Out of a total population of about seven million, there are approximately 1.2 million households in Israel (average household size of 3.5 persons) with an average annual household income of about US$28,000.
Despite the relatively small population, consumer awareness for wellbeing/health products is high in comparison to other nations. Due to the diversity and variety of products in the wellbeing market, it is difficult to estimate an exact market size in numbers.
Separate product categories are easier to measure and one example is the market size for nutritional supplements in Israel which is estimated at more than US$100 million a year.
Due to its small yet sophisticated market, the country serves as an excellent test case for wellbeing products. The Israeli market is also populated by a significant base of local manufacturers selling to the local and export markets. Local production accounts for about 25 per cent of the market (varying from product to product). The largest share of the import market belongs to the USA followed by European brands imported mainly from Germany, France, and Switzerland.
The main areas of potential for Australian exporters include homeopathic medicines, nutritional supplements, herbal extracts, functional foods and practitioner products. In order to achieve success in this highly competitive market, resources need to be invested in marketing efforts. Due to the small size of the country, a few hundred thousand dollars can usually produce a marketing campaign with impact on a national level.
Most wellbeing products certified by the Therapeutic Goods Administration in Australia will in most cases overcome regulatory issues in Israel as long as a local representative is appointed in order to apply for an import certificate from the relevant body in Israel (eg. Food Control Administration, Israel Ministry of Health).
Other unique issues that need to be taken into account are package labelling (Hebrew and sometimes other languages such as Russian or Arabic) and Kosher certification for the product (available for most products assuming they are not using animal related products). In most cases, product labels are not allowed to include in writing any medical benefits/claims that the product is supposed to provide for the consumer.
Tax rate for wellbeing products
Custom fees in Israel for imported wellbeing products can vary depending on the product but a rough estimate would be about 12 per cent. It is also important to note that most European Union and American products pay no custom fees as a result of Israel’s free trade agreements with those nations. This creates a pricing disadvantage for Australian manufactured products competing in the market.
Wellbeing products (eg. nutritional supplements, functional foods, natural medicine, etc.) are sold to the public through 200 independent natural product stores, 600 independent pharmacies and about 220 stores belonging to the main pharmaceutical chains in the country.
The large bulk of such products are sold through the two largest retail pharmaceutical chains (eg. Superpharm and Newpharm). Other additional outlets include health clubs and supermarkets. It should be noted that homeopathic products can only be sold through licensed pharmacies.
Among the largest importers/distributors of wellbeing products in the local market are:
Israeli Ministry of Health – www.health.gov.il/english/default.asp
Pharmaceutical Society of Israel – www.psi.org.il/index1.html