Israel-based Strauss Group (TASE: STRS) more than doubled its net profit in the second quarter of 2026, posting NIS 195 million attributable to shareholders — a 113.3% increase year-over-year — while operating income rose 41.9% to NIS 363 million on an EBIT margin of 12.6%. The results signal a significant profitability inflection for one of the region's largest diversified food and beverage companies, whose portfolio spans coffee, snacks, confectionery, and water products across Israel, Brazil, Central and Eastern Europe, and Asia.

Margin Recovery Across Divisions

Both of Strauss Group's primary operating segments delivered strong EBIT growth despite revenue headwinds from a stronger shekel. Strauss Israel grew Q2 EBIT 46% to NIS 198 million — a 15.2% EBIT margin — boosted partly by NIS 27 million in one-time insurance income; even stripping that out, the segment posted an 13.2% margin. The Snacks & Confectionery sub-segment swung from near break-even in Q2-2025 to an NIS 52 million EBIT this quarter, a particularly notable recovery that reflects easing input cost pressure and improved pricing discipline. Coffee Israel lifted its EBIT margin to 15.4%, up from 10.1% a year earlier, even as reported revenues fell 11.1% due to the divestiture of the Coffee-To-Go retail chain — on a comparable basis, the revenue decline was just 3.1%.

Coffee International — which includes the 50%-owned Brazilian joint venture 3corações and operations across Poland, Romania, Russia, and Ukraine — grew Q2 EBIT 44.3% to NIS 148 million, reaching an 11.1% margin versus 6.7% in Q2-2025. Lower green coffee commodity prices compressed 3corações revenues in local currency terms, but that same dynamic supported margin expansion at the production level. The Central and Eastern Europe cluster delivered 6.4% LFL revenue growth in Q2, underscoring demand resilience in those markets for food and beverage operators navigating inflationary consumer environments.

Cash Flow and Capital Discipline

Free cash flow swung sharply positive, reaching NIS 150 million in Q2-2026 compared with negative NIS 89 million in Q2-2025. For the first half, free cash flow turned positive at NIS 104 million versus negative NIS 584 million in H1-2025. Net capital expenditure fell to NIS 115 million in Q2, down 17.9% year-over-year, contributing to a net debt-to-EBITDA ratio that improved to 1.5x from 2.4x a year ago — a leverage profile that affords the group capacity for continued brand investment and potential portfolio moves. Midroog, the Israeli credit rating agency, maintained its Aa1.il rating with a stable outlook. The board declared a semi-annual dividend of NIS 180 million, or approximately NIS 1.54 per share, payable September 3, 2026.

Shai Babad, President and CEO of Strauss Group, described the results as the product of sustained strategic focus rather than a single quarter's tailwind. "Even in a complex business environment we have been able to significantly improve profitability, while continuing to invest in our brands, innovation, and capabilities that will drive our growth in the years to come," he said. For operators and beverage industry analysts tracking global coffee supply chains, Strauss Group's performance offers a useful lens on how integrated producers are navigating commodity price volatility — using lower green coffee costs to rebuild margins while sustaining volume through brand investment rather than passing all savings to the trade.

Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.