Entrepreneurship in Lebanon is typically associated with technology – generally app development or a high tech startup – but is rarely associated with farming and agriculture. Yet, within the agriculture sector, there is a rising number of business people who deserve to be labelled as entrepreneurs. They are introducing new and unusual food products to the Lebanese food market, bringing innovation to the sector and broadening the range of foods typically produced domestically. From unique food products made from fresh local fruit or vegetables, to introducing new vegetable varieties to the country, to raising different types of livestock for the production of new delicacies, each of these entrepreneurs has contributed to some extent to the betterment of the livelihood of farmers within their community and have demonstrated ideas that could go national with some extra backing.
La Ferme St Jacques: Lebanese produced luxury French cuisine
Foie gras, the creamy food product made from the liver of specially fattened ducks, is mired in controversy, with many shunning it because of its links to animal cruelty (it generally involves force feeding a duck or goose to fatten its liver) and yet others still love its taste and associate it with images of Parisian bistros or the French countryside. Globally, 20,000 tons of foie gras are produced per year with France producing 70 percent and consuming 85 percent of that total.
It is for these reasons that it is surprising to learn that La Ferme St Jacques (LFSJ) has been producing this typically French delicacy, along with a line of 42 other duck products, right here in Batroun, Lebanon, since the year 2000.
As LFSJ’s Marketing and Communications Manager Maria Chedid recounts, the Younes family, the company’s founders, thought of the project because they wanted to contribute to the development of the district of Batroun – by potentially creating job opportunities that would keep people in the area instead of them migrating to Beirut, which was the case prior to their venture. Today 80 percent of LFSJ’s 35 employees are from the Batroun are. They consist of workers on the facility itself and some working on marketing, sales and distribution.
The Youneses established La Ferme St Jacques, investing $500,000, secured through personal funds and a loan from Kafalat, into the machinery, hangars and ducks. Chedid says the Youneses built the duck farm and facilities from scratch on land they rented close to the Monastery of St. Jacques, hence their name. As the facility developed, investors joined the Younes family and today there are five shareholders: Ziad Younes, Jihane Feghali, Philippe Grondier, Joe Nasnas and Dory Younes.
Originally, all the ducklings were imported from France with the production of the duck delicacies taking place in Lebanon. Following the July War in 2006, which prevented the company from importing ducklings that summer, they now only import fully mature ducks from France twice a year for mating – as the duck variety common to Lebanon is not suitable for food production, according to Chedid – and the ducklings are then bred and processed in Lebanon. La Ferme St Jacques produces 22,000 ducklings per year with an annual turnover of $1,500,000.
LFSJ covers all parts of the operation, from the breeding of the ducks to the processing, packaging and distribution. Producing 240 kilograms of duck liver a week, the farm started with only this delicacy but has since diversified its line to include 42 products ranging from raw duck fillet to processed duck breast stuffed with duck liver and tins of duck pate.
LFSJ’s competitive edge over the imported, industrially produced French duck products is in the lower price and the artisanal manner in which they work. The ducks at LFSJ are bred according to free range principles and the food products are produced by hand; this, according to Chedid, leads to a better taste than industrially made foie gras. La Ferme St Jacques’s products also have a 30 percent lower selling price than the imported variety.
[pullquote]The Youneses established La Ferme St Jacques, investing $500,000, securedthrough personal funds and a loan from Kafalat[/pullquote]
Aside from their specialized retail store on Rue Du Liban, Achrafieh, La Ferme St Jacques is distributed locally in the hospitality and retail sector. Chedid says the hospitality sector is a stronger market for them locally: “The hospitality sector is stronger because duck is not a part of Lebanese food culture and traditions, and therefore is not bought much from the supermarket, although over the past two years there’s been increased interest in duck products.”
She attributes this increase to the marketing they have been doing as a company, namely through digital and traditional advertising, participation in local food exhibitions, workshops and trainings for chefs on how to use their products.
Regionally, LFSJ has been distributing to Dubai, Qatar, Bahrain, Saudi Arabia, Kuwait and Jordan since 2004 and can be found in most of the Carrefour stores in the Middle East. They are also present in the hospitality sector regionally, with the percentage of hospitality to retail sales depending on the distributor in each country.
Chedid lists being alone in this industry in the region as one of their main challenges. “We are pioneers in this in the Middle East and it is a challenge because we are introducing people to this new variety of duck products.”
Lebanese Treasures Land: From snail slime to gold
A snail doesn’t seem that powerful as it glides along. But Naufal Daou, general manager of Lebanese Treasures Land (LTL), sees in it the potential to revitalize the Lebanese economy in a similar fashion to what the silkworm did for Mount Lebanon back in the days of the 17th century ruler Emir Fakhreddine.
A year prior to the postponed 2013 parliamentary elections Daou, who was planning to run as a Member of Parliament and who has a background in media, studied several investment projects that would have a social and economic development angle – which he could include on his electoral program – and could generate jobs in rural areas, keeping people on their land and in their homes, thereby lessening the effects of centralization.
In order for the selected project, out of the several proposed ones, to provide real added value, Daou first wanted it to be innovative – so as to not compete in a market already saturated with products like olive oil or apples and not create wasted surplus. Secondly, he wanted to have a readily available market beyond the confinements of a relatively small country like Lebanon.
The choice fell on snail farming thanks both to its compliance with Daou’s criteria and to the added advantage of being easy to produce and even easier to store for up to a year; an advantage when and if export routes close down. Heliculture, or scientific snail farming, is on the rise, according to Daou, with 500,000 tons of snails sold globally last year at an average of 4.5 euros per kilogram, with the number of snails sold expected to multiply by five within the next ten years. Aside from being consumed as a food product in Ghana, Cambodia and many parts of Europe, especially France (escargot anyone?), the slime that snails produce is used in cosmetics and skin treatments globally.
Despite the elections ultimately being canceled, Daou decided to go through with the project as a private sector venture and contacted the International Snail Farming Institute (ISFI) and Euro Helix, both Italian companies specialized in snail farming. In 2014, with an initial investment of $500,000 – spent on trips to Italy for training and introduction purposes, setting up offices here and on establishing the training center for office staff and future farmers – which he says he secured through personal funds, Daou established Lebanese Treasures Land, which would be the Lebanese and Middle Eastern agent of snail farming for both the Italian companies.
[pullquote]Heliculture is on the rise, with 500,000 tons of snails sold globally last year…with the number of snails sold expected to multiply by five withinthe next ten years[/pullquote]
Based on the terms of the agreement, the ISFI and Euro Helix would provide LTL with the techniques and basic equipment and would guarantee the purchase of the entire production from the Lebanese farmers, so long as they meet internationally set criteria.
For the Italians, explains Daou, sourcing even a small percentage of their snail production to Lebanon, when it comes to wholesale purposes, is economically efficient as labor is cheaper here than in many parts of Europe. The Lebanese climate is also ideal for the particular snail variety which is the most widely sold wholesale – about 85 percent of the volume of traded snails – the aspersa müller.
The LTL’s central office has thirteen people working on the team, divided between agricultural engineers, marketing, logistics and management. Being an agent or representative, LTL does not have a snail farm under its name, but currently works with 18 farms which are located mainly in the Bekaa, where agricultural land is plentiful, with a recent addition of farmers in Zgharta and Enfeh, north Lebanon. Daou estimates that the 18 farms they currently work with employ around 50 farmers all in all, but says they are adding more farms now that people are hearing about them – mainly via word of mouth, but also through the workshops they host in educational institutions, agricultural NGOs and local municipalities.
In exchange for a comprehensive list of services, LTL takes an annual fee of 10 percent of the final production. “What we do is we give the farmers the know-how and training. We also supervise and monitor the farms through visits every 15 days. We organize shipments and often compile snails from different farms into one shipment to cut down costs for the farmers. We also help them secure loans from loan guarantor Kafalat and the banks by preparing their feasibility studies,” explains Daou, who says Kafalat has given loans to 12 of the farms under LTL so far.
A total of 200,000 sqm of land is currently dedicated to snail farming in Lebanon and Daou says that each 1,000 sqm translates into a ton of snails per year, which are sold wholesale at $4.5 to $5.6 per kilogram. Daou believes snail farming has huge potential in Lebanon and says that an added advantage is that a 10,000 sqm snail farm needs only one person to maintain it, so the project has the potential to be a family run business. He outlines the process of snail farming as planting the appropriate vegetation for the snails to feed on, setting a reproducer snail free to roam on the land to reproduce, monitoring them and then harvesting them when mature and finally storing them in a well-ventilated place.
Daou places the initial investment for a 10,000 sqm farm at $70,000 for the vegetation, fertilizer, reproducer snail, the nets, snail pen and other material needed, and says that it generates a profit of $25,000 per year for the farmer.
Currently the Lebanese produced snails under LTL are exclusively exported to Italy, a very small percentage (less than 1 percent) are informally distributed by farmers, at the individual level, to restaurants in Lebanon. Daou says they are working on developing a Lebanese market for their producers under a common brand name which will be found in supermarkets, farmers’ markets and the hospitality sector. “We are currently researching international best practices of doing so because in this way part of our produce could be sold in Lebanon, which could open the market for smaller scale producers who don’t want to export,” explains Daou.
Daou, who has yet to return his initial investment in the project (he estimates he will return it within the next two years) says growth is slow. “It will happen but it will be slow, especially since it is an individual and private sector effort and not a national level one,” he says, explaining that while the Ministry of Agriculture has been helpful in facilitating and providing the necessary paperwork needed for export to European Union countries, it couldn’t support snail farming financially as their budget is too small.
Despite the slow pace, Daou continues to believe in and work for the potential of snail farming to the agriculture sector in Lebanon, and to the Lebanese economy as a whole, one snail at a time.
Franje mushrooms: room for fresh fungi?
It all started six years ago when, on a business trip to a fashion retail exhibition in Milan, George Hobeika came across a workshop on mushroom growing and attended largely out of curiosity.
Despite his main business being fashion – Hobeika has been operating a fashion brand outlet store called Solderie Des Marques in Lebanon since 1996 – the workshop intrigued him enough for him to conduct an informal feasibility study to evaluate the project’s potential in the local market. “I found that there was a high demand in the market for fresh mushrooms, most of which were being imported from the Netherlands with a small percentage coming from Syria,” says Hobeika. He adds that, while there were existing businesses producing mushrooms in Lebanon, he didn’t think they were well developed and he therefore felt that he’d be able to significantly contribute to the market.
[pullquote]Today, Franje employs 15 people full time and has eight 18 meter squared mushroom production rooms[/pullquote]
With an initial investment of $1.5 million secured through a loan from Kafalat Plus from Kafalat – the Lebanese financial company which provides guarantees for loans to small and medium enterprises – and private investors, Hobeika and his brother Elie established Franje, Agriculture Trading Company sal, in 2011.
They brought the equipment and materials needed from the Netherlands and hired Dutch consultants to work with them for two years, helping them launch the project and set it on the right track. They also signed a joint venture with the Mushroom Office in the Netherlands through which their mushrooms were certified as meeting quality control criteria such as not using fungicides.
Substantial investment in materials and equipment aside, Hobeika, who took a year and a half long online course on mushroom growing which culminated in exams that he sat for in the Netherlands, stresses that the most important aspect of this venture is the grower’s expertise. “It’s not enough to have a lot of money to invest in the project’s initiation, you have to invest it in the right grower. This is because the quality of mushrooms depends on the skill and dedication of those who grow them. It’s that simple but it’s also that complicated,” he explains, adding that mushroom growing requires patience and precision.
Today, Franje employs 15 people full time and has eight 18 sqm mushroom production rooms yielding an average of 30 tons of mushrooms per month. Ninety percent of the production is white button mushrooms, which Hobeika explains are the most affordable for consumers and the most in demand in Lebanon. Hobeika also produces oyster mushrooms and portobello mushrooms, which are mainly sold to French and Italian restaurants. More recently, he introduced shiitake mushrooms to Franje’s portfolio, with Japanese restaurants being his main clients.
Franje mushrooms are distributed in supermarkets, grocery stores, restaurants and hotels with the percentage share of hospitality venues versus retail markets depending on the season, according to Hobeika, who gives an example of retail being more active in the winter when at-home celebrations abound versus hospitality grabbing the larger percentage share in the summer with the wedding and tourism season.
[pullquote]Five years into this venture Hobeika says he has yet to return his initial investment, explaining that the mushroom business is difficult and growth is slow[/pullquote]
Five years into this venture Hobeika says he has yet to return his initial investment, explaining that the mushroom business is difficult and growth is slow. At the same time, Hobeika says other operators have entered the market, identifying five as “main growers”. Among them, they have almost saturated the local market needs, and are driving the selling price down. “It is not highly profitable anymore as the selling price of mushrooms has become low and they have a short shelf life of five days maximum. So you end up having to decrease your price to be able to sell your growth, especially since the market is saturated, and you end up hurting the other growers as well,” laments Hobeika, who says that when they first began operating, they were “much more comfortable” as they were almost alone in the market.
According to Hobeika, the Ministry of Agriculture helped form an association of mushroom growers in Lebanon around three years ago, although it did not take off and was later abandoned. “It would have helped us be more organized in terms of unifying the price of mushrooms, and also in applying to and receiving grants from international institutions,” says Hobeika.
Operational costs are also high, with the biggest expenditure being the cost of energy necessary to keep the rooms at the right humidity and temperature level. According to Hobeika, the cost of the compost used, which needs to be imported, is also quite hefty.
Despite these obstacles, Hobeika says he is not discouraged, explaining that since the market in Lebanon is small, they began exporting to Kuwait and Dubai in 2014. He plans to add two more rooms to his business within the next two months with the aim of increasing exports to the Gulf, which he calls a “steady and consistent” market.
Adonis Valley: the road from organic fresh produce to organic food products
Adonis Valley, a producer of organic food products (certified organic by the Italian Certification Body, the IMC) was conceived out of Fady Daw’s passion for natural production and agriculture.
Although his family’s business is in advertising, Daw paved his own path early on by majoring in agricultural engineering with a focus on food processing. He joined the non-governmental organization Green Line, which works to preserve nature, and began working on promoting the organic market in Lebanon as early as 1998 when the term was still uncommon to Lebanese consumers.
In 2000, Daw, who was initially producing honey, also started growing organic fruits and vegetables alongside the honey. Soon after, he began experimenting with the surplus of his fresh produce and started making organic long term shelf products such as tomato paste and jams, although his operation was small scale and unbranded.
At the same time, Daw started experimenting with innovative food products that were uncommon in Lebanon, and that he could produce using organic products. “The idea for sun-dried tomatoes came in 2005 after I had developed my tomato paste, ketchup and tomato sauce, but all these were traditional items and I wanted to complete the tomato range with something more creative and unconventional. I discovered that in Lebanon we import sun-dried tomatoes from Italy, and I thought that I could easily produce them here, knowing that the kind of tomatoes I use for the paste works very well for sun-dried tomatoes,” recounts Daw.
In 2006, Daw decided it was high time to make his venture branded and official; he received a bank loan and relied on private funds to secure an initial investment of “at least $120,000” to establish Adonis Valley in Fatri, Adonis, in the Mount Lebanon region.
[pullquote]Today, sun-dried tomatoes constitute30 percent of Adonis Valley’s total sales[/pullquote]
Today, in addition to the traditional organic food products line, Adonis Valley is the only producer of organic sun-dried tomatoes in Lebanon and Daw proudly boasts that some highly reputable chefs in Lebanon favor Adonis Valley products over the imported variety. He explains that his sun-dried tomatoes’ competitive edge is that they are softer and less chewy than the imported ones and so can be consumed on the spot instead of having to be softened in water first.
Another positive factor, according to Daw, is that although the imported and local varieties are sold for almost the same price of $11 per kilogram, his are more cost efficient since he doesn’t soak them in oil, which takes up weight and volume that could otherwise be fitted with more tomatoes.
Today, sun-dried tomatoes constitute 30 percent of Adonis Valley’s total sales. Daw says they have an annual harvest of almost 25 tons of tomatoes which they dry into three tons of organic sun-dried tomatoes. Although the operation started in the Adonis Valley farm in Fatri in 2006, it quickly outgrew its space and in 2008 Daw moved production and the growing of all the tomatoes to the northeastern Lebanese border town of Arsal (Packaging still takes place in Fatri). Other reasons cited by Daw for the move include that Fatri does not get enough sun and labor is more expensive there.
Daw calls the business model he follows in Arsal a fair trade one. As a first step, he contracted a farmer called Mahmood, organically certified his land, provided him with the proper organic tomato seedling variety, the right techniques to grow them and guaranteed that he would buy his entire produce at harvest time in return for an agreed upon sum. Daw argues that this process saves the farmer from the uncertainty of whether his conventionally planted crop will be sold or not and the hassle of having to display them in the fruit and vegetable market. Then, he approached a women’s collective where he trained 14 women on the modern techniques of drying tomatoes. Packaging is still done in Fatri.
Daw replicated this model in 2008 with his caper growing and production line, sourcing it to growers and a women’s cooperative in Hermel, and, more recently, around three years ago, with his freekeh (green wheat) production line which he sources in Bint Jbeil, south Lebanon. “This is my [corporate social responsibility] as I am contributing to the development of businesses in rural areas,” says Daw proudly.
In addition to the sourced employees and contractual seasonal ones, which Daw says are “many”, Adonis Valley has four permanent staff members working on management and marketing and an extra five employees who help with the packaging during the summer.
Adonis Valley’s sun-dried tomatoes are distributed to both the retail and hospitality sector in Lebanon with 60 percent of products being sold to the hospitality sector and the remaining percentage to organic and healthy lifestyle stores across the country. Part of the production is also exported to Dubai and Kuwait.
Daw is also currently working on the construction of the first certified green building and farm on his land in Fatri and is investing a total of $150,000 into the project which he hopes to launch this summer.
Good Earth Produce: innovation in local production of fruit and vegetables
When you have built a career around distributing locally grown and imported fruit and vegetables, it seems only natural that you would reach a point where you start considering the possibility of growing some of these imported varieties in your homeland.
Elie Maalouf’s history with fruit and vegetables began over forty years ago with his company Liban Fruits, a wholesale distributor of ISO 2200 certified imported and locally grown fresh fruit and vegetables exclusively sold at wholesale fruit and vegetable markets. In 2000 he launched a distribution company which sold produce to hotels, restaurants and some main retail chains to be able to provide smaller quantities and have more targeted distribution.
Ten years ago, recounts Maalouf, the demand for mushrooms and endives was very high in Lebanon, owing to the wide variety of Italian, and to a lesser extent, French restaurants. This demand, especially for mushrooms, gradually spread from the hospitality sector to consumers’ households.
At the time, all the mushrooms and endives on the market were imported from the Netherlands and France and were quite expensive so Maalouf, together with his son Marc, saw potential. “The demand was high and so was the cost of export, so their selling price was high as well. We saw the opportunity to begin growing them in Lebanon and started the Good Earth Produce in 2011 to grow different varieties and colors of mushrooms and endives,” says Maalouf.
Other than saving on the cost of importing these items, which is a crucial factor, Maalouf believes the locally produced variety tastes better because the products are picked daily and delivered the same day, as opposed to the imported variety which takes up to 48 hours to arrive by air freight.
The Maaloufs invested $1.2 million into securing the necessary equipment and the raw materials for mushroom production and the services of a consultant from a Netherlands based company who remains in daily contact with the production team. They consider the growing of endives to be part of this investment, as endives and mushrooms are basically grown in the same manner – in stacks in rooms with digitally controlled humidity, the only difference being that endives are grown in the dark to prevent chlorophyll from turning it green – and so need the same major equipment such as generators and electronic humidifiers.
Good Earth Produce has six 700 sqm rooms for mushroom production, which currently produce 30 tons of mushrooms per month, with that number increasing during times of peak consumer demand such as the holy month of Ramadan. “We have the capacity to produce two tons per day but we don’t do so because there is no high demand currently. When you work with fresh produce, you have 24 hours to sell to retailers and the hospitality sector because fresh items have a short shelf life and they might already be staying with them for two days until they get sold or used,” explains Maalouf.
Fresh mushrooms seem popular among Lebanese consumers, with even neighborhood grocery stores selling them, and Maalouf says the market penetration of locally produced fresh mushrooms is around 90 percent (versus imported mushrooms) with around six main mushroom farms growing them in Lebanon.
[pullquote]Other than saving on the cost of importing these items, Maalouf believesthe locally producedvariety tastes better[/pullquote]
Endives have not fared as well as mushrooms in Lebanon, despite their earlier popularity. Good Earth Produce is the only company that grows it locally and Maalouf says its market penetration is 35 percent as compared to imported endives. Good Earth Produce currently grows 750,000 kilograms of endives per week but says that it goes up to 2 tons per week when the consumer demand is high such as, again, during Ramadan or the summer months when it is used by wedding caterers.
Maalouf blames the current relatively lower popularity of endives (when compared to mushrooms) on a smaller market, where it is mostly consumed in restaurants or special occasions at home, and on Lebanese consumers’ constantly changing taste in lettuce, which has moved from romaine to endives to lollo rosso and, most recently, to kale.
Still, the fact that there is a local production of endives – sold at $5 per kilogram instead of $7 per kilogram for the imported ones – has had some impact on increasing its consumption in Lebanon. “In the fruit and vegetable wholesale market, the fact that there are local endives at a price less than the exported variety made this product more accessible and caused retailers to be more excited about buying it. The same is the case for the hospitality sector, where you find endives on more menus,” says Maalouf.
Endives and mushrooms grown by Good Earth Produce are sold through Liban Fruits in the wholesale fruit and vegetable market for retail, and they distribute directly to the hospitality sector and some retail chain supermarkets through their distribution company (instead of supermarkets buying them from the wholesale market).
In the hospitality sector, Maalouf says many chefs are switching from the imported endives and mushrooms to the ones grown by Good Earth Produce and today they have more than 90 clients among chain restaurants and hotels.
While Liban Fruits does export locally produced fruit and vegetables to the Gulf countries, Maalouf says a negligible number of their clients there ask for Lebanese produced mushrooms and endives. Maalouf explains that it is more efficient for their Gulf clients to import these items from Europe where they are produced en masse, and would therefore be priced lower than the ones at Good Earth Produce, which are produced in smaller numbers than in Europe.
Another reason for the export price variance between Lebanese produced mushrooms and endives and European ones is the higher cost of producing them in Lebanon – where, according to Maalouf, energy is the highest expense.
In considering locally producing niche items – such as mushrooms and endives, Massoud says they first determine how big the local demand is and then balance that against the cost of import to see whether or not it would make economic sense to develop the product in Lebanon. They recently added locally grown kale and colored varieties of cherry tomatoes to their portfolio at Liban Fruits.
Maalouf says they are more successful than they expected with Good Earth Produce, but that one of the reasons we are not seeing such niche items go national is due to the fact that they are not basic food products in Lebanon. “Growing such niche items requires a lot of advance planning because when instability rocks the country, these are the first products that people would stop buying,” he explains.