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Family brotherhood: the well-known milling plant that is passed down from generation to generation - voila! money


Highlights: Yaakov Malach became the sole owner of the company in 1992. He works at the factory with sons Yoav (36, CEO), Mickey (49, CFO), and Yuval (47, VP Marketing) The mother of the family, Tzipi, who until two years ago managed Achva's customer service, chose to devote herself to her grandchildren. The two factories together employ 265 workers who produce a wide range of tahini, halva, bakery products (stir/yeast/sugar-free/cookie-free cakes)

The Malach family jointly manages the Achva milling plant. We met them for a chat, to hear what it's like to work with the family and why they reduced the price when everyone around them was expensive.

Yoav, Jacob, Mickey and Yuval. Angel Family Members/PR

In 1970, when he was discharged from the IDF, Yaakov Malach began working as a regular laborer at Achva, which was founded in 1929 by four families originally from Turkey, Greece, Russia and Poland. He was initially engaged in transportation, packaging and manufacturing. After six months, he entered as a junior shareholder in the company. Within a few years, each of the partners sold his share to him, and in 1992 he became the sole owner of the company.

Now, on the occasion of Rosh Hashanah, one of the most family-oriented holidays, Angel, 73, and three of his four sons who continue his path, talk about the intergenerational transfer that has recently taken place at the company, the plans for the future and the steps that have enabled the father of the family to turn a company that started out with 10 employees into a huge production plant whose sales turnover is expected to amount to NIS 2023 million in 240.

Achva factory. Yaakov Malach became the sole owner of the company in 1992/Tomer Burmad

From the Academy to Grinding

"Unlike my sons who came from academia, I studied economics with my grandmother," says Yaakov. "My grandmother never paid interest in the bank because she was never in overdraft. Over the years, I have adopted the grandmother's theory. We walked heel to thumb, advancing slowly.

I could have taken the help of the banks, progress could have been faster, not sure safer. My sons, when they got into the business, said at the beginning: 'Dad, why don't you leverage? The bank will give you what you want, speed up processes.' But I continued with the grandmother's approach, and I'm glad that they, too, accept this conservative approach."

In Achva's production complex, inaugurated in 2010 in the Ariel industrial zone, there are two factories: one for the production of tahini and halva, and the other for the production of baked goods. The two factories together employ 265 workers who produce a wide range of tahini, halva, bakery products (stir/yeast/sugar-free/cookie-free cakes), raw tahini based spreads and drinking syrup, with 20% of the produce directed to export.

Yaakov works at the factory with sons Yoav (36, CEO), Mickey (49, CFO), and Yuval (47, VP Marketing). Another son, Ran (41), works in computers outside the company. The mother of the family, Tzipi, who until two years ago managed Achva's customer service, chose to devote herself to her grandchildren.

"With us, all these degrees are outwardly formal, at work it doesn't exist," says Yaakov. "We all work, and I, too, at my age, work with my workers on the production lines. Yoav was named CEO four years ago, he had the right skills for it. He entered an overlap period, and started making the decisions a few months ago. It was important for me to start passing on the factory to the next generation, even though I keep coming to work.

You have to move a factory at some point. They are hardworking, intelligent guys with a desire and hunger for success. I thought it was time to hand over the reins to Yoav. I'm still involved in everything that happens at the company, but I try not to decide, only to recommend.

The difference between me and the younger generation is critical. I started out as a simple laborer carrying sacks from his back. These guys came from academia, came with richer baggage than me. I may have more life experience than they do. They cleaned the factory from home, during vacations they worked there. They are advancing this business in very safe steps."

Yaakov says that one of the most significant decisions his son, Yoav, made as CEO was in June, "When most food manufacturers announced sharp price increases, we decided to reduce the price list by about 3% in the hope that the retailers would roll it over to consumers' pockets. When war broke out in Ethiopia, we began to realize that there was going to be a terrible crisis in sesame, so we bought huge quantities of sesame. We also bought at a relatively low dollar rate even before it went up, and that's what allowed us to lower the price."

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Jacob is an angel and three of his four sons. Will the grandchildren also work in the factory?/PR

Three values

"When I took over as CEO, I felt like weights on my shoulders, but on a day-to-day basis, it's less noticeable," Yoav says. "On a day-to-day basis, we don't deal with it. We work and everyone does his job. My brothers are just as significant as I am in society."

How does your youthful spirit manifest itself?
"Both my brothers and I received an education from my father that we believe in very much. We haven't done any reforms or upheavals in the business. We continue on his path. In recent times, we have become very strong in everything related to exports, to sale in American marketing chains, mainly of tahini. My brothers' and my brothers' decision to lower the price is also in the spirit of my father's commander. Dad instilled not to be greedy. Always gain, never lose. When you have to raise prices, you go up, but when you can lower them, you lower them."

For 2022, according to Stornext, Yoav notes, Achva holds a market share of 36% in milling, 56% in Halva and 26% in the cake market. "In both Halva and Tahina we are by far the market leader and both are the cheapest. We make good profits, and still cheap. This is an example for everyone on the issue of cost of living on how to do it right," he says.

"In general, we continued Dad's path, which has proven itself over the years. You don't have to invent the wheel, you just have to do things right," Mickey adds. "The entry of the brothers mainly increased their ability to deepen and specialize in various subjects. Dad instilled three basic rules in all of us: to make quality products, to sell cheaply, to think about the consumer and to evolve with what is available even if it takes longer. For example, we avoid loans. This is the education we received and this is our way."

A strong desire to succeed, diligence, very hard work, love for what you do and slow progress without shortcuts - these are the foundations that led, according to Yaakov, the factory to growth and success. But there were also a number of events that, for him, marked the fundamental breakthrough. "In 1988, during the first intifada, gangs of thugs went to Palestinian shops and told them not to buy goods from Israel with Hebrew captions and that it had to be in Arabic," he says.

"At that time, Judea, Samaria and Gaza were actually the garbage bin of the Israeli food industry. There was a good buyer there, with cash, who bought all the change, all the goods they couldn't get rid of. I have no problem marking in Arabic, today most of our products are also registered in Arabic. But because the demand came then as a kind of ultimatum, I decided not to go for this move. I decided, in a very naïve way, that the 25% we sell to these areas we would start exporting to the world.

It was the smartest decision I've had over the years. If the solution made it easy to sell all the surplus produce to the PA and Gaza and pulled the factory down because it didn't have to make an effort, then the desire to export and meet world standards, in appropriate packaging, at food exhibitions – greatly contributed to the advancement of the factory. That was our turning point.

Today we export to almost the whole world. All over the world, tahini is beginning to take pride of place as a health food. By the way, the Palestinian Authority is boycotting us today because we're based in Ariel, but that doesn't stop me from continuing to print in Arabic."

Not just grinding. Achva / Yael Han Products

The main thing is health

Another significant decision he made, says Yaakov, was in 2000, "when I recognized the health revolution that was going to happen, and then they started talking about reducing salt consumption. I decided to remove the salt from the tahini, which until then had been 0.5% in the product and added in order to increase flavors.

We started getting positive responses from the market, and as the health revolution progressed, people knew that Achva milling was without salt. This is what brought - besides the price - the biggest increase in the product. Since our tahini is 100% sesame. This is a step that has cost us many millions over the years because the price of salt is significantly lower than the price of sesame, but on the other hand, the market reacted very positively to this step. I also heard some say that 'now the grind is bland,' and then I would answer: 'Add salt, I won't add salt to you.' I was actually with a health product at the right time."

In preparation for Rosh Hashanah and the High Holidays, Achva continues its annual tradition and markets honey-flavored cakes in hundreds of thousands of units to retail chains, supermarkets, the institutional market, government agencies and Jewish communities overseas at a reduced price. The honey cakes are also joined by stuffed apple cake and sweet sesame spreads, including halva spread, tahini paste with silan with chocolate and tahini paste with sugar-free chocolate. After Sukkot, a new series of products is planned, "Tamar & Mor" - date bars in family and personal packages.

The world as a grinder

Over the years, the company, which began its journey in the production of standard grinding and halva in a block of 500 grams in manual packaging, has developed, as stated, to produce many additional products. "We came to the conclusion that marketing needs to be independent, which means we need to have a certain volume so that we can fill a pallet or truck for the customer," says Yaakov. "In 2000, tahini was not yet popular. At that time, mayonnaise was still selling more than grinding in stores. That's why we needed more products, to come with 'volume' to the store. We thought it would be appropriate to add cakes and the pastry area. It was a very right move."

As mentioned, to this day, Yaakov makes sure to work at least an hour a day with the workers on the production lines. The employees, by the way, he knows each by name. "With us, you will see the situation of a Palestinian department manager, where his coordinator can be a kashrut supervisor. Where you make money with welfare and dignity, there are no conflicts and everything works," he says. "We also brought a Palestinian into accounting offices and it works fantastically. The main thing is that we don't talk politics. We have Palestinians, religious, secular, an Ethiopian guy who is in charge of the milling plant, there are Samaritans in the factory."

And there are also family members who work together.
Yoav: "First of all, we were lucky that Dad was dominant. We all believe in his upbringing, so there aren't many people either, and we usually see things eye to eye. We all also understand that the degree of success depends on the degree of concessions. No matter the titans, in the end everyone has to give up because at the end of the day, there is joint management here, a common goal."
Yuval: "Each of the brothers manages a different area of the business. We respect each other's decisions. If there are disagreements, concessions are required. We all give our souls for the business to succeed."

Jacob: "In a family business, if you have a dominant father with a strong character, then things will work better. With us, as mentioned, each of the boys also went to his field of expertise, reached his natural place in the factory."

Do you expect your grandchildren to follow in your footsteps?
"Absolutely not. History has already proven that the third generation, which I personally love the most, are the joints. And also how exactly do you distribute this cake to the third generation? It's not simple. This is an obvious recipe for failure. It didn't work in history, it probably won't work for us either."

What are the plans for the next few years?
Yuval: "We believe that we can bring good news to the consumer regarding the cost of living and are looking for additional areas to develop. At the same time, we will not enter an area where we cannot bring about significant change. In addition, as market leaders in the milling world, we see the company's main growth engine abroad, which already accounts for a significant part of our sales."

Yoav: "We already market around the world, but the world is big and there is a lot to do. Israelis know how to appreciate good quality tahini, but in the world we have to deal with inferior tahini from Turkey or Arab countries that come at a significantly lower price. It's a long process that requires a lot of investment and a lot of patience."

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Source: walla

All business articles on 2023-09-17

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