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Competition Heats Up in Tofu Frozen Dessert Market

May 10, 1986

RAHWAY, N.J. (AP) _ Accomplishing what mystified many through the centuries, David Mintz circumvented the thorny restrictions of Jewish dietary laws by creating a new gastronomic experience, and in seven flavors, too.

But the founder of Tofutti Brands Inc. now faces a new challenge - remaining a leader in the non-dairy frozen dessert market.

Mintz, 54, is a former kosher caterer who watched sales of Tofutti, his non-dairy frozen tofu creation, zoom from $2 million one year to $17 million the next. A few months ago, his company even began shipping Tofutti to Japan, a move akin to the United States importing apple pie from that Asian nation.

But Tofutti’s lead in the market may be melting.

The 4-year-old company, which makes its frozen dessert from mashed soybeans, reported a $119,787 net loss for the first six months of its fiscal year, through Feb. 1. For the comparable period a year earlier, the company reported a $1 million profit.

Sales for the first two quarters slipped to $6.3 million from $7.9 million a year earlier.

That compares to $17 million in sales for the full fiscal year that ended last July, which was up from $2.3 million the previous year.

Tofutti Brands, which went public in 1983, attributes part of the drop in sales to increasing competition in a business that was non-existent a few years ago.

When Mintz began selling his product in 1981, after nine years of testing and a few years of trying out the recipes on customers at his kosher restaurant in Manhattan, Tofutti was the only product around.

Now, various forms of frozen tofu are made by Colombo Inc., Tuscan Dairy Farms and a host of other companies.

Tofutti’s declining sales and income figures could be the ″early signs of a shakeout″ in the fledgling and small industry, said George Novello, an analyst at the investment firm E.F. Hutton & Co. Inc. in New York.

The likely survivors will be the companies with strong market shares and advertising programs, he said.

Tofutti is convinced it is going to be a survivor. It prides itself on its distribution system, which is partly carried out through Haagen-Dazs Co., the premium ice cream maker.

And Tofutti believes it will be protected from a shakeout partly because of its name.

″People refer to Tofutti as a generic term,″ said company spokeswoman Ruth Sarfaty.

Robert Wunderle, an economist and vice president with Supermarkets General Corp., the parent of the Pathmark supermarket chain, which sells Tofutti, agrees.

″In the public’s mind, tofu is synonymous with Tofutti,″ said Wunderle. He added that Tofutti Brands probably has the best chance of survival among its competitors.

And Mintz is accustomed to challenges.

A kosher caterer in New York for 25 years, Mintz developed a curiosity in the 1970s for an alternative to ″insipid-tasting desserts,″ Ms. Sarfaty said.

He especially was interested in a non-dairy product so it would not violate kosher dietary laws against serving dairy and meat products at the same meal.

After reading an article about tofu, he bought a package of the bean curd in New York’s Chinatown and began experimenting in his kitchen blender in Brooklyn, N.Y., and then on his customers at Mintz’s Buffet.

He later discovered that the frozen tofu had other advantages: It contained no cholesterol or lactose, a milk sugar that some people cannot digest.

In 1981, Mintz began selling to other shops a soft version of what by then was called Tofutti.

The dessert now is offered in the soft-serve form, which comes out of machines in swirls, and in a hard form packed in containers.

Eventually, Mintz sold his store and devoted his time to Tofutti.

In 1985, Mintz moved his operation to Rahway, where flavoring and ″mouth feel″ are perfected and where every test recipe is recorded ″in case it’s the one,″ said Harold Hawley, Tofutti Brands executive vice president of research and development.

No matter what happens in the industry, though, Mintz will have accomplished what he set out to do: create an ice cream-like dessert that can be served at kosher meals.

End Adv Weekend Editions May 10-11

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