Combine and conquer
boutique wineries to mount a joint marketing campaign in the UK and
other important wine markets. The companies will hope to shake off
their kosher-only image and emphasise their quality credentials.
Israel may not immediately spring to mind as one of the world's major wine producing nations, but there are a number of large wineries there keen to expand their business to the major wine consuming nations.
While most Israeli wineries have focused primarily on kosher production - wine made by orthodox Jews and in accordance with strict religious principles - this clearly has limitations in terms of potential market. Of course, there is a huge market for these wines in Israel itself, and among the Jewish diaspora in other countries, especially during Jewish religious holidays, but by being pigeon-holed as kosher wine makers, Israeli producers are losing out on potentially lucrative markets.
In a bid to shake off this image, the country's biggest winery Carmel has joined forces with a number of smaller producers there in a joint assault on the all-important UK market - one of the most important in the world for most wine producing nations.
In truth, Israeli wineries have far more to offer than simply kosher products. The industry has long focused on quality production - it was started virtually single-handedly by French wine impresario Baron Edmond de Rothschild in the late 19th century, and it was his operations there which eventually became the Carmel Mizrachi group.
Not surprisingly given this French heritage of wine production there, among the most popular grape varieties in Israel are Cabernet Sauvignon, Merlot, Chardonnay and Sauvignon Blanc, although recently new varieties such as Pinot Noir, Syrah, Sangiovese, Cabernet Franc, Gewürztraminer and White Riesling have begun to appear.
Carmel accounts for over 60 per cent of Israeli wine output - more than 20 million bottles a year and turnover of $65 million - and is the biggest exporter as well, accounting for more than half of all Israeli wine exports with sales of around $5 million. But even it has had relatively low levels of success in expanding sales to major consumer markets, tending to focus on countries such as the US with a significant Jewish population.
For several years now, though, the company has been attempting to establish a reputation not as a kosher wine producer, or even an Israeli producer, but rather as a Mediterranean producer, building on the popularity of wines from southern France, Italy, Spain and even Greece.
This has been helped by a considerable investment in quality wine production - building new wineries, employing winemakers from Australia and France, etc. - and Carmel is now in a much stronger position from which to tackle markets such as the UK where wine drinkers are often more knowledgeable - and more demanding.
The 1990s saw a wine boom in Israel, and Carmel has now been joined by over 100 wineries, most of which are boutique wineries or 'garagistes'. Over 75 per cent of the wineries were founded in the last 10-15 years.
The company has teamed up with six of these boutique producers to target the UK - its second largest export market after the US - and other important markets by showing drinkers there exactly what Israel has to offer. With this in mind, each winery represents a different region in Israel, each with its own distinctive qualities and styles. Where possible, the wines will be distributed together.
David Ziv, chief executive of Carmel, said that the aim was to show the quality and variety of the Israeli wine industry and to advance the image of Israel as a quality wine producing country.
"The combination of Carmel and the boutique wineries is intended to present 'the very best of Israel'," he said. "There will be joint events such as tastings, shared stands at exhibitions, invitations to journalists to visit and winemakers dinners."
The wineries involved in the scheme are Amphorae Vineyard, Bazelet ha Golan, Domaine du Castel, Chillag Wine, Saslove Winery and Tzora Vineyards. Carmel's own boutique wineries, Yatir and Zichron, will also be represented.
The size of the task facing the companies is enormous, but the potential gains are clear. Israel accounts for less than 0.1 per cent of teh total UK wine market, compared to France with more than 22 per cent share of the off-trade and 40 per cent of the on-trade.
