When Joey Bergstein took over as CEO of Sabra in July 2021, the mandate from his bosses was clear. Despite having the enviable position as the U.S. leader in the $2.7 billion hummus market, the 36-year-old brand needed to accelerate its growth and put a rocky recent past behind it.
Sabra, co-owned as a joint venture between Strauss Group and PepsiCo, has struggled with salmonella and listeria contamination that led to recalls going back to 2015. In December 2021, the brand received a warning letter from the FDA highlighting several violations at its Virginia plant that makes hummus.
To address the federal agency’s concerns, Sabra shut down the facility for deep cleaning, equipment upgrades and employee training starting last December. The brand shuttered the plant again for the month of April to fix a faulty pipe.
“I made a really difficult choice, and it was a choice that I felt like it was the right thing to do,” Bergstein said of the Virginia closures in an interview. “It was an incredibly important thing for us to do for the longer term and for the medium term of the business.”
The first plant closure led to a “substantial” drop in revenue in the first quarter because most of Sabra’s hummus products were not produced for several weeks, Bergstein said. Sales dropped nearly a third, according to Strauss Group. The Israel-based company said the absence of Sabra on store shelves resulted in a sharp decline in the product’s market share in the U.S. — 46% compared to 62% a year earlier.
Bergstein said the brand has been “consistently climbing back,” and it has regained its No. 1 position in the hummus category, according to IRI data cited by Sabra. When it was missing from shelves, he said more than half of consumers decided not to buy hummus instead of switching to another brand. Those who did switch are coming back to Sabra, the IRI data showed, and the brand is taking back market share.
“When you stop production, you open the door for a competitor,” Bergstein said. “We’ve been able to grow back in a relatively short period following that disruption, which I think speaks to the health of the brand.”
Sabra also put the problems with the FDA behind it. The federal agency, which conducted a thorough inspection of the Virginia plant in May, determined that it was satisfied with the progress that the company had made resolving its problems, according to Sabra.
Along with the plant closure, Sabra strengthened its executive ranks with the hiring of a new head of research and development and sustainability, an individual to oversee food safety and quality, and a new supply chain leader. All three employees have backgrounds in food.
Hank Cardello, a food industry expert at Georgetown University’s McDonough School of Business, said Sabra’s position as a healthier plant-based option, market-leader status and potential to bring the product into new flavors and formats makes it an attractive brand in the food space. He added PepsiCo’s 50% ownership and reputation as a shrewd operator in the food and beverage space provided an impetus in helping correct Sabra’s recent challenges.
“It would be kind of foolish not to be a major player in the plant-based arena, and hummus is right there,” Cardello said. “This one has so much long-term potential. It's a core brand. If I were in that business, I would do whatever I could to make that thing work.”
Moving beyond hummus
Part of Sabra’s future growth plans hinges on taking the brand beyond its roots as an offering at a party or holiday gathering and turning it into something more people eat in their daily routine as a snack or during meals. Sabra is recognized by 80% of consumers, but roughly 85% of them only buy the product a few times a year, according to the company.
To turn occasional users into more frequent consumers, Sabra has introduced different offerings such as Snackers and Singles for on-the-go consumption; Breakfast Avocado Toast and Everything Bagel Seasoned Hummus.
Recently, the brand also debuted a March Madness-like bracket for the NFL featuring eight new Sabra hummus combinations inspired by local cuisine from team regions. Fans can make the creations themselves before voting on Twitter, ultimately crowning a winning team mixture.
While Sabra has room to expand its hummus and guacamole offerings, Bergstein said the brand also is looking for other opportunities beyond those two categories. He said Sabra’s association with Mediterranean food “opens the door to several other places that we can take” the brand, while declining to elaborate with details.
“We’ve got this great brand with lots of reach and lots of opportunity,” Bergstein said. “For sure, the world isn’t limited to those two product varieties alone.”
Bergstein said he is confident that Sabra has overcome its recent challenges and that the brand can now focus on execution and growth.
Employees, he said, have done a lot of work to put the right procedures in place to ensure the company can consistently make a safe, high-quality product. Sabra also is positioned to benefit from consumer demand for products that are plant based, healthy and better for the environment.
“We made the investments in the business that we needed to,” Bergstein said. “To take the challenges in front of us seriously, invest to fix it, so that we can set the stage for future growth, and that’s exactly what we did.”
