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BREAKING NEWS: PepsiCo Expands Relationship With Hummus Maker

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Food Business News reports:

"PepsiCo, Inc. and Strauss Group, Israel’s second-largest food and beverage company, are partnering to produce and sell fresh dips and spreads in key markets outside of North America. The partnership is the second such joint venture for the two companies, which in 2007 joined to produce and sell hummus, dips and spreads under the Sabra brand."

Now, hummus is something that's piqued our interest here at MVHQ before:

In June, the New York Times reported that, according to market research firm Symphony IRI Group, “Fifteen years ago, hummus was a $5 million business led by a smattering of companies. Today it dominates its sales category, called refrigerated flavored spreads, which has more than $325 million in annual retail sales.”

While others in, say, the fashion industry, proclaim this or that color as “the new black,” the question here is: How did hummus go from a product found almost exclusively in health-food stores and other specialty shops to the “new salsa”?

Peter Klaiber, marketing director for the USA Dry Pea and Lentil Council, said, “Ten years ago, we shipped 90% of chickpeas out of the country. Now we only ship 40%. That’s all because of our new American appetite for hummus.”

“I’d say that part of the popularity of hummus has to do with America’s changing population -- we’re not a blue-eyed blond-haired country anymore,” Jeane Wharton, executive director of the United States Dry Bean Council, told us. “Every time I plan a business meeting, hummus is always on the menu.”

As for hummus ever becoming mainstream enough to capture a spot on the stateside menu boards of behemoths like Burger King, Wharton said, “I wouldn’t doubt it. When I was a teenager, I never dreamed McDonald’s would serve salads one day.”

With mass-market retailers such as Costco and Walmart carrying hummus, some farmers are having trouble growing enough beans to sate the American appetite for the refrigerated-snack aisle's most popular dip.

“It’s amazing how far beans have come,” Wharton says. “One of my California garbanzo suppliers says he can’t keep up with demand.”

Bob Green, executive director of the Michigan Bean Commission, headquartered in a state that doesn't produce garbanzos, believes the uptick in hummus consumption indirectly benefits the rest of the industry.

“Traditional hummus is made from garbanzos, but hummus popularity is bringing up the whole category,” Green informed us. “A lot of different bean items are now becoming available; my gosh, there are bean chips, bean dips. Plus, we’re seeing an increase in hummus made from other types of beans, like black and white beans.”

Green agreed with Wharton of the Dry Bean Council as to one reason behind the skyrocketing popularity of hummus.

“There have been major changes in the ethnic makeup of the country,” he said. “Black bean consumption, for example, went from 20,000 hundred-pound bags in 1980 to about two million hundred-pound bags in 2010.”

But, demographics can’t claim 100% of the credit. Tweaking the traditional hummus recipe (pureed chickpeas, tahini, lemon, and garlic) with the addition of more familiar tastes has been crucial to winning over the American palate.

Mina Penna, a brand manager at Sabra, explained, “Take something that’s new to the American consumer, like hummus, and then add ingredients they know and love, like sun-dried tomatoes.”

“Back home, they would shoot me in the head for doing this to hummus,” Majdi Wadi, CEO of Minneapolis hummus manufacturer Holy Land, told the Times. “I’m making an American product. And this is what Americans want. Flavors and varieties and guacamole.”

“Back home” in the Middle East, they do take their hummus quite seriously.

In January, an Israeli cooking squad filled a 6.5-yard satellite dish borrowed from a local television station with 9,017 pounds of hummus, which set a new Guinness World Record, doubling the previous record set by a Lebanese team four months earlier, which had broken an earlier record held by Israel.

Lebanon fought back this past May with a 22,994-pound serving of hummus, confirmed by a Guinness representative on the scene.

A day later, Lebanon took the competition to another level entirely, bagging the world falafel record with a single 5-ton serving.

Completing the hat trick, Lebanon also holds the world record for the largest plate of tabbouleh, weighing in at 7,825 pounds.

Now, about Kronos Foods doubling its flatbread capacity -- it's not just another unsubstantiated Kronos rumor. No, this time it's for real.

“By doubling Kronos’ flatbread and flatbread pizza crust capacity, we are providing our customers with increased access to an easy-to-use ingredient option that can enhance virtually any menu format,” said Valerie Lester, vice-president of marketing at Kronos.

After searching in vain for some sort of flatbread council that might provide comment on the Kronos development, a call to the Tortilla Industry Association (yes, an actual trade group) went unreturned.
POSITION:  No positions in stocks mentioned.