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Kosher Food Company G. Willi Pursues Aggressive Growth Campaign

|Includes: G. Willi-Food International, Ltd. (WILC)

In its recent quarterly conference call, G. Willi-Food International (NasdaqCM: WILC), an Israel-based supplier of high quality Kosher food products, announced upbeat expectations for its first quarter FY10 operating results.  Preliminary numbers indicate 15% year-over-year revenue growth and 40% year-over-year growth in operating profit.  The company is the largest distributor of kosher food products in Israel and recently completed a $20 million public offering on March 18.  What this means for the company is that it now has additional funds to pursue capital-intensive growth opportunities in both Israel and the United States.

G. Willi has also engaged in a major advertising campaign to improve brand awareness in its core Israeli market via both television and Internet.  Management has wasted no time in utilizing the recent inflow of cash, and the company plans to invest additional funds in its promising new Israel-based export division, which it sees as a key driver of organic growth internationally.

Management also revealed in the call that the company is examining two new opportunities that could have an enormous contributive effect on future growth.  First, it is negotiating the potential acquisition of an unidentified American firm, which would provide a foothold for the company to further establish its brand name in the U.S.  Second, in response to a question posed in the call, G. Willi’s president and COO alluded to a pending agreement with a prominent American supermarket chain in which the company could become a supplier of private label foods for the chain.

Even without these pending developments, the company expects to see increasing growth from its expansion into the United States, which currently accounts for about 20% of total sales.  Surprisingly, only a small fraction of buyers of kosher food products do so for religious reasons and the company expects to capitalize on the trend toward healthy food alternatives to capture a greater share of the estimated $13 billion U.S. kosher food market.

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