Grapes of worth

Lebanese wine industry rapidly gaining recognition

"Wine is a way of living; it is your vines, your terroir… You are, first of all a farmer,” says Ramzi Ghosn, co-owner and winemaker at Massaya, one of Lebanon’s leading boutique wineries. Indeed, for most Lebanese wine producers, their work is first and foremost a passion that has also spread the Lebanese wine gospel both at home and abroad.
The industry has also witnessed new steps toward regulation. This year saw the official creation of the National Wine Institute, a public-private body that will eventually control all areas of the sector. There is still much work to be done but the Lebanese wine producers Executive spoke to are confident they are on the right track.

Lebanon has a rich wine history, dating back to 7,000 BC according to modern scholars. The Phoenicians began exporting wine across the Mediterranean where it developed a reputation for quality, which continued until Lebanon became part of the Ottoman Empire and wine production was forbidden except for religious purposes.

The Jesuits, at what is now Château Ksara, produced the first modern Lebanese wines in the mid 19th century, but with the end of World War I and the arrival of the French a previously unprecedented demand for wine arose. This led to a genuine wine culture that was sustained until the onset of the civil war in 1975, when production was brought to a virtual standstill.
At the end of the war, there were only four functioning wineries: Châteaux Musar, Ksara, Kefraya and Vin Nakad. They joined the International Organization of Wine and Vine (OIV) and officially resurrected the Union Vinicole du Liban (UVL), today Lebanon’s most effective wine lobby.

The sector really began to move in the mid-1990s when a slew of new producers, such as Massaya, Heritage, Clos (now Château) St Thomas, Domaine Wardy and a newly invigorated Domaine des Tourelles appeared on the scene. They were followed soon after by Châteaux Khoury and Ka, Ixsir, and Karam to name but a few. 

Today, there are around 43 wineries in Lebanon, producing a total of 8 million bottles a year, according to figures from the UVL. Hady Kahale, general manager at Ixsir, says the wine production sector supports 3,000 to 4,000 families. Lebanese wine is exported mainly to the United Kingdom, France, Dubai, Germany, Sweden and the United States and has penetrated markets as far off as China and Japan.  

A mechanism for progress

“Things are going well for the wine sector but with progress, you need to have a mechanism in place to regulate this sector and market the country,” says Michael Karam, author of  “Wines of Lebanon”.

This year finally saw the public sector — through the ministries of agriculture, industry and economy — wake up to the idea of winemaking as a productive sector of the Lebanese economy. “Wine production has become such a dynamic sector that the public sector had to acknowledge what is going on and answer a need,” says Kahale.

In June 2013, an official Lebanese delegation led by the director general of the Ministry of Agriculture Louis Lahoud, attended the OIV conference for the first time — an event they plan to attend next year as well. The ministry, with the guidance of the UVL, also held a “Day of Lebanese Wines” in Hotel George V in Paris and will be hosting a similar event in Berlin next year. The OIV chairman was officially invited to Lebanon this year.

But perhaps the most significant ministerial activity was the approval of the creation of the National Wine Institute (NWI), a public-private initiative that will eventually play the role of tailoring rules and regulations regarding Lebanese wine production, as well as allowing for fundraising and NGO support, explains Faouzi Issa, co-owner and winemaker at Domaine des Tourelles.

In explaining how the institute came to be, Serge Hochar, president and general director of Château Musar and current head of the NWI, recalls that in the late 1990s the three major wineries of the time, Châteaux Ksara, Kefraya and Musar, asked for the passing of a law to create a national wine institute to help them in their exports (by giving credibility to Lebanese wine).  

“In 2000 we got the law which asked for the creation of a regulating wine institute. The law was officially recognized this January 2013 and the institute was approved this May,” says Hochar. Though the NWI is not yet functioning, its creation is a positive step in the development of the sector.

Current head  of the UVL — and also CEO and chairman of Château Ksara — Zafer Chaoui says, “The approach of the Ministry of Agriculture is far more positive now and they are very interested in our sector, but this government has a restricted budget and we sincerely hope this commitment will remain unchanged when there is a government with full power. We then hope to receive this support with a budget as we need to help the smaller producers attend exhibitions worldwide, which is what other countries do.”

Though the winemakers interviewed have learned to rely on themselves and each other for financial support, they see government support as adding weight to their industry and believe it will have a positive impact, especially on the international market, if sustained.  

Brewing domestic interest

Fueled by the growing number of local wineries and wine retailers in the country, along with a rising global trend, wine appreciation among Lebanese has increased, and greater focus has been put on comparisons, production and tasting explains Paul Choueiry, manager of the restaurant and wine bar Les Caves de Taillevent in Beirut.

“Healthy competition among wine producers has improved production as a whole and that, coupled with individual marketing efforts and local wine festivals, has indeed piqued the interest of Lebanese consumers,” says UVL’s Chaoui.

Château Ksara has been the dominant force in creating greater consumer awareness. With a production of nearly 3 million bottles (modest by global standards but representing 35 percent of Lebanon’s production) and with a range of 14 wines, it has made a significant impact both at home and abroad.

“Since the 1990s the Chateau Ksara management has invested heavily every year to guarantee our quality is never compromised,” says George Sara, the winery’s chief commercial officer. “We use state-of-the-art equipment, regularly plant new vines and ensure that our vineyard management is second to none. We may be the oldest and most successful Lebanese producer but due to the competition we must always be at the top of our game.”

Lebanese consume almost two bottles per capita annually, according to statistics from the UVL — a number which Massaya’s Ghosn believes is very low and a result of several factors including the Lebanese preference for hard liquor with their meals, the competition arak provides and the previously limited number of wineries.

Still, Ghosn and the wine producers interviewed feel this number is increasing steadily and while Châteaux Ksara and Kefraya dominate the local market, according to Nayef Kassatly of Château Ka, greater exposure to different varieties of wine will create a more level playing field as consumers develop a more attuned taste.

“Locally, consumers go for the big names and it will take time for the more recent wineries to catch up. We wine producers should educate the consumer so communications, press releases and wine tours are very important,” says Kassatly. “The emphasis is on quality and everyone is doing better: the grapes are better, wine is better. So yes we can have more regulations but the best referee is the consumer and the consumer today recognizes good taste,” adds Kahale.

“Some have this idea that Lebanese wine is substandard but that’s not true,” says Karam “we can compete pound for pound with the best in the world in terms of quality — especially at the entry level.” 

Still, Lebanon has to go up against imported wines which are perceived by many consumers as better. Chaoui explains that, after an agreement with the European Union, customs on European wine were reduced, which increased the quantity of imported wine to 1,200,000 bottles a year, 12 percent of Lebanon’s local consumption.

Indeed one of the recurrent complaints voiced by wine producers interviewed was how some restaurants in Lebanon exclude Lebanese wine from their menu. “While you cannot prevent the consumer from choosing foreign wines in the supermarket, we have a problem with the on-trade, namely restaurants, in that some only have foreign wine in their menus. This perception should change and the government should impose on restaurants to have at least four local wines of their choice on their menu. We should be proud of our country’s products,” says Issa.

Other local market challenges cited were those common to all sectors of the economy this year, including the dwindling number of tourists, the deteriorating infrastructure, the decreased local purchasing power and the increased price of land.

Drip for drip

The relatively limited Lebanese market can only take one so far, and Lebanese winemakers have long carried the name of their country abroad through their wine. Château Musar began during the civil war. “I was not looking for Lebanese consumers; I was looking for knowledgeable wine consumers and I positioned my wine as a fine wine. Other wineries benefited from this. Today, Lebanese wine is positioned as a good high level wine which is important,” says Hochar.

The reputation of Lebanese wine abroad is in large part due to the efforts of the UVL and although Lebanon’s production remains low when compared to other wine producing countries, UVL members hope their capacity vis-a-vis European producers will increase and are enthusiastically planning for further events, now that there is government support. “We are a small drop in the sea of wine production but we have huge possibilities worldwide and every one of us is trying to find our niches. No doubt the world is huge, our wine is good and it is not difficult to sell the part of this quantity which goes into export all over the world,” says Chaoui.

Issa explains that internationally, the UVL works together on generic campaigns to promote “Wines of Lebanon”, citing a campaign in the United Kingdom as an example, where their combined efforts with the UK-based Coco PR to execute a generic campaign included events, roadshows, participation in the London Wine Fair and media trips to Lebanon’s wineries. All this has created a positive vibe for Lebanese wine, which has translated into better distributors and increased sales, with the UK being the number one market in terms of value for Lebanese wine today.

“We are working for Lebanon, and in the end it will benefit all of us. After this equal visibility and campaign… it becomes up to each winery to distinguish itself through its quality and history,” says Issa. 

In the international market, regulations and a good image become important because wineries get only one or two chances to attract a consumer to Lebanese wine and if that consumer should happen to try a lesser quality Lebanese wine, it is unlikely he will become a fan, explains Kahale.

France is among the three main markets for Lebanese wine, due to the prevalence of Lebanese restaurants there, according to Chaoui. Some wineries, such as Ixsir, focused first on the international market in France before creating a separate marketing strategy to penetrate the Lebanese restaurants; still others put their efforts into different markets.  “[Being considered] ethnic [foreign] is not an insult because people like to discover such categories but you cannot only be ethnic, you have to be in the real world as well,” says Kahale.
Chaoui summarizes other difficulties facing Lebanese wine on the international scene: “The global economic crisis of 2008 affected us all because the average citizen’s purchasing power has gone lower and people won’t consider drinking wine their top priority in times of crisis.

Also, there is an overproduction due to the crisis and prices are getting lower so competition is getting fiercer as compared to a period of economic boom,” adding that Lebanon lost a major export market in Syria this year due to the continuation of the crisis there.

Pressing on

A final challenge the Lebanese wine industry faces is the neccesity to compete on quality and not price internationally, because of its smaller production numbers.

Karam recommends that Lebanese wineries promote certain grapes — such as the indigenous white Obeideh and the red Cinsault which, although French in origin, has been around for over 150 years — to come up with wines with a Lebanese identity that would be a welcome change for the international consumer. “We could have a Lebanese signature wine,” says Karam.

The year 2014 promises to be an active one for Lebanese wineries with Ixsir launching a restaurant on their winery’s premises, Massaya creating a new winery in Fakra and the opening of Lebanon’s first wine museum by the Saade family, owners of Château Marsyas and Domaine Bargylus in Syria.

Most wineries will likely continue to sustain growth, however Ghosn expects that some of the older wineries may consolidate or scale down and he does not believe the sector will witness the same growth it did for the past five years.

Whatever the future holds for Lebanese wines, the path they have carved is smooth and wide and it seems wine will continue to be known as one of Lebanon’s more interesting exports.

Nabila Rahhal

Nabila is Executive's hospitality, tourism and retail editor. She also covers other topics she's interested in such as education and mental health. Prior to joining Executive, she worked as a teacher for eight years in Beirut. Nabila holds a Masters in Educational Psychology from the American University of Beirut.

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