Eli Ben Zaken of Castel Wineries: The boutique revolution has led to a big improvement in quality on all fronts.When you speak to Israeli wine makers about the local industry, the word that they keep using is ‘revolution.’ And while Israelis may have a flair for hyperbole, in this case the excitement is justified: the local wine industry’s cup has been overflowing in recent years, with even higher expectations for the future.

From its modest beginnings, it is now believed that as many as 200 wineries operate around the country, most of these being small boutique wine makers. Many produce wines on par with other regions of the world, and frequently win awards at international exhibitions. Annual consumption per person is now estimated at some 6.5 liters, although one survey put that figure as high as 12-15 liters per person when religious Jews and Muslims are not counted. The latter figure would rank Israel higher than the United States’ 11 liter-per-year average, although it remains much lower than the 60 liter-per-year consumption found in France, Spain, and Italy.

As in most countries, wines made from popular grape varieties like the red Cabernet Sauvignon and Merlot, or the white Chardonnay, are the most popular sellers, but most major varieties are produced here, and niche grapes like the Syrah, Pinot Noir (popularized in the recent US film Sideways), Sangiovese, Pinotage, Tempranillo and many others are being developed with some success. While most of these wines are made for the local market, exports are also rising at a dizzying pace.

The reason for the growth is a combination of several social factors, says Udi Kaplan, who manages Ella Valley Vineyards near Beit Shemesh.

“Over the past ten years. Israelis started to travel around the world more, and tasted more fine wines in cafes and restaurants. At the same time, they also started to learn more and understand good wines. That led to a rise in local consumption. Meanwhile, more wineries started making good wine, and that raised awareness of wine and increased competition. These factors together have caused the industry to grow from every side,” he told ISRAEL21c.

For some, talk of Israeli wines brings up images of sweet, syrupy wine tolerated primarily for ceremonial use by religious Jews. Until the late 1970s, that was all Israel had to offer. From before the state’s founding until then, a single cooperative had a monopoly on the industry. Conceived by Baron Edmond de Rothschild in the 1880’s in an effort to boost Jewish industry, the group, which was renamed Carmel Mizrahi in 1957, built massive wineries in Rishon Lezion and Zichron Yaacov that would serve as the nation’s main wine facilities for more than 100 years.

However, notes expert wine maker Eli Ben Zaken, Carmel’s trade agreement with Israel’s grape growers was one that encouraged quantity over quality, and for years, there was no financial incentive for anyone to produce higher-quality wines. Thus, from the state’s founding in 1948 until jut several years ago, local wine consumption was stagnant at about 3.9 liters per person per year, with little cultural interest to anyone.

The seeds of change were planted in the 1970s, when experts discovered that the soil and climate of the newly-captured Golan Heights were ideal for raising wine grapes. Vines were planted, and in 1983, the Golan Heights Winery released its first wines to the public. Some economic setbacks would follow, but it quickly became clear that Israelis had the capabilities to produce world-class wines. Golan Heights is now the second-largest wine producer in the country, after Carmel, and is widely credited with putting Israeli wine on the map. Its Katzrin facility, which offers tourists a multimedia tour and wine tasting, still produces some of the best wines in the land.

Today, it is estimated that 7,500 acres of vineyards around the country produce about 50,000 tons of grapes a year, and nearly 80% of the wines produced are dry red and white types. The local market is estimated at some $150 million, after growing more than 10% a year in the past few years.

All this talk about revolutions makes it easy to forget that wine was a strong part of Israel’s culture for hundreds of years. The bible frequently describes the land’s vinicultural capabilities during the Jewish people’s trek through the desert, and Talmudic literature is rife with detailed references to wine harvests, production, and consumption. As with many aspects of Israeli life, that legacy has become part and parcel of the current story as well.

Ella Valley was started by several wealthy investors who dreamed of making kosher wine in Israel, and chose the location after analyzing such factors as its humidity, temperature differential, and soil quality. But, Kaplan notes, the real beginning came when archaeologists uncovered an ancient wine press in their farmland.

“This helps us really feel the connection to history, that we are making the same wine our forefathers did thousands of years ago,” says Kaplan. The vineyard features the press prominently in its logo, to strengthen that tie. “Marketing wine is very psychological. People buy for the story, the myth behind it.”

It seems to be working, especially with foreigners. Kaplan says Ella exports more than 40% of its wines, much more than the industry average of about 20%. The country’s wine exports total $13 million a year, according to the Federation of Israeli Chambers of Commerce, but industry players are counting on that figure to rise. Beginning this past summer, new initiatives by Israel’s Industry, Trade, and Labor Ministry, among others, have set out to promote Israeli wine on a global scale, investing $1.12 million a year over a five-year period. US law firm Nixon Peabody LLP also hosted a Wine Export Conference in Tel Aviv in July.

“Most of the boutique wineries in Israel are very small, and don’t have the capital to really market themselves abroad,” notes Amir Sarig, an assistant winemaker at Recanati Winery. “They also don’t have the networks to handle distribution, which is the key to selling.”

Another keys to selling Israeli wines is kashrut certification, Ben Zaken notes. His Castel winery, which is generally considered one of the best producers in the country, obtained kosher status in 2003, more than ten years after he started the winery, to reach the religious Jewish market. Castel, a boutique winery near Jerusalem that produces just 100,000 bottles a year, was already ahead of most of its peers in marketing, and Ben Zaken insists the switch is already improving its position.

“You have to recognize that most of the kosher wine in the world is still made outside of Israel, and that the biggest buyers of Israeli wines are religious Jews,” Ben Zaken says. Tzora, another highly regarded winery located on a kibbutz near Beit Shemesh, also went kosher in 2002 with similar results.

What’s next for the wine industry? Sarig fears the industry is on the verge of overheating, as the new glut of boutique wineries forces the less-competitive ones to merge or close down. Indeed, a number of wine makers have closed up shop, and even the giant Carmel Mizrahi has been on shaky ground through the market transition. Even retail prices in wine shops are down slightly from a year ago, he says.

But Ben Zaken is only optimistic. “The boutique revolution has led to a big improvement in quality on all fronts, and even Carmel and [number three producer] Barkan have shown marked improvement. Israelis are buying more, and we expect consumption to rise by a few more percentage points in the coming year.”

“The best is still ahead,” Ben Zaken smiles, taking a glass of wine to his lips.