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In Israel's Negev desert, a budding wine boom

In Israel's Negev desert, a budding wine boom

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Are Israel's boutique wineries fighting a losing battle to survive?

Credit: Charlie Osborne/SmartPlanet

BE'ER SHEVA, ISRAEL -- As you drive through Israel's Negev desert, you would be forgiven for assuming that the land is lifeless.

The ground in the Negev is uneven at best; rocks jut out of every plain. The sloping hills ensure that when the desert experiences the occasional flash flood, measuring sticks at the side of the road are needed to warn drivers when traveling is too dangerous. Following a narrow track that's just wide enough to allow a bus to trundle through, it winds between haphazard hills of rock and dust and sparse vegetation. Only the occasional ibex awards a visitor changes in scenery.

It would be, to most eyes, the worst place -- so imaginably inhospitable -- to choose to plant anything, much less a vineyard. But Israelis are keen to promote and develop any resource they have to boost the country's economy. Twenty years ago, they chose the arid Negev to foster a fledgling winemaking industry.

Today, there are more than 250 wineries in Israel producing 36 million bottles of table wine each year. Twelve percent is exported to other countries, mainly to the United States. In 2011, the country's exports totaled $26.7 million.

Despite that relative success, Israel claimed just 0.02 percent of global market share in 2010, according to The Wine Institute. That pales in comparison to worldwide leaders Italy and France, which enjoyed 17.5 percent and 16.2 percent share, respectively.

Despite the difficult climate of the Negev, which accounts for more than half of Israel's total landmass but is occupied by only eight percent of its population, winemakers there have expressed a desire for Israel to compete on wine's global stage. But they face new headwinds that threaten their very survival.

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Though Israel's boom in boutique wineries began 20 years ago, the global market for Kosher wine has existed for centuries. It is produced across the globe by many of the world's leading winemaking countries: the United States, Italy, Spain, France, Australia, Chile and yes, Israel.

Israeli winemakers face several challenges, but their largest is arguably reputation: Kosher wine is widely considered cloyingly sweet. This is due in part to the wine's sacramental role -- it was once restricted to ritual and not enjoyment -- and also a religious law that requires it to be boiled to relieve suspicions of desecration through handling by non-Jews.

Because Israel is so strongly identified with Judaism, its winemakers struggle to convey to customers that they serve a broader audience than merely those who require religious products. They seek an Israeli identity that is more Mediterranean than mevushal, fighting the assumption that all Israeli wine is Kosher.

There are other challenges. Aaron Fait, senior lecturer for the Jacob Blaustein Institutes for Desert Research at Ben-Gurion University of the Nagev, says that price sensitivity by international buyers also plays a part. His research focuses on identifying the perfect quality and quantity of water needed to grow wine grapes in the desert.

"Israel's wine industry is actually moving fast and enlarging greatly," Fait said. "The only thing that keeps it from expanding more is the relatively high price for a bottle."

As global competition heats up in the wine market, Israeli wines find themselves priced relatively higher than their counterparts from elsewhere: about $10 for a low-to-medium quality bottle, and at least $20 for anything considered high quality. The price premium, which reflects the high cost to grow and process wine grapes in Israel, may deter the consumer even further.

Can Israeli wines successfully compete overseas with the likes of France, Italy and the U.S.? Adam Montefiore, Wine Development Director at Carmel & Yatir Wineries, said the country's up-and-comer reputation can be an asset.

"Israel represents, and is part of, the eastern Mediterranean, the cradle of wine culture," he said. "For sommeliers and wine professionals, it represents a new, quality, slightly exotic wine country in one of the oldest wine growing regions in the world."

Perception matters. Even though thirty-five percent of sales go to Western Europe, France, Belgium and the U.K., a majority -- 55 percent -- go to North America and Canada, Montefiore said. A little "Old World" charm goes a long way.

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Credit: Charlie Osborne/SmartPlanet

The Negev region is only responsible for five percent of total vineyard plantings in Israel, but it is a vast swathe of untapped land that many Israelis wish to cultivate. It represents opportunity: for its young winemaking industry to grow and increase global exports, and for a Middle Eastern country best known for its ongoing conflict with Palestine to refashion itself as a thriving, modern tourism destination.

Indeed, the Negev desert wine trail is an example of how the wine industry has grown in the last decade, with more than two dozen wineries now in operation.

Kornmehl Farm is one such winery. Hilda Kornmehl, daughter of owners Anat and Daniel, is involved in the production of wine and the raising of goats to produce cheese on the farm. The family's 18-year-old winery produces up to 3,000 bottles per year.

“We were the first people to answer the call to create cottage industries in the Negev,” Anat told the American weekly newspaper J. in 2012. "We picked this spot because it was clear that the area once sustained a farm and that it was a thriving area."

Despite its desert status, the land of the Negev region is able to absorb water surprisingly easily. Water collects and pools in low-lying valleys, allowing vegetation to grow.

Methods to harness that water to grow crops were first developed in the Byzantine era in the 4th century. The land was developed -- obstacles were removed and terraces were built to direct water toward crops -- allowing agriculture to flourish.

An abandoned Negev fish farm. Credit: Charlie Osborne/SmartPlanet

As much as 30 percent more runoff was produced through this method, according to Hendrik Bruins, professor at the Swiss Institute for Dryland Environmental and Energy Research. The technique ensured more efficient and successful wine production.

In today's global economy, where economies of scale drive innovation, Israeli farmers use desalinated water -- seawater stripped of its salt -- in drip irrigation systems, which help reduce water waste. But the desalination process is expensive, so farmers have also resorted to using brackish water, found more than 2,200 feet below the ground's surface, to water olive and grape vines.

Pedro Berliner, director of the Jacob Blaustein Institute, said these stresses -- drought conditions, use of water with a high concentration of salt and low level of oxygen -- impact the final product, lowering yields but producing a sweeter wine with more sugar. Berliner is involved in the use of intercropping to help creative farmers maximize the land and crop yields.

"Plants under stress produce more carbohydrates and so more sugar, which changes the taste of the grape," Berliner said.

To maximize margins, wineries in the region make mostly red wines, which are less costly to produce. More recently, a few producers have tried their hands at making wine from white chardonnay grapes.

Still, the hostile desert environment makes turning a profit a challenge, and farmers here try to maximize land usage to survive. Some areas dedicate space to raise goats and sheep, other areas look to raising decorative fish for European and Asian buyers, using the same water that will eventually end up in the field.

Where there are crops, those of high value dominate: pomegranates, spices, ingredients found in perfumes.

Local researchers are looking at ways to improve yields through intercropping -- growing two types of crop such as planting grain within an olive grove -- and searching for the best ways to prune and space crop plants.

But locals don't spend much time deliberating the unusual climate in which they operate.

"Israel has been making wine for 5,000 years, including in the Negev," Montefiore said. "Why wouldn't it continue?"

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An experimental garden using only the old ways of crop irrigation. Credit: Charlie Osborne/SmartPlanet

Tourism remains the biggest, yet most elusive, prize for the boutique winemakers of the Negev.

From September through June, the region's wineries and farms compete for visitors by selling goods on-site. Some have constructed hotels and restaurants with the hope of keeping tourists in town, eyeing the successes of wine-making regions such as California's Napa Valley.

But a particular problem faces producers here: they don't own the land on which they operate.

When the region's industry was established 20 years ago, each winery owner was issued a 99-year lease by the Israeli government; purchasing the land was not permitted. Eyeing additional revenue, the government recently indicated that it seeks to auction off the land, possibly for use by larger developments like casinos and resort hotels.

There are 32 stops on the Negev wine trail, across more than two dozen farms. But the last was built four years ago. Nine hundred applications to build new farms have been stalled, hampering the growth of the region's wine industry.

Kornmehl said her family once operated a restaurant on the farm where they live, but the building lies empty today. Boutique wineries been forced to stop their expansion, she said -- in some cases, barred from offering anything beyond a wine cellar.

"It's frustrating," she said. "My father built the restaurant with his own hands, and now it must [remain] closed. We are not allowed to open it."

Local authorities want to see the region continue to develop without intervention, and some 3,500 citizens are fighting the government's wish to reclaim and auction off the land. Complicating the issue are 200,000 Bedouin who live in the Negev, who argue that the expansion of Jewish businesses in the desert is a plot to force the nomadic ethnic group out.

"Fifteen years ago, no one looked at this land," Kornmehl said.

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Credit: Charlie Osborne/SmartPlanet

With interests of local producers and the national government at odds, it remains to be seen whether Israeli wine can rise above the fray and compete in a global market worth $63 billion per year.

Hampered by a lack of promotion, an outdated reputation and political instability, winemakers of the Negev arrive at a critical juncture: can they innovate their way around the challenges before them, as they did 20 years ago in the harsh desert, or will they wilt under the adverse conditions that stand before them?

"We have been fighting this for four years, and see other farmers who want to open wineries failed," Kornmehl said. "We don't know [what will happen], but we are here."

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Charlie Osborne

Contributing Editor

Charlie Osborne is a freelance journalist and photographer based in London. In addition to SmartPlanet, she also writes for business technology website ZDNet and consumer technology site CNET. She holds a degree in medical anthropology from the University of Kent. Follow her on Twitter. Disclosure