Bottom-up or top down?

By LEVI SHAPIRO
Bottom-up or top down? This theme about economic development was addressed repeatedly at the World Economic Forum last week in Davos. How can governments, and industry bodies, transform nascent local industries into world-class centers of excellence? The most famous, top-down example in Israel is venture capital. Matching grants from the government''s Yozma program helped the Israeli venture capital sector gain traction and become #2 in the world. Unlike venture capital, the Israeli wine industry has adopted a bottom-up approach.  A few individuals are helping introduce the Israeli Wine "brand" to an international audience. In particular, there is Daniel Rogov, author of Rogov''s Guide to Israeli Wines, and Adam Montefiore, Wine Development Director for Israel''s largest winery, Carmel and Yatir.
Daniel Rogov, Wine Critic for Ha''aretz newspaper, tastes 30-35 wines per day. For the 2011 edition, Rogov reviewed more than 2,000 wines from 150 vineyards. The chain-smoking septuagenarian from Brooklyn makes no apologies for negative reviews. "My Boss is the reader. When I first started reviewing Israeli wines thirty years ago, the quality was abysmal." Rogov famously reviewed one wine by saying, "It is drinkable…the question is who would WANT to drink it." In the interim, the industry has improved. "Today, one quarter of the wines from Israel are outstanding."
Because supermarket chains stock only Kosher wine, most Israeli wine is Kosher. "Kosher has become irrelevant…what matters most is quality. These wines should be branded as part of the Eastern Mediterranean region, not just Kosher."
Rogov helped popularize Israeli wines for a global audience. Now prominent wine critics Robert Parker, Hugh Johnson, Mark Squires and Oz Clarke feature sections about Israeli wines in their books. Even web sensation Gary Vaynerchuck tasted Israeli wines with Rogov on Wine Library TV.
Despite rapid growth, Israel is still only the world''s 36th largest wine producer. In fact, the boutique winery Gallo (once called Gallo of Sonoma) produces more than all of Israel. The three largest producers (Carmel, Barkan, Golan Heights) represent over 75% of the 2011 harvest. Moreover, ninety percent of last year''s nearly $30 million in exports came from just twelve wineries- Carmel, Barkan, Golan Heights, Binyamina, Castel, Dalton, Ella Valley, Galil Mountain, Recanati, Tabor, Teperberg and Tishbi.
According to Rogov, "the way to grow the industry is simple…education, education, education." In addition to exports, "wine producing areas must rely on selling the bulk of their wines in their own territory." Currently, domestic wine consumption in Israel is among the lowest in the world. The 4 bottles consumed annually per person is well below France (71), Italy (67) and the UK (26 bottles).
Rogov''s book has two volumes, one for Israeli Wines and another for Worldwide Kosher Wines. He ranks Golan Heights, Yatir, Margalit, Castel and Clos de Gat as the Top 5 Israeli wineries. The twenty six wines with the highest scores include 8 from Golan Heights, 5 from Carmel, 4 each from Clos de Gat, Castel and Margalit and 2 wines from both Pelter and Yatir. The highest scoring Kosher wine (96 points) is Yarden Rom 2006. Margalit Cabernet Sauvignon Special Reserve 2008 took the most points for non-Kosher wine (95). In the Kosher Guide, Hagafen Prix Melange (Napa Valley) 2004 earned the best result (95).
One of the other major figures over the last twenty years for promoting Israeli wines abroad is Adam Montefiore. This includes more than a decade each at two of the largest, and most prestigious, Israeli wineries - Golan Heights and Carmel. Adam helped expand international reputation and audience.
The Golan Heights Winery now produces over five million bottles a year, much of it for export. At Carmel, Montefiore is part of a team that re-oriented Israel''s largest winery from low-end to high quality. Production volume and export markets were reduced drastically in order to focus on the high-end, premium category. Carmel shocked the wine world last year by winning “The International Trophy” in the Decanter World Wine Awards in London.
"My career and hobby is the same- advancing Israeli wine", says Montefiore. He contributes the Israeli wine section for several of the most famous wine guides and writes about Israeli wine for the Jewish Chronicle (UK) and Jerusalem Post.
"The best resource we have is the wine itself. Doing tastings- with sommeliers, wine press, retailers- is the way to get the message across. While the symbol of Israel was once the Jaffa orange and the kibbutz, today it is quality wine and high-tech. We want people opening a bottle of Israeli wine to think of ingenuity, climate, technology and Mediterranean sunshine. Our industry can symbolize all that is good about Israel."  
Adam praises Michal Neeman of the Israeli Export Institute. The organization arranges overseas tastings, marketing materials and visits by international guests to the Israel Wine Expo.
"In the non-Kosher market, branding should emphasize the local terroir, which is ''Eastern Mediterranean''. Israel will never have the volume, or low costs, of Australia or Chile. The more appropriate example is New Zealand. They have the highest average price among major wine-producing countries and a very healthy industry."
With limited resources, wineries like Castel, Yarden and Yatir have built their reputations by winning international awards and receiving high scores from critics. The ''Best Wine'' award to Carmel last year from Decanter also brings recognition and awareness to the entire industry. "Branding is winery led. Each winery and the winery personnel play an important part."
Promoting an industry from the bottom-up is not an easy task. Rogov, Montefiore and others are helping the Israeli wine industry translate improved quality into a stronger brand. To them, we lift a glass and say "L''chaim"!