The B. Manischewitz Company, LLC.

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The B. Manischewitz Company, LLC.

One Manischewitz Plaza
Jersey City, New Jersey 07302
U.S.A.
Telephone: (201) 333-3700
Fax: (201) 333-1809
Web site: http://www.manischewitz.com

Wholly Owned Subsidiary of R.A.B. Holdings
Founded: 1888
Employees: 170
Sales: $48.8 million (1999)
NAICs: 311812 Commercial Bakeries; 311821 Cookie and Cracker Manufacturing; 311422 Specialty Canning

Since 1998, The B. Manischewitz Company, LLC, has been a subsidiary of R.A.B. Holdings, a private specialty-food company. The world’s number one baker of matzo, or unleavened bread, Manischewitz also produces hundreds of other kosher foods, including baked goods, pastas, soups, gefilte fish, and borscht. It also licenses its name to other businesses producing candy, bread, seltzer, and wine. Under the Manischewitz, Horowitz Margareten, and Goodman’s names, the company wholesales its products to supermarket chains, primarily in the United States and Canada. Its parent company, R.A.B. Holdings, operates Millbrook Distribution Services, which distributes a line of natural and organic foods and health and beauty care items to retail chains and stores in the East and Midwest. Historically, Manischewitz kosher products have had their greatest appeal to Jewish consumers, and until recently their fine foods have normally been offered to retail customers only on the specialty shelves of supermarkets. However, R.A.B. has taken steps to broaden the brand name’s appeal by marketing some foodstuffs with wider interest under the Manischewitz label and has urged major retail outlets to shelve them in the standard sections of their stores to compete with other established, brand-name food products.

1888–1929: Rabbi Manischewitz and the Rise of Unleavened Bread

The B. Manischewitz Company traces its beginnings back to the spring of 1888, when Rabbi Dov Behr Manischewitz opened a small Matzoh bakery in Cincinnati, Ohio. He had migrated to that city in the mid-1880s, already possessing a reputation for both scholarship and piety. He had been one of the students of the famous Rabbi Israel Salanter, the Lithuanian-born spiritual leader in the Musar movement which stressed that piety did not require devout Jews to live reclusive lives and strove to reconcile the beliefs of traditional Judaism with the need to meet community obligations and participate in public affairs.

Rabbi Manischewitz brought with him a thorough knowledge of the sacred dietary laws of Judaism. He had been the personal shochet of the Gaon of Salant, overseeing the ritual preparation of foods in strict accordance with those laws and safeguarding their purity or kashruth. In Cincinnati he started out as a part-time peddler and shochet for the Orthodox Jews in his community, and it was largely from his spiritual concerns that he set out to make kosher unleavened or matzoh bread for Passover, first for his family and a few friends, but soon for many of the devout Jews of the city. His bakery soon evolved into a successful business, innovative and prosperous, though never inattentive to the spiritual needs of its customers.

By the end of the century, demand for his matzoh bread had become so great that Rabbi Manischewitz turned to cookie-making technology to keep up with it. An important innovator, he introduced the use of gas-fired ovens, replacing the older coal stoves being used by other Jewish bakers. The newer ovens allowed a much more careful control of the baking speed, insuring a consistent and standard quality to the bread. He also introduced portable traveling-tunnel ovens, and was the first to package his matzos for shipment to places beyond the immediate neighborhood of his bakery. He even began shipping his matzos overseas, to such diverse places as England, Japan, France, Hungary, Egypt, and New Zealand. His bright, clean bakery would become a model for future kosher bakeries, both in America and abroad.

Wholly under the control of Rabbi Manischewitz and his sons through the first three decades of the 20th century, the company thrived as a private company, meeting the needs of a growing Jewish population in the United States, especially during the sacred Passover holy days.

1929–71: Good Growing Years Despite Depression and War

In 1929, the year of the great stock market debacle and the onset of the Great Depression, Manischewitz went public and began trading on the Cincinnati Stock Exchange. Because of the ongoing demand for the company’s baked goods, and despite the grim economic situation in America, by the next year the company was able to build a second factory. Located in Jersey City, New Jersey, the plant quickly became the model for all new machine-made matzo bakeries world wide. Closer to a much larger Jewish population than that of Cincinnati, the new factory also made distribution of the company’s product more efficient and quickly enlarged its customer base. The Manischewitz label was soon a dominant one in ethnic grocery stores and delicatessens in the larger East Coast cities. Thanks to the technology and efficiency of the New Jersey factory, in 1960 Manischewitz was able to close down the Cincinnati facility altogether.

The company also took pains to retain and expand its customer base within the Jewish community. During the 1930s and 1940s, the golden age of radio, the company also sponsored Yiddish programs—programs whose primary audience were the large Jewish immigrant population that settled in New York and other cities during the first half of the century.

In 1940 Manischewitz produced its first Tarn Tarn cracker. It signaled the initial departure from its line of matzo products. About the same time, in a leasing arrangement, it began marketing Monarch wines under the Manischewitz label. Monarch Wine, established in Brooklyn, New York, in 1934, had begun making sacramental wines for use on holy days, quickly replacing the homemade wines that until then filled that need. Growth in its product line encouraged the company to form the B. Manischewitz Sales Company, as distributing division of the firm. Later, Manischewitz would license other companies to use its established name, a principal example being the Canan-daigua Wine Company, which for several years has made a line of kosher wines under the Manischewitz label.

Like other kosher food producers, Manischewitz found new customers in the tragic events of World War II and its aftermath. Tens of thousands of Jews arrived in America at the end of the war, many of them survivors of the Holocaust. More exiled Jews came in 1956, after the Hungarian revolt against the Soviet-backed communist dictatorship. Two years before that, in 1954, the company had acquired its processing plant, located in Vineland, New Jersey, where it produced gefilte fish, chicken soup, and borscht, three of its signature foods. It was filling a strong need of many of the new immigrants, who were putting new life in the U.S. kosher food industry. Even then, however, it was also clear that the customers of the kosher-food industry were not exclusively Jews. In America, more than half were Muslims, Seventh-day Adventists, and others who for religious or health reasons favored kosher foods.

1972–97: New Management, Acquisitions, and Sellout to Kohlberg & Co

The five sons of Rabbi Dove Behr ran the business until the founder’s grandsons took over in the 1960s. They continued to run the company until 1972, when they turned its operational reins over to a team of professional managers. However, majority ownership of the company remained with the Manischewitz family.

Further growth followed. In 1981 the company entered into a licensing agreement with Goodman’s, makers and distributors of a line of matzo and matzo products. Three years later, in 1984, the company acquired various assets of Horowitz Marga-reten, including its name and trademark, and began marketing a line of kosher foods under that name. Its various products also became OU certified in that same year, meeting the strict standards of the Kashruth Division of the Union of Orthodox Jewish Congregations of America.

The company remained under the control of the Manischewitz heirs until January 1991, when it was purchased by Kohl-berg & Co. and once again became a private company. Kohl-berg appointed Donald J. Keller to the chairmanship of the reorganized company, a post he still held in 1998 when he became chairman of Vlassic International, the specialty food spin-off of Campbell Soup Company.

The new managers ran into an immediate legal problem when Manischewitz was accused of a price-fixing policy implemented during the 1980s and was fined $1 million by a federal court in New Jersey, despite the fact that the company, strictly a wholesale maker of kosher foods, had no control over what retail outlets charged for its products. However, despite the negative publicity involved, the company continued to thrive, in part because its products appealed to many health-food faddists who were looking for products low in cholesterol. In 1996 Integrated Marketing Communications claimed that the number of kosher consumers in America included about two million Jews and five million non-Jews, with a market potential that would continue to grow rapidly.

Company Perspectives:

Deliriously different for over 100 years.

1998 and After: Purchase by R.A.B. Holdings and New Strategies

On May 1, 1998, Millbrook Distribution Services, a subsidiary of R.A.B. Enterprises, a company owned and headed by Richard A. Bernstein, the former chairman of Western Publishing, completed a purchase agreement with Kohlberg, buying Manischewitz for about $83.8 million in cash, $38.8 million in debt repayments, and $2.1 million in expenses. Millbrook, a wholesale distributor of health care, beauty care, general merchandise, and specialty food items maintains four primary wholesale distribution centers located in Leicester, Massachusetts; Greenville, North Carolina; Harrison, Arkansas; and Ozark, Alabama. These service about 10,000 retail customers in 40 states.

Bernstein appointed Dennis M. Newnham president and CEO of R.A.B.’s new subsidiary and put in a place a new marketing strategy. This was prompted in part by quickly changing marketplace realities and promising projections, including Integrated Marketing’s claim that by 2000 regular kosher consumers would grow to nine million and that another 36 million potential kosher consumers could be served by the industry. Between 1977 and 1997, the number of kosher-certified food items available in American stores had risen from 1,750 to 45,000. In 1997 sales of such items totaled $47 billion, with less than ten percent of those sales being made to people who bought the items because they were kosher-certified. With the new health-conscious, low-fat ingredients in many foods, many companies were meeting dietary and sanitary standards required for certification, eliminating, for example, animal fats from products containing dairy products. A major example was Nabisco’s celebrated Oreo cookie, which qualified for certification in 1997 and within a year saw its New York-area sales increase by 160 percent. Clearly, B. Manischewitz had to undertake some bold and innovative measures or face being edged off supermarket shelves by the products of such foodstuff giants as Nabisco. The strategy, requiring the cooperation of retail outlets, called for moving the company’s products from specialty-food aisle shelves onto the regular shelves. It also called for the manufacture of new products that could compete with major brands that were now meeting the requirements for kosher certification. The faith and pride in Manischewitz products was evident in Bernstein’s quip that he would put the company’s kosher chocolate chip biscotti up against any biscotti in the business. The problem was, said Bernstein, that the company’s premium, high-quality products, didn’t “get the eyeballs of Americans” because they were in the kosher department.

In many ways, the new strategy called for some risk taking. When R.A.B. acquired the company, its annual sales were just over $50 million, almost half of which were made during Passover. Its products still retained their ethnic identity, appealing largely to Jewish customers who bought them, not just for their high quality, but also because they met the specific dietary requirements of their religion. The hope was that the Manischewitz name, so long bound to high-quality foodstuffs, would help in the transition to mainstream marketing. So too would its new image, as the company began introducing such products as banana-split and rocky-road macaroons.

In late 1999 the company had the physical plant necessary to meet its full-store integration plan. The Jersey City facility was capable of baking over 600,000 Ibs. of flour per week. It produced about 250 million sheets of matzo a year, making it the largest producer of matzo in the world. Also, it was developing a new line of “good for you” snacks at its Jersey City plant, where it also maintained a warehouse from which it distributed just over half of all Manischewitz products.

The Vineland, New Jersey, facility manufactured all of the company’s canned and jarred products, including old, familiar favorites like gefilte fish, chicken soup, and borscht. The plant was primarily a hand-pack processing operation stressing careful attention to quality and flexibility. Workers there packed about two million pounds of fish and one million pounds of beets each year. The Vineland warehouse was responsible for slightly less than half of the distribution of Manischewitz products.

The company marketed approximately 400 stock keeping units (SKUs) and also licensed its name for additional products, the most significant of which was wine. It was also developing more products designed to compete with comparable items made by other foodstuff manufacturers. For three straight years, from 1997 through 1999, Manischewitz was the fastest-growing noodle company in the United States. Its broadening line of good tasting, healthy consumer foods had in fact made it a leading candidate among its various retail customers for full-store integration of its products, a move that one major outlet, Wal-Mart, already made. The company was giving new meaning to “Man, oh Manischewitz” as it continued its transition onto mainstream shelves.

Principal Competitors

G. Willi-Food International; The Hain Food Group, Inc.; Aron Streit, Inc.

Key Dates:

1888:: Rabbi Dov Behr Manischewitz starts business, baking matzo for family members and friends.
1929:: Company goes public, trading on the Cincinnati Stock Exchange.
1930:: Company opens second factory in Jersey City, New Jersey.
1940:: Manischewitz introduces its first non-matzo product, the Tam Tarn cracker.
1954:: Company purchases a processing plant in Vineland, New Jersey, for the manufacture of borscht, chicken soup, and gefilte fish.
1972:: Manischewitz family turns business operations over to a professional management team.
1981:: In a license agreement, the company begins manufacturing and distributing Goodman’s matzo and matzo products.
1984:: Horowitz Margareten, an additional product line, is acquired by Manischewitz; the company becomes OU certified.
1991:: Manischewitz family surrenders control of business when company is sold to Kohlberg & Co.
1998:: Company is purchased by R.A.B. Holdings, Inc.