OU Kosher: Bringing the Boom for Business & Consistent Quality to Consumers

July 20, 2005

If the 70’s adage, “you are what you eat” still holds true, we’re all becoming one big kosher world. Ever since the Biblical commandment to the Jewish nation over three thousand years ago, keeping kosher has remained a vigilant way of life for millions of Jews. But who could have predicted that kosher food production would become a booming business for thousands of food companies across the globe?

What is motivating more and more food industry executives to jump on the kosher certification bandwagon? Perhaps the more appropriate question – what’s driving an ever-increasing number of consumers to look for the kosher symbol on the products they buy? “Americans spend close to $486 billion on food and about $150 billion of that is kosher-certified, whether they know it or not,” reports Menachem Lubinsky, President of Integrated Marketing Communications, a New York company that researches the kosher market. And those consumers who specifically look for kosher products spent $6.65 billion in 2002, a figure that grows every year. Marketing experts report that obtaining kosher certification has become a surefire way for a company to gain market share for a minimal investment.

Choosing the Cadillac of Kosher

One need only take a walk down the aisles of any supermarket in virtually every city and town across the country to identify the most popular kosher symbol. Designed in 1923, in response to a request from Heinz for a logo on its newly certified products, the now familiar letter “U” within a circle appears on more than 400,000 food and food-related items ¬ over 60 percent of America’s kosher-certified products, making it synonymous with the very concept of kosher food.

“OU is the Cadillac of kosher,” says Rabbi Yisroel Bendelstein, Rabbinic Coordinator (RC) at the OU. “It represents the largest and most trusted kosher certifying agency. Companies know that products bearing the OU emblem have the greatest market penetration and, in turn, accrue the greatest profits.” In over 70 years of kosher-certifying service, the OU has developed into the largest organization of its kind. Close to 300 OU Rabbinic Field Representatives (RFR’s) regularly inspect nearly 6,000 certified plants in 82 countries around the globe. A team of Rabbinic Coordinators, supported by an ingredients registry staff and a comprehensive computerized database, provides unmatched depth of expertise in halacha (Jewish Law) and food technology.

Companies, previously leery about the cost of certification, soon realize that the benefits of OU supervision dramatically outweigh the very reasonable charges. They come to view it as minimal investment for maximum gain. Aside from the substantial monetary profit of going kosher, these food operations enjoy the advantage of working with the largest rabbinic and research staff, trained in food science, who thoroughly understand the manufacturing process, the raw ingredients, the chemistry of additives, and the details of the procedure each manufacturer employs to convert raw goods to finished products. The rabbis make themselves available to field questions and provide support 24/6 (in deference to the Sabbath). “Everyone we have worked with at the OU has been both informative and helpful,” says Scott Werme, Plant Manager for Agri-Mark, Inc., producer of butter and skim milk powder, located in Springfied, MA. Mr. Werme reports that Agri-Mark, Inc. has witnessed advancement in market penetration and a 25 percent increase in sales.

The rabbis make themselves available to field questions and provide support 24/6 (in deference to the Sabbath). “Everyone at the OU has been informative and helpful,” says Scott Werme, Plant Manager for Agri-Mark, Inc., producer of butter and skim milk powder, located in Springfied, MA. He reports that Agri-Mark, Inc. has increased market penetration and witnessed a 25 percent growth in sales.

As kosher consumers develop a more refined palate, many will actually call a company inquiring as to whether a particular item is available in a kosher form. The marketing team records the request and, after considering the idea, chances are good that it will contact the OU for certification. “The advantage to OU certification is its solid infrastructure,” says Rabbi Gordimer, RC at the OU. “When a product becomes kosher, the whole kosher base notices it. If a company were to try to target a group of two million people, even on a one-time basis through the regular media, they would pay a hundred times what it would cost them for a full year of OU certification. The value is such a highly marketable tool.” Once a company certifies a product, it often calls on the OU again to certify more products. “That’s a strong indication that they’ve profited.” Kosher Consciousness at Home and Abroad Along with the established draw of the Kosher-observant Jewish population, the market is witnessing an upsurge in “kosher-conscious” Jews, non-Jews with religious dietary restrictions, such as Muslims and Seventh-Day Adventists, as well as individuals with dietary health issues (such as lactose intolerance). And then there’s the rest of the population that regards the OU symbol as an assurance of wholesomeness and quality. The OU kosher symbol has come to be as universally recognized and respected as the Good Housekeeping Seal.

This demand has lead retailers like Wal-Mart, Albertson’s, Publix, Ralph’s Food 4 Less, Kroger, Safeway, Key Food, Pathmark, Winco Foods, Shop Œn Save, Shop Rite, Dominick’s, or Trader Joe’s to greatly increase the number of kosher products they stock. In the business world, the bottom line is sales. Food companies and supermarkets that carry kosher certified products find that the tell-tale symbol boosts a product’s selling power.

“Our business has grown rapidly over the past 14 years and being able to supply OU certified kosher products has definitely aided this growth,” says Dawn Sharkey, Kosher Coordinator at Van Drunen Farms, in CA, a major producer of frozen and dried food ingredients for the food industry. “Our kosher ingredients can be found in numerous markets, cereals, baby food, sauces, and snack foods worldwide. Having the OU symbol instills confidence that our products are made of the highest quality ingredients, under the highest quality conditions.”

Yakov Yarmove, Corporate Ethnic Category Manager, Ethnic Marketing and Specialty Foods for Albertson’s national chain of supermarkets, positions himself between the current kosher boom’s suppliers and its retailers. Albertson’s boasts kosher sections in all of its 1,750 stores. For 18 years, he has overseen the buying of kosher products and retail sales promotions for kosher specialty stores and supermarkets with a designated kosher section. “In the last eight to ten years, the kosher category has exploded and expanded from noodles, borscht, matzo and gefilte fish to all kinds of items,” declares Mr. Yarmove. “When it comes to mainline brands, when it comes to kosher, there’s a definite push to bring that item in. Kosher is on the radar now.”

It was only a matter of time for word of the ‘kosher’ economic advantage to reach beyond American shores. According to The Development Council, the global marketing arm and service hub for Hong Kong-based manufacturers, traders, and service exporters, Asian producers have been steadily moving into the kosher business in order to develop specialty foods. “The kosher market has added value for them,” says Rabbi Moshe Elefant, the OU’s Executive Rabbinic Coordinator and newly named Chief Operating Officer.

Add Argentina, India, Spain, Egypt, China and Turkey to that list. Juana Szpigiel of Yanovsky, a major matzah producing company in Argentina, says kosher certification has opened up new markets for her company throughout South America and the United States and reports a 25 percent increase in sales. Mr. Jayaprakash, Export Manager of Agro Dutch Industries Ltd., of Punjab, India, one of the world’s largest companies of fresh mushrooms and processed mushrooms (in jars and cans), says Agro Dutch increased its sales by 15 percent. “OU is our buyers’ requirement,” declares Jayaprakash. Also in India, the Global Green Company reports its sales rising 30 ¬ 50 percent.
“Working with the OU has been a very rewarding experience for Global Green,” says Ashutosh Joshi, Deputy General Manager, International Marketing, “and a personal pleasure as well.”

The following incident illustrates the strength of a good reputation. TABA, a Turkish-based organization that seeks to increase the business volume between Turkish and American companies, organized a workshop with Istanbul Exporter Unions. Many Turkish companies attended. They discussed possible strategies to employ in order to increase sales to the USA. Mr. Altug Metin, President of OU certified Bella Chocolate, and Chairman of Istanbul Exporter Unions, and primary organizer of the workshop, gave this as his chief recommendation to the participants: “Being an OU certified producer is one of the most important parameters for enabling the sale of products to the USA.”

He should know. Metin’s own company realized a 40 percent increase in sales ¬ primarily in private labels in the U.S. and Canada. Mr. Suat Zeytinoglu of SIBAS Gida San ve Tic A.S., a Turkish company that produces sun-dried tomatoes, capers, and pepperoncini, relates a 30 percent increase in sales in the US and Israel, which he directly attributes to his OU certification.

Businesses that want to remain viable and flourishing know that providing the customer with an excellent product must always remain their primary focus ¬ no matter in which country or language. “Having OU certification gives the customer the satisfaction and assurance that the products they are purchasing have been monitored from inception with all ingredients checked and of the highest standard,” says Anel de Silva, Managing Director/CEO, of Heritage Teas Premium Services Ltd., in Sri Lanka.

The Impact of the Kosher Base and the OU Symbol

For the past 40 years, the number of OU certified companies has approximately doubled every decade. Among these are industrial companies that produce ingredients needed by the manufacturing sector. “There is a lot of competition out there and the demand is very clear. The industrial companies need to be kosher to supply the retail market,” says Rabbi Avrohom Gordimer. “There is a clear demand to meet this specification, or they will not be able to sell. They are finding that they must be kosher in order to supply the retail market and to maintain their contacts.”

Burt Flickinger, a managing partner with Strategic Resource Group, a retail consulting firm, stated that the retail chains have set out to bring in a profusion of kosher food. “The national chains saw that they were losing kosher customers, not only during the holidays, but every day of the week,” he said. They took action and reaped the rewards of their strategy. Menachem Lubinsky says that the average supermarket carries 65,000 products, of which 25,000 bear the kosher symbol.

The OU attributes much of its growth in recent years to the private label companies that insist on the organization’s certification. One by one, manufacturers are responding to the demand. “The OU satisfied the requirements of our largest private label customers, so that we could maintain and grow joint business opportunities,” says Lois Ford, President of Bellows House Bakery in North Walpole, NH, producer of cookies, brownies, blondies, and other baked goods. “Certification has also enabled us to quote to larger companies with wide distribution that specify kosher certification as a pre-requisite to quotation. We believe certification gives our company a competitive edge in the marketplace.” Consider the following scenario. A large pastry manufacturer, using hundreds of ingredients, applies for kosher certification. Ten of its regular suppliers lack adequate kosher supervision. The pastry company informs them that they either go kosher or it can no longer use their services. Each time another manufacturer attains kosher status, this domino effect accelerates and the kosher food market rapidly expands further.

Once, the OU had to inform an ice cream manufacturer that due to a lack of cooperation, supervision would be discontinued. The OU distributed notices to that effect. The owner of the company wasted no time phoning the OU’s main office (in an obvious state of panic). “Rabbi, I just purchased this company for $30 million,” he said. “Without the OU, it won’t be worth two cents. Almost all our business is private label supermarket brands, and if we lose your symbol, we will lose most of these accounts.”

Kosher certification’s powerful influence on the consumer continues to impact every area of food production, distribution, and sales. “OU certification adds an element of panache to our accreditation in the food ingredients industry,” says Patricia Penter, Kosher Administrator for Wild Flavors, Inc., in Erlanger, KY. “Customers, familiar with the OU, know that we are holding ourselves to a higher standard, too. The OU’s quality standards are in many ways similar to the business and ethical standards of our company.”

Companies on the production end agree with Penter’s assessment of the OU’s positive affect on their overall operation. “We had to improve our control of ingredient purchasing and receiving,” says Sam Shannon, Plant Manager of Weis Markets Ice Cream, in Sunbury, PA. “This resulted in better record keeping and eliminated mistakes. I really enjoy the challenge of living up to the commitment.”

Keeping an Eye on Quality and Profit

Contrary to popular belief, obtaining kosher certification isn’t achieved through a rabbi reciting a blessing over food products, or, for that matter, an entire plant. Kosherizing a food production or industrial facility requires an involved, meticulous process. With the OU’s state-of-the-art technical capabilities, new companies interested in becoming kosher may undergo a process of equipment sterilization. From the initial application through the possible kosherizing of the plant takes an average of four to six weeks for a new company to become certified; for new products of already certified companies, the process can take as little as a few minutes. “These companies are more than willing to comply with our rigorous kosher program,” says Rabbi Yisroel Bendelstein, “since they know it’s their ticket to acceptance anywhere in the world, maximizing their sales and profits.”

Linking forces with the OU also gains companies a vast resource of information. The OU staff thoroughly understands manufacturing processes, raw ingredients, chemistry of additives and the procedures manufacturers employ in converting raw goods to finished products, implementing all these resources in the kosher certification process. “The fact that we have a large staff allows people to develop an expertise in a certain area or industry,” explains Rabbi David Bistricer, RC at the OU. “Companies often call us for ingredient information or to ask where they can find certain raw materials and I am able to provide them with a list of suppliers. They know they can turn to us.” Valerie Joslin, Kosher Coordinator for O AT KA Milk Products Coop., Inc, producer of assorted canned and bottled dairy and non-dairy specialty beverages, located in Batavia, NY, has worked with the OU for 15 fruitful and instructive years. “The OU has offered an excellent source for networking and obtaining alternate suppliers,” she reports. “Our rabbi understands our production processes and products and assists us with providing our customers with superior kosher products.”

With the quality factor in place, the next crucial step is getting the word out about the product. The OU symbol has time and time again served as a key marketing tool. Valley Research, Inc. in South Bend, IN, an operation that provides enzymes for the food industry, attributes its whopping 75 percent sales increase to OU certification. “OU certification is a market driven requirement for most of our products,” says Theresa Sears, company Vice President. “New markets were opened for us ¬ juice, wine, cheese and more and worldwide. It’s a win-win situation. The kosher program is the best part of my job.”

The OU on the label, and all that it represents, continues to broaden companies’ customer base, opening up countless uncharted markets. “There’s a universal perception of quality when products carry the OU symbol,” says Bill Levine, President of Sarabeth’s Fruit Spreads of the Bronx, NY. “It has allowed us a large private label contract with a company needing kosher certification. New markets, stores carrying only kosher products in New York, Florida, California, Massachusetts and major urban centers, have opened up to us.”

Dick Earle, President of Dakota Brands International, producer of frozen and refrigerated bagels and roll dough, located in Jamestown, ND agrees that having the OU label has been a major contributor to his company’s success within the retail grocery industry. The company also adopted Pas Israel status, a particular kosher stringency that requires a Jewish person to participate in the baking process ¬ which widened his customer base even further. “OU is the most widely recognized and respected kosher certification by both consumers and prospective customers,” says Earle. Perhaps the most obvious demonstration of the impact kosher certification was the public’s reaction to the news of Nabisco joining the OU kosher camp.

Both the national print and broadcast media featured the stories of America’s beloved Oreo’s kosher coming-of-age, as well as Campbell’s Vegetarian Vegetable soup. Ditto the OU’s endorsement of Triaminic Cough Syrup earlier this year, making it the first mainstream over-the-counter medication the OU has deemed acceptable under the kosher dietary laws. No kosher story in recent memory has received the media attention that OU certified Triaminic did, starting with a feature story in the New York Times’ science section and followed by a major AP story. All eight varieties of the liquid decongestant for children now bear the OU trademark symbol. Efforts to develop an OU-certified kosher Maalox are being completed.

Right next to “bagel” and “shmooze,” “kosher” sits securely at the top of the list of the most popular Jewish expressions in the American vernacular. Although we live in a society where trends come and go, as long as people need to eat, they are going to buy food products that assure quality, integrity, and according to all indications – OU kosher certification.


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