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Smaller Israeli Wineries Need Support

About 95% of Israeli wine is produced by its twelve largest producers while between 300 to 400 smaller wineries each produce thousands, tens of thousands or hundreds of thousands of bottles.

Of those top twelve producers, some bottle and distribute Coke and Pepsi, brew Israel's most popular beers, are featured by a supermarket chain or a chain of wine shops that own or co-own them. So, for smaller wineries, it's often an uphill battle to get shelf space in shops or on restaurant wine lists when the "Big Twelve" can leverage their clout and economy of scale pricing to keep the smaller and very small wineries on the sidelines.

Exports overseas mostly to North America and Europe help although, as a whole, they only account for about 10% of Israeli wine sales. For smaller wineries, it can be quite appealing to have an importer take wine away by the container and get paid by one large check then to have to distribute to dozens or hundreds of clients and chase them down to pay. Yet, then the average price per bottle paid to the winery must be priced comparatively quite low to compensate for shipping and the mark-up middlemen make before being priced to be competitive on shelves and wine lists overseas.

So, how else can smaller commercial and boutique wineries survive?

Well, lessons can be learned from other wine regions. In California, for instance, over 50% of boutique wineries sell 50% or more of their wine to tourists stopping by the winery or a satellite tasting room. Those are numbers that almost any Israeli winery would envy since many struggle to even sell half that much on their premises. One of the biggest advantages of selling wine at the winery is that the winery keeps a much larger chunk of the retail price which for a smaller winery helps compensate for their smaller production.

A bottle of wine priced at NIS 100 retail, for example, might sell to a wine shop or restaurant closer to NIS 70 wholesale and of that 15% could go to a distributer. When you then subtract the value added tax the winery might be lucky to see half of the shelf price. Wineries without an active tasting room often have inflated prices to compensate for this disparity but then they tend to be less competitive with wines of the same caliber.

So, if smaller than a million or more bottle Israeli producers are going to remain sustainable it seems evident that most need to increase and promote tourists to visit and buy their wines at the source.

Some wineries are doing better than others at attracting and hosting guests to their tasting rooms. But as a whole, the country, its wine regions and most wineries could do far better by bringing tourists to their tasting rooms whether those tourists are residents or from overseas.

There have been some efforts but in hindsight they seem disjointed, limited and often counterintuitive.

Firstly, Israeli producers have been at odds at finalizing official appellations (wine regions) for the country. This political squabble is stalling branding the regions effectively since wineries, regional tourism councils, national agencies, and travel agents are likely to make more of an effort promoting wine tourism when they are confident that literature, advertising and branding won't risk becoming irrelevant if or when forthcoming designations arrive. The industry should move ahead with a system that can be revisited in the future. Official wine regions are recognized internationally as a country's way of promoting wines of higher quality. The absence of it diminishes the brand of not only wine tourism but also of the value of bottles for sale. For instance, a bottle of Napa Cabernet sells for far more than the average California Cab just as Burgundy Red sells for more than any other French Pinot Noir. That elevated stature also attracts tourists to the wineries from within their own countries and from abroad.

Secondly, the industry does a woeful job promoting wine tourism in any language other than Hebrew. By some accounts, they do not do well in Hebrew either. Hebrew is not an international language. With over one third of Israel citizens being immigrants with a different native tongue on top of most of Israel's 70,000 weekly visitors to wineries not speaking Hebrew, you might think that there would be an effort to get the word out in English as well if not also in French and Russian. For instance, the only printed wine map in Israel in English is a national map which might be good for planning a day trip's destinations but quite lacking for finding your way to wineries which typically have poor or no signage. Each wine region should have wine maps in Hebrew and at least English that could be sponsored by the Ministry of Tourism, regional councils, and the wineries themselves. Some hotels have shown interest in supporting this effort by contributing resources but have been ignored, so far. Online maps and even phone apps and placement on existing popular apps should also be implemented.

Additionally, taxi drivers and bus drivers rarely seem to know where any of the wineries are in the regions they serve. Incentives for taxi drivers and bus routes that go by wineries would obviously help get guests to the front doors of wineries. Trains from Tel Aviv and Jerusalem and all the stops along the way could promote wineries close by their stations such as the cluster of wineries that are near Beit Shemesh or Binyamina. 

Along those lines, in the past there were efforts to try to have existing tour guides receive specialized instruction in wine tourism but it didn't seem to have an impact. A new class of wine and/or culinary guide seems more apt if it is to suit the needs of the visiting tourist instead of existing tour guides who may or may not have the inclination or aptitude to host oenophiles along the lines they are accustomed to in other countries. The one year of studies tour guides take on all of Israel's historical sites is irrelevant and an impediment to promoting its wine and culinary scene if it's a requirement for official support.

Wine festivals as well, of which there are no shortage in Israel, need to work more effectively at promoting wine tourism. Most do little or no promotion outside of Hebrew. And more often than not, promotion starts only weeks in advance instead of the months in advance that most international travelers would prefer to plan their vacations to take advantage of advanced booking discounts on air travel and room rates. Regional festivals too need to think outside of the box and not just hold events in their region which often aren't easy to get to even for locals— they should also hold festivals in Jerusalem and Tel Aviv. Pre-existing festivals should also group wineries by region and have maps available for locals and tourists who might want to follow-up with a trip. Regional festivals should also be hosted overseas.

Last but certainly not least, wineries need to more effectively promote themselves in traditional advertising, as well as online, especially in social media. They need to pressure their local and national tourism boards to use their resources to holistically and not diagnostically take Israeli wine tourism to its next level. Yet, one might wonder if it's all for nothing, if winery and restaurant staffs across Israel are not prepared to host guests close to international standards.

David Rhodes is a California trained sommelier who has worked at wineries and restaurants in the USA and Israel and led a nonprofit effort to promote Israeli wine exports and tourism. David can be reached online at This email address is being protected from spambots. You need JavaScript enabled to view it. or on his Facebook group Drink Israel. 



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Friday, 19 July 2024

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