- Kayco, a major kosher food distributor, has agreed to acquire The Manischewitz Company, a large manufacturer of kosher foods. The deal doesn't include Manischewitz's Season Brand of canned fish and other products, according to Hamodia.
- A purchase price and other details about the transaction were not immediately available. The two companies said they will complete the sale in the near future and release further details at that time.
- Manischewitz was founded in 1888 in Ohio by Rabbi Dov Behr Manischewitz following his emigration from Prussia. The company sells kosher wine and grape juice, matzo, gefilte fish and other products. Kayco owns a number of kosher food brands, including Kedem, Elite, Sabra and Fox’s U-Bet, and it distributes many more.
Manischewitz has gone through a number of ownership changes during its long history. After decades as a family-owned private company, it became a public corporation in 1923. It stayed public until 1990, when it was taken private by Kohlberg & Co. for $42.5 million.
In 1998, Richard A. Bernstein bought the company from Kohlberg. He sold it to Harbinger Capital in 2007. In 2014, Sankaty Advisors, part of private equity firm Bain Capital, purchased Manischewitz.
The company opened a food manufacturing facility in Newark in 2006, but that plant closed in 2017 and 169 people lost their jobs. Given the recent plant closure, Kayco could have gotten an especially good deal on Manischewitz.
It's not hard to see why Kayco would want to pursue this acquisition. Manischewitz is the world's largest matzo maker and one of the largest kosher brands in the U.S. As a legacy company, it is a household name among many Jewish consumers, so the association would no doubt benefit from Kayco's extensive distribution network and add heft to other kosher brands it owns.
Kayco formed after a merger between Kedem Foods, Kenover Marketing and B&W Foods, according to its website. Since Kayco is now one of the world’s largest distributor of Kosher foods, Manischewitz will only continue to bulk up its specialty portfolio.
Kayco is owned by the Herzog family, which also owns Kedem Wine Corp., a leading producer and distributor of wines in the U.S. Besides the successful Manischewitz matzo business, it would also gain control over the Manischewitz kosher wine and grape juice brands.
According to Hamodia, Kayco would be "expanding its hold over the manufacture and distribution of kosher food" with this acquisition. Because the two companies deal with similar products and presumably have some operational culture in common, it shouldn't be difficult to integrate them once the transaction takes place. It may also help to stabilize the ownership of Manischewitz going forward. And because Kayco already operates in the kosher space, the new owner isn't likely to have problems maintaining the manufacturing standards as outlined in the Bible.
The market for kosher food is valued at $24 billion and projected to grow 11.5% by 2025, according to Kosher Network International figures reported by Supermarket News. Kosher items tend to drive up the value of grocery purchases since baskets containing them are three times the dollar value of those without.
Kosher has also become one of the most popular product claims on food items, so those food makers taking the time and trouble to get kosher certification may have a lot to gain by advertising it. According to Food Business News, distribution of kosher food is growing. Last year, 33% of kosher products were also gluten-free, 25% had no genetically modified ingredients and 22% were without additives or preservatives. These assets check a number of boxes for today's consumers — regardless of religion — and could put Kayco in a prime position going forward.