Despite an increase in sales by 9.4 per cent, Isreal's Strauss Group reported a drop in gross profits in the first half of the year by 0.9 per cent due to a sharp rise in raw materials, among other factors. The second-largest food and beverage company in Israel generated sales in the first half of the year of around $497 million for their coffee sector. Although this represents an increase in sales of 9.4 per cent over the corresponding half a year ago, the company cited negative influences from weaknesses in some Eastern European Markets, changes in the exchange rates of various operating currencies, along with sharp rises in raw material prices coupled with the difficulty of raising prices in prevailing macroeconomic conditions in some countries. “Strauss Group is dealing with complex challenges in Israel and abroad due to the volatility of global markets as characterised by sharp increases in raw materials and manufacturing prices,” said chairperson of the Strauss Group Ofra Strauss on 17 August. “Strauss has taken significant steps to absorb part of these cost increases.” As of 16 August, the composite price of coffee as measured by the International Coffee Organisation stood at $2.11 per pound, compared to a monthly average of $1.57 a year ago. Strauss Group also reported the completed integration of acquisitions done in North American via Sabra and Strauss coffee, as well as the acquisition of coffee brands Fino Grao in Brazil and Ambassador in Russia.