Just over a week ago, when I barely had time to eat due to my workload, my fellow New Jerseyians were eating to their heart’s content. Though often publicized in a negative light due to the likes of Jersey Shore and Real Housewives of New Jersey, we also have our redeemable contributions to society. One such example is the annual event called Kosherfest. Held in Secaucus in the Meadowlands Exposition Center, Kosherfest is a tradeshow in which companies and individual entrepreneurs introduce their new edible creations, which, as they name of the event indicates, are all kosher. What started in 1989 as a humble gathering of a few food vendors has mushroomed into a massive two-day fair frequented by 10,000 visitors from 29 countries and 40 states. Attendees include manufacturers and distributers looking for new items to order for their stores, as well as curious foodies. For a $75 ticket in advance, and $90 at the door (a substantial part of the cost goes toward the tight security), one can taste an endless amount of free samples. Producers vie to showcase their goods at this event because it is a cheap, easy way to market themselves and gauge public demand.
The popularity and success of Kosherfest reflects the growing trend in America of eating kosher. The kosher food industry has exploded in recent years, generating $40 billion in sales last year, with a staggering 15% annual growth rate. While only 2% of America is Jewish-and of that amount, barely 15% keep kosher- an impressive 10.5 million Americans eat kosher. Many attribute this shift in eating habits to the fact that foods marked kosher indicate better quality. In economics, we refer to this as signaling: the agent (the company) conveys information to the principal (the consumer). Here, the buyer will choose the kosher option over the non-kosher option because it appears to be of better quality.
While judging quality can be subjective, it is indeed true that kosher foods require far more effort, often painstaking, in the production process. Though the FDA takes measures to ensure that the food we eat is not tainted (manufacturers notoriously use cheaper, often poisonous substitutes in order to cut costs), their standards are much more lax than kosher standards. For example, the FDA allows for an “average of 30 or more insect fragments per 100 grams” in the peanut butter we eat. You read that right-feel free to put down that spoonful you were about to ingest. Fortunately, kosher marked products are virtually guaranteed not to contain these insects because they are not kosher. Thus, the kosher certification label functions as a guarantee of quality assurance to consumers.
The concept of different food trends that indicate better quality is nothing new. For example, we have seen in recent years a rise in demand for organic and non-GMO products. While the legitimacy of their health benefits are subject to speculation, one common theme is that they are more expensive because of the effort that goes into manufacturing. Interestingly, for kosher food, more effort goes into the process of receiving the certification: a company must hire someone from a kosher certification company to monitor the production and ensure that the standards, ingredients, and production all are in adherence with the laws of Kashrut. Of course, they must compensate for this extra cost by charging more. As a result, the price is higher than that of its non-kosher equivalent.
Another trend in the food industry is that of eating gluten-free products. Due to recent medical advances, many now know the cause behind their chronic stomach pains; they fall on the spectrum from gluten sensitive to full-fledged celiac disease. With so many people now realizing that they must remove gluten from their diet, the popularity of gluten-free goods has skyrocketed. By 2018, the market for gluten-free goods is expected to surpass $6.2B; in America alone its growth is anticipated to be in the double digits. While eating kosher has morphed into a food craze, eating gluten-free is more of a diet choice. The two are not mutually exclusive, though, and many presenters at Kosherfest took note. One of the major trends at Kosherfest was gluten-free. Merging two already exploding trends is an ingenious business strategy, as it allows for kosher food companies to tap into the large consumer base for gluten-free goods.
Kosherfest is exciting because it highlights innovation in the world of kosher food. By prohibiting the combinations of ingredients as well as the use of certain ingredients, Kashrut could limit the possibility for innovation as well as stifle long-term growth. In fact, the opposite is the case: people are forced to think outside of the box, with results that showcase incredible creativity. Moreover, while Thomas Edison said that necessity is the mother of invention, we can see today that a great deal of innovation stems from the wider range of possibilities due to the rise in technology. Molecular gastronomy, 3D printing, and synthetic enzymes enable us to tinker with edible creations in ways that were previously impossible. Once at a disadvantage compared to its non-kosher competitors, the kosher food industry now exhibits tremendous growth due to these new possibilities and is a behemoth in its own right.
The unique interaction between producers and consumers of kosher foods has been around for thousands of years, albeit manifested in various ways. Kosherfest is the matured version, adopted to corporate America. A unique characteristic is that there is a sense of excitement in the air. Start-ups can finally showcase what they have been developing for years. This is their opportunity to present what could be the Next Big Thing. Moreover, this event sets the stage for the rest of the year by determining what will be found in the stores. What will consumers respond to? What will fill the void in consumer demand? From a financial perspective, what will generate the highest inventory turnover– the largest number of times that the shelves will be cleared by excited customers and have to be restocked? With the combination of my two favorite things-dynamic business and tasting new foods, attending Kosherfest is high up on my bucket list. Chanukah present, anyone?