My Promised Land: The Triumph and Tragedy of Israel (52 page)

The 1950s brought the Strauss family an unexpected windfall: German reparations. Like other Holocaust survivors, they—and the Israeli economy as a whole—benefited from the compensation agreement signed in 1952 by David Ben Gurion and West Germany’s chancellor, Konrad Adenauer. Hilda and Richard invested in their dairy the deutschmarks they received from the Bundesrepublik Deutschland for all that was lost in Ulm. They imported from Germany their first commercial production equipment, as well as professional know-how. While their young Nahariya-born daughter, Raya, stayed at home, they sent their precocious son, Michael, to Switzerland and Germany to complete his studies in dairy production. The German dimension of the Strauss enterprise was amplified in the 1960s, when Hilda and Richard managed to forge a strategic alliance with a German subsidiary of the European giant Danone. The partnership was made possible by the Strausses’ German background: if not for Hilda, Danone would not have forged such an alliance with a small dairy in a remote country. Danone transformed the family business and reconnected Hilda to the motherland that had rejected her a generation before. It also allowed the Strauss family to return from the fringes of Palestine to the center of Europe, and to remain up-to-date on European technology and business practices. In the summer of 1973, when the modern Danone-Strauss plant opened on the Strausses’ nine-dunam plot of land that the Strausses clung to in the harsh winter of 1937, the event was not merely an industrial triumph. After three dramatic decades, the three souls who had escaped Europe and built in Nahariya a shelter that would save them from Europe brought Europe to Nahariya.

Michael-Peter was only two and a half years old when his parents settled in Nahariya. As a child, he walked barefoot among the cows, and as a teenager he sold his mother’s cheese to the hotels and cafés. But young Michael was very much a wild child raising himself. His mother was devoted and loving, but she was caught up in business. His father
was bad-tempered and sometimes abusive. His sister was six years younger and her father’s favorite. Michael received his education on the soccer field, on the basketball court, and on the beach. He spent most days and nights outdoors. The distance between himself and his parents could not have been greater. They were well educated while he could not be bothered with going to school. They were law-abiding bourgeoisie while he was a rule-flouting rebel. They were conventional and conservative while he was an iconoclast. Under the roof of European propriety, a charismatic, intuitive, and life-loving Israeli beach boy grew up who would give the Strauss dairy its Israeli dimension.

From the ages of thirteen to twenty-two Michael lived away from home: in the naval academy, in the navy, in the merchant fleet. The rough life of a sailor suited him. But after he was tamed and groomed in Switzerland and in Ulm, he returned, at the age of twenty-three, to his parents’ dairy to work alongside his mother. Michael contributed chutzpah to their enterprise. He believed the sky was the limit: his mother’s little dairy could conquer the young State of Israel. When the business came close to collapsing in the late 1950s, he marched into the Jerusalem office of the trade and industry minister and extracted emergency funding. When one bank created difficulties in the 1960s, he went to Tel Aviv and persuaded another bank to lend Strauss even more money. Michael used his charisma to win over partners and overcome rivals, to cajole and placate employees, managers, and sales agents. With determination and shrewdness softened by charm, Michael managed to modernize production, expand distribution, and bring Strauss products to every grocery store in Israel. But Michael’s real forte was his feel for people: he could intuit people’s strengths, people’s weaknesses, people’s needs. In the 1970s and 1980s, Michael Strauss turned the Strauss dairy into a modern company that utilized its European capabilities to give Israel what Israel wanted.

Israel is a harsh, hot land; ice cream is cold and comforting. So Israelis consume much more ice cream than North Americans and Western Europeans. Hilda Strauss realized the potential of ice cream in 1950. Although production was fraught with difficulty, she insisted that her dairy begin manufacturing it. But Michael was the one who made his mother’s ice cream a national brand. He brought about the fall of the rival company Artik, bought the competitor Vitman, and forged a partnership
with the Anglo-Dutch giant Unilever. Today, Strauss Ice Cream is the biggest manufacturer in Israel, with roughly half of the market share.

Israel is a bitter land; dairy desserts are sweet and soothing. So Israelis love dairy desserts. Hilda and Michael Strauss recognized the potential soon after the 1967 war. They understood that the era of ascetic Zionism, of basic white cheese and thin, yogurtlike
leben
, was over. With better times came the demand for better and richer dairy products. So they challenged the Tnuva cooperative’s monopoly by offering the new Israeli customer high-quality yogurts and individual dairy desserts. In the new Danone-Strauss plant they manufactured a milk chocolate pudding called Danny, which conquered the market of the 1970s. In the 1980s and 1990s they introduced the German-inspired dark chocolate and whipped cream dessert Milky, which found its way into almost every Israeli refrigerator. Strauss became a prosperous giant, controlling the largest chunk by far of Israel’s dairy desserts market.

Israel is an exciting and excitable country, so Israelis need ever-increasing excitement. The Strauss team understood that this applied to the way everything must taste. They realized that Israeli salty snacks had to be much saltier than their American counterparts, and that Israeli sweets had to be much sweeter than European ones. Chocolate had to be much more chocolaty and vanilla much more vanilla-y. There were no nuances for Israel; everything had to be fierce and aggressive, to hit the palate with flavor. The Israeli Milky, for example, had twice as much whipped cream as its German inspiration. But Israelis don’t want just more, they want new. They get bored very quickly. So Strauss replaces its products much faster than its European sister companies do. To stay where it was, Strauss had to keep running. But Michael and his fellow workers loved running. They were indefatigable runners. So they took Hilda’s small, solid German operation and turned it into a hyper-energetic Israeli empire.

Dr. Richard Strauss died in Nahariya in 1975. Hilda Strauss died in Germany in the summer of 1985. They left behind a son, a daughter, seven grandchildren, and the most advanced dairy products company in the Middle East. In 1997, twelve years after Hilda’s death, the Strauss family purchased Elite, Israel’s leading chocolate and coffee manufacturer, making Strauss-Elite the largest food and beverage group in Israel.
In 2000, Strauss-Elite opened its new dairy in the Galilee. The fully automated Ahihud plant produces more than a billion cups of yogurt and dairy desserts every year. In the mid-2000s, Strauss-Elite took over several coffee companies in Eastern Europe and South America. In the late 2000s, it penetrated the American market and rebranded itself as the Strauss Group. In 2010, it opened, in Virginia, the biggest hummus manufacturing facility in the world, which now supplies over 50 percent of American demand. In 2011 the Strauss Group sales approached $2 billion, and the operating profit neared $180 million. Sales grow at close to 10 percent annually, mainly because of overseas expansion. For a while now, Strauss Group has been the fourth-largest coffee company in the world in terms of green coffee procurement—larger than Lavazza and Segafredo.

Michael Strauss greets me on the deck of his marine-blue yacht,
Lucky Me
, anchored in the Croatian fishing village of Havar. He is tall and fit. His gray hair is closely cropped, and his voice is thunderous. Even in his late seventies, he has the manner, the posture, the energy, and the mischievous look of a young sailor—hungry for life and always on the lookout for the next escapade. But during working hours, Strauss is disciplined. I find him going over emails sent from the company’s headquarters a few hours earlier: quarterly reports, annual projections, analyses of the Chinese market. After offering me a glass of champagne, he makes it clear he must get back to work. Although he is semi-retired, and on his summer holiday, one must do what one must do. Only after he reads the last of the company briefs does he join me on deck to try to understand why I have come such a long way to talk to him.

“What is Israeli about Strauss?” I ask. “What is it about Israel that enables Strauss to succeed?” Michael fires back instantly: “The people. Israel has extraordinary people. Israeli human capital is absolutely unique. The challenges facing any Israeli business are enormous—a dysfunctional government, an inefficient bureaucracy, wars. Israel’s permanent uncertainty is a real drawback. But what compensates for all these obstacles are the Israelis themselves. I’ve been around the world. There are no such people anywhere else. Israelis are exceptionally quick, creative, and audacious. They are sexy even in the way they work. They
are hardworking and tireless. They are endowed with a competitive spirit—with the need to be the first at the finish line. And they are willing to do whatever it takes to be the first at the finish line. They never take no for an answer. They never accept failure or acknowledge defeat.”

At noon Michael and I descend the aft stairs to the dinghy that brings us across the bay to a secluded island. It’s still early in the season and almost empty: only two Russian oligarchs are enjoying the sun, accompanied by three gorgeous platinum-haired girls. Michael flirts with the pierced and tattooed barwoman who serves us a midday Chardonnay. Under the thatched roof of the inviting bar, she doesn’t reject Strauss but plays his game. It’s all transparent in this Adriatic resort: wealth is wealth and youth is youth and they interact.

I ask Michael if the Strauss story is the Israeli story. Michael says that though his mother was not big on words, he often sensed her deep pain: the departure from Germany, the expulsion from Europe, finding herself in a remote land whose tongue she never fully mastered. While his father took his pain to other women, his mother took her pain to the dairy. And with a strength that rose from her suffering, she made a family and founded a business. Hilda was a devoted Zionist. The trauma of the betrayal of the old homeland made her cherish her new homeland. She believed that the dairy was her way of participating in the founding of the Jewish state. As far as she was concerned, Strauss and Israel were intertwined. As Israel grew, Strauss grew. As Israel made its way through history, Strauss made its way to market. So even though Hilda was never political, and even though she never spoke Hebrew properly and never really knew the country, she
was
Israel. She embodied the need for Israel to be, the determination that Israel will be, the miraculous story that Israel is.

After we head back to the yacht and Michael goes down to his cabin for a post-Chardonnay nap, I am left alone with my thoughts. Ulm was also Albert Einstein’s hometown, and Einstein was the Jewish Diaspora at its best: a combination of scientific genius and universal humanism. But Einstein’s and Strauss’s German-Jewish Diaspora was doomed. Einstein left for Princeton, Hilda for Nahariya. Hilda did not indulge in self-pity, but instead fought back. She realized that the task of her generation was survival. She knew her generation had to invent a new world in which their children would be able to reinvent themselves. She was
never at home in this new world. Hers was a life on the cusp. But eventually her children and her grandchildren had a homeland and a home. They turned Hilda’s kitchen dairy into a multinational giant employing more than fourteen thousand workers in more than fifteen countries, manufacturing hundreds of products. So now, as its owner emerges from his cabin with a sailor’s smile, the glistening yacht of the son of Europe’s survivors glides into the port of Dubrovnik. After some maneuvering, it finds its place among the yachts of Russian moguls, French millionaires, and British aristocrats—Europe’s high and mighty.

The Richter story is a hopeful story, too. Kobi Richter was born on Christmas Eve in 1945. His father, Kalman, was a disciple of the Revisionist Zionist leader Vladimir Jabotinsky. Born in Lvov, Poland, he immigrated to Palestine in 1935, converted to Labor, worked in a potash plant in Sdom, and joined Kibbutz Ramat Yohanan in the north. His mother, Mira, was the daughter of an ultra-Orthodox family from Lvov that failed to immigrate to Palestine in time and perished in the Holocaust. Kalman was the chief welder as well as the treasurer and economic leader of Ramat Yohanan. Mira worked in the cowshed and managed the common clothing warehouse. Kalman and Mira were both strict and tough, devoted soldiers of the Zionist revolution.

Richter’s first memory is of war. While the family sat in the kibbutz bomb shelter in early 1948, he put his two-year-old fingers into empty peanut shells that he imagined to be helmets. But his childhood was peaceful. By the 1950s, Ramat Yohanan was flourishing. The Holocaust was not to be mentioned, and war was a heroic memory—there was no real danger in sight. In his eyes, the kibbutz was the elite unit of Israeli society, which was the elite unit of the Jewish people, which was the elite unit of humanity. Anyone lucky enough to be the son of a kibbutz was at the apex of the apex of the apex.

Kobi Richter was gifted. At the age of four he learned to read, at the age of seven he devoured four books a week, and by the time he was ten he knew his Dickens and Hesse. At eight he learned to swim, at twelve he was the kibbutz swimming champion, at sixteen he was Israel’s number 2 in mixed freestyle. At seven he learned about different screws in the welding workshop, at ten he could weld, at fifteen he built a motorcycle.
In his teenage years Ramat Yohanan was paradise: there was a pool and a metals workshop and wheat fields; there were tractors, horses, and girls; duck hunting and lock picking and mushroom foraging and joyrides in cars borrowed for the night. Everything was possible.

Kobi Richter was a perceptive boy. As his bar mitzvah approached, he recognized that there was an inherent contradiction between the two values the kibbutz upheld: equality and freedom. But though he recognized the jealousy, hypocrisy, and pettiness in the commune’s life, he was devoted to the kibbutz. He sang and danced in the grand socialist, national, and Jewish holidays and celebrations. When the women danced in circles and the men reenacted harvest time with plowshares in hand and the children were lifted up high, Kobi would have tears in his eyes. He identified totally with the mesmerizing secular religion of Israeli pioneerism. He felt privileged to be one of the select few who would lead his people from slavery to liberation, from weakness to might, from Shoah to resurrection.