unresolved legal battle ensued.

The annual Kosherfest convention attracts thousands of buyers representing grocery stores, restaurants, Jewish summer camps, schools and more.

I meet with Rabbi Chaim Fogelman, director of public relations for OK Kosher, at the company building in Crown Heights. He says the agency acted out of idealism, not business.

The dot-kosher name “was a wild bullet that was just out there,” he says. “We had information about someone we knew who was trying to get it — not even a Jewish person — and the OK did not feel it would be responsible to let this thing go to just anybody.”

Fogelman further claims that OK Kosher convened the top certifying agencies to a meeting in the Crown Heights building.

“We said said that we should go in it together, and they said no,” Fogelman says. (Harvey Blitz, chairman of the OU’s Kashruth Commision, told Bloomberg that his organization had no advance knowledge of the OK’s bid.) Yet Fogelman also declares that the OK has no intention of limiting the dot-kosher domain name to businesses under their certification.

OK Kosher reportedly paid nearly $200,000 in application fees for dot-kosher, and will spend still more in legal bills.

“What we’re going to do with it, I have no idea,” says Fogelman. “But if somebody asked me fifteen years ago what we’re going to do with the Internet, I also had no idea.”

And that is precisely what alarms the competition.

The joyous miracle of kosher

Anyone with taste buds at Kosherfest, knows that the industry is in the midst of a terrific upswing. Interestingly, the business profits enormously from unexpected directions. Vegetarians and the lactose-intolerant. Hindus and glutenphobics. Health chasers, halal consumers, and hipsters. The popularity is so improbable that one seeks an explanation.

“Maybe God set it up this way to make it easier for the Orthodox community,” offers Fogelman.

Kosher competition is the American way at this year’s annual Kosherfest.

But the current success of kosher certification is undoubtedly tied up with its long history, its progression from the playground of con-men to a label so trustworthy even “the goyim” rely upon it.

Kosher has become, quite simply, an American brand.

But this is an American story, too, formed by the unique mixture of steady free-market forces with a critical Orthodox mass.

“There’s a lot about it that’s difficult to translate to other countries,” says author Timothy Lytton.

The OU’s headquarters is in the heart of the financial district where out front is the Charging Bull statue, the icon of Wall Street. Over Genack’s shoulder I can see the Statue of Liberty standing unobstructed in the window — a view that must cost a fortune.

Yet I’m reminded that the small letters of the Ⓤ, which somehow have swelled into a multinational moneymaking behemoth, are traceable back to the small letters of the shulchan aruch on his desk.

  1. #1 by KPR on 12/08/2014 - 2:41 am

    So a few days ago I was looking to buy a jar of dill pickles. There were two types – ones that had a prominent ‘Kosher’, the word included in the description of the dill pickle (‘Kosher Dill Pickles’) and then plain old ‘Dill Pickles’ by the same maker.

    Upon closer inspection, they both bear Kosher Tax Stamps. Lovely.

    Did you know plastic wrap is now taxed by the Kosher authorities? So too is aluminum foil. Is there one type of aluminum that’s OK’ed by god and anther that the jewish god turns his back on?

    Oh, and the tax exempt status for ‘religious’ organizations should be tossed out along with products bearing the Kosher Tax Stamp.

  2. #2 by organizedcrimedotgov on 12/08/2014 - 2:50 am

    jews and judaism give a bad name to religion. They’ve been behind all the troubles of “religion” since the beginning. Not that I hold blameless those who were silent/neutral/followers.

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