I had a conversation today with a manager of an upscale market in Marin.  I told him that I heard he had a decent kosher section.

He told me that he once did, but because of lack of demand, it has dwindled.  As a challah company this concerns us for selfish reasons.

I wondered why did demand dwindle?  Perhaps the demographics had changed?  Perhaps a competitor opened up shop close by?

Or, maybe the problem is that the food in the kosher section is just not good!

When was the last time you went to a supermarket to get some outstanding kosher food?  Did you go there to get that excellent marinara sauce or that really great breakfast cereal?

Chances are you did not.  If you are orthodox, you really have very little choice; you must buy strictly kosher food.  But, if you are not, then the choice is simple.  You can either buy this mediocre kosher product at a premium, or buy a non-kosher product for significantly less.

In reality, the kosher market is really a market that targets the observant Jew.  Outside of New York, Chicago and Los Angeles, this market is not so big.

Kosher foods are normally 10-30% higher than non-kosher foods.  Some people blame the cost of kosher certification.  This is absolutely false.

The real reason is the market for kosher food outside of those three cities is not significant.  As a result, businesses that cater to the Jewish community must increase prices in order to stay in business.

I suggest we concern ourselves with the "Jewish Market" and less with the "Kosher Market".  Before you get too concerned, the "Jewish Market" would only have strictly kosher products.  The distinct feature of the "Jewish Market" is that it will include the whole Jewish community and not just the Kosher Jewish community.

As a result, the market itself will be able to justify lower prices.

What if a company were to target this Jewish market with strictly kosher and high quality foods.  Would the quality of the food be enough to gain enough market share to justify lower wholesale prices?

As a side note, you might have heard that the perennial Manishevitz company was recently bought by a financial services company with little connection to the Jewish community.

This renowned  financial firm knows a good investment when it sees one, and they clearly see a big upside in the high quality kosher food industry. 

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