More Related Content
What's hot
What's hot (20)
Viewers also liked
Viewers also liked (16)
Similar to Supply Chain analysis: Lebanon's wine industry
Similar to Supply Chain analysis: Lebanon's wine industry (20)
Supply Chain analysis: Lebanon's wine industry
- 1. Supply Chain Analysis LEBANON’s Wine Industry DE LUSTRAC Aurélie DILIZIEN Tangi LAIZE Elise MOUKARZEL Joseph RENAULT Agathe ROBERT Vincent VILLEDEY Benoit
- 4. BEFORE FARM GATE Imported Materials: • Viticulture: o Rootstocks o Varietals o Additives: pesticides herbicides fertilizers o Machines • Oenology: o Oak Barrels o Inox tanks o Machines o Yeast o Oenology materials o Oenologue • Final Product: o Bottles o Corks - Screw caps o Labels Domestic Materials: • Viticulture: o Rootstocks o Additives • Oenology: o Inox tanks o Oenologue • Final Product: o Bottles FARM GATE Vine Grower: • Cooperative • Independent • Under-contract AFTER FARM GATE Distribution: • Individual effort • Specialized company: Fattal, Massoud, Dima Food, Vincenti, Abed-El-Nour, Diageo. POS: • Supermarkets • Wine Cellars • Grocery stores • HORECAs Consumer: • Showy • No wine Culture • Seasonable Foreign Agent Wine Maker: • Shareholder Company • Family Business Exporters: Individual effort Legend: Relationships: • Weak • Medium • Strong Relationship location: • Inside Lebanon • Outside Lebanon
- 5. History Chateau Ksara estate, founded in 1857 by the Jesuits, Ksara is the oldest modern winery in Lebanon source: www.ksara.com
- 6. Vineyard Location Bekaa Valley: 1241 ha (57%) North of Lebanon: 633 ha (29%) Mount-Lebanon: 256 ha (12%) South of Lebanon: 50 ha (2%) Source: ENITA 2003
- 7. Technical Data • Average vineyard price: 25000- 40000 $ minimum. (vs. 108000 $ in France) • Pruning: Guyot or Gobelet. • Density: – Guyot: Max. 5000 plants per ha. – Gobelet: Min. 1600 plants per ha. • Yield: an average of 5 tons per ha. source: JP Bel, les paysages viticoles de la Bekaa, Liban; & UVL, 2011 Source: Gregory Demarque Source: Gregory Demarque
- 8. Wineries • Number: 49 and growing. (they were 8 in the 90’!(KHACHAN)) • Size: varies between 7 ha and 340 ha, however, most of them do not own their vineyard or only own a small part. The most of the production is under-lease.(ENITA) • Type: 2 types, family business or limited company with shareholders. • Another type: Cooperative, only 2 in Lebanon.
- 9. Domain’s name Estate Production/ Bottles Exportation (%) Yied Sauv Blan (Mon ge) Zahle Château Khoury 15 ha 50 000 20 20-35 hl/ha --no Château Ksara 70+270 under lease 2 700 000 45 55-75 hl/ha -- no Coteaux du Liban 6+10 ha under lease 60 000 100 40 hl/ha -- no Domaine de Baal 4.5 ha 12 000 30 18 hl/ ha -- no Domaine Wardy 35+10 ha under lease 250 000 65 16-45 hl/ha Yes West Bekaa Cave Kouroum 200 ha 700 000 40 35-40 hl/ha -- no Château Ka 70 150 000 40 30-35 hl/ha -- no Château Marsyas 55 ha 50 000 15 60 hl/ha -- no Château Kefraya 150+210 ha (under lease) 2 000 000 33 40hl/ha -- no Château Qanafar 10 + 5 under lease 12 000 -- 10 hl/ha -- no Chateau St. Thomas 30 + 35 under lease 450 000 65 30-55 hl/ha -- no Domaine de Mas Helios 8 ha 3 000 -- -- -- no Domaine des Tourelles 20 + 20 under lease 150 000 35 45-50 hl/ha -- no Heritage 5 + 50 ha under lease 300-400 000 60 -- -- no Massaya 17 + 23 ha under lease 300 000 85 40-60 hl/ha -- no Baalb ek Château Barka 7 ha 5 000 -- -- -- no Côteaux d’Héliopolis 250 ha 6 000 Cooperation Wineries size in the Bekaa region. Source: Zawaq 2012 Ixsir winery Chateau Ksara
- 10. The Wine • Quality wine, however, lacks identity. • If my wine is excellent, why is it important to know that it doesn’t fall within the current “politically correct” norms? - Serge Hochar, Chateau Musar. • Heavy, full bodied, and strong in alcohol wines. Some wines can have a 15% alcohol content, due to the hot weather in summer. • Bernard Burtschy, wine editor for the French newspaper Le figaro said: If we compare the Lebanese wine to the nearby Israeli wines, Lebanon is light years ahead. • 7,500,000 bottles produced annually. (UVL) Source: vivino.com
- 11. Laws and Regulations Divided into three main areas: 1) Production, sale and importation of wines. Defining constituents and nature of: - Lebanese wine - Lebanese concentrated must 2) Fermentation of : • dry • sparkling • sweet, semi-sweet wines • liqueurs and fortified wines 3) - Use and provenance of grapes - Cultivation methods for grapes used to make wine - Guidelines for the wine making process [4) Rules for labeling and origin designation] Source: Union Vinicole du Liban 2011 | info@lebanonwines.com
- 12. Vine plants(http://www.vignevin-sudouest.com/publications/voyage-etude/documents/synthese- liban.pdf) • Most of the grapes varieties and rootstocks are imported, the local ones are of lesser quality • Popular grape varieties – Carignan, Grenache, Merlot, CS, Obeidy, Marweh, chardonnay, muscat, viognier • Adaptation of the rootstock to the limestone soil: – 41B, R 110, R 140 Source: Greg Demarque Source: grussonmoulin.blogspot.com
- 13. Before farm gate – imports Country top 5 USD thousand Share in Lebanon’s imports (%) France 130 34,5 USA 126 33,4 Syrian of Arab Republic 45 11,9 Spain 38 10,1 Italy 35 9,3 Total 373 99,5 Presses, Crushers and machinery used in the manufacturer of wine/fruit juices Source: buchervaslin.com * Some Inox tanks are locally produced, but the quality is mediocre (ENITA), thus leaving the majority imported. (http://www.trademap.org/Country_SelProductCountry.aspx?nvpm=1|422||||8435|| |4|1|1|1|1||2|1|1)
- 14. Casks, barrels, vats of wood Before farm gate – Imported Country USD thousand Share in Lebanon’s imports (%) France 1 125 98,2 Hungary 17 1,5 Source: midwestsupplies.com (http://www.trademap.org/Country_SelProductCountry.aspx?nvpm=1|422| |||4416|||4|1|1|1|1||2|1|)
- 15. Before farm gate – imports Glass bottle, carboy and other container of glass Country top 5 U$S thousand Share in Lebanon’s imports (%) Egypt 8 787 31,1 Saudi Arabia 4 961 17,5 Syrian Arab Republic 3 456 12,2 Kuwait 3 144 11,1 Italy 2 833 10 Total 23 181 81,9 Source: wikipedia (http://www.trademap.org/Country_SelProductCountry.aspx?nvpm=1 |422||||7010|||4|1|1|1|1||2||)
- 16. Stoppers including corks and screw caps (WINE INDUSTRY IN THE BEKAA VALLEY, LEBANON FOOD-PROCESSING INDUSTRY AS A BASIS FOR COMMUNITY DYNAMICS AND LOCAL SOCIO- ECONOMIC DEVELOPMENT Country USD thousands Share in Lebanon’s imports (%) Portugal 1 453 93 France 66 4,2 Spain 41 2,6 China 1 0,1 Denmark 1 0,1 Total 1 562 100 Source: viezine.com European Scientific Journal June 2014 /SPECIAL/ edition vol.2 ISSN: 1857 – 7881)
- 17. • Hubert de Bouard (Château Angelus/Ixsir) • James Palgé (Château Ksara) • Gabriel Ribéro (Château Sociando Mallet then Ixsir) • Serge Hochard (Château Musar) • Fabrice Guiberteau (Kefraya) Source: sudouest.fr And Enologists… Source: winetimeshk.com
- 18. Wine of fresh grapes (http://www.trademap.org/Country_SelProductCountry.aspx?nvpm=1|422| |||2204|||4|1|1|1|1||2|1|1) Country USD thousand Share in Lebanon’s imports Imported quantity (tons) Imported growth in value between 2009-2013 (% p.a.) France 10 593 87,6% 778t 2% Italy 899 7,4% 129t 14% Spain 309 2,6% 111t 5% Chile 58 0,5% 13t 24% Total 11 859 98,1% Source: Gregory Demarque
- 19. EXPORT MARKETS
- 20. EXPORT MARKETS Export Turnover: $16,6 million (2014) In 46 countries Growth rate/2013 : +15% 2,2 million bottles Main actors: Ksara, Château Musar, Kefraya Trend and actors… Source: Blominvest Bank; www.trademap.org www.economy.gov.lb All Lebanese wine producers are doing an individual effort to sell their wines (Khachan)
- 21. EXPORT MARKETS Dynamic markets… www.trademap.org UK: n°1 price/btl Top 5 markets: almost 2/3 of the Export Turnover Exports in France are dominated with « entry level » wines, whereas, wines exported to the UK are of higher quality (ENITA,2003) France: n°1 volume
- 22. EXPORT MARKETS … and perspectives $7.39/btl (2012) + 60% since 2009 EXPORT MARKETS … and perspectives Source: Blominvest Bank
- 23. Local market- statistics • Consumption: 2.7 bottle/capita vs. 1.5 bottle 10 years ago. (Khachan) • Half the population is Muslim • Tremendous growth over the past decade • Taxes: Excise tax 200LL (0,10€ per bottle), duty tax 15% of value/liter (Lebanese Customs) • Shipping cost is about 15%. Margin should be at least 50% (for expensive bottles-grand cru) and Up to 100% (for cheap wines- cost 1 to 3euros) (Khachan) Taxes % AOC Dry wine 35% VDF-IGP 53% Champagne 23%
- 24. Local market • Hillebrand has operations in Lebanon • Export sales through diaspora (as consumers) • Oenotourism: impact of Syria on tourism in Lebanon (75000 tourists -> 25000 in Ksara) – Club grappe still offers tours – Vinifest will take place in Oct 15 • In the local market there is a monopole executed by 5 giant companies for distribution like Fattal, Massoud, Dima Food, Vincenti, Abed El Nour and diageo. (Khachan) Vinifestlebanon.com Clubgrappe.com
- 25. Point Of Sale • Retail: Carrefour, Spinneys, Le charcutier Aoun, Monoprix, TSC. • Wine Cellars: Enoteca la maison du vin, Vintage, Aziz, La cigale, Nicolas, Burgundy, les caves de Taillevent, Le comptoir, La cave de Joel robuchon, la maison du sommelier, vineyards. • Wine makers shops (direct sales): Domaine des tourelles, Chateau Musar, Adyar • HORECAs: “The gathering” for example, has a wide selection of wines and organizes wine tasting events such as: Chateau du Tertre, Chateau Giscours, Chateau Talbot. • Wine bars: CRU, Le merlot, V comme vin. • Centralized in Beirut • Many wine tasting events (Les mercredis d’Enoteca, Nuit blanche des tourelles, wine tasting with honor guests: Chateau Palmer at Vintage…) • In a typical wine cellar you will find approximately: – 70% French wines – 15 % European and new world wines – 10% Lebanese wines – 5% Other alcohol and spirits Enoteca.com.lbSource: Zawaq
- 26. Consumer trends • Previously, only Arak (an Aniseed spirit) and whiskey was consumed. • Now, to drink some wine became the new trend. • Lack of wine culture and knowledge • Seasonable consumer : • rosé in summer near the pool • red wine in winter near the chimney • Search for the cheapest wine but this tendency changed: • Lebanese spend more and more for good quality wines • They drink wine out and discover new tastes and regions telegraph.co.uk Source: Carlos Khachan
- 27. Lebanon’s SWOT Analysis Strengths Cheap labor Favorable climate Quality wine Diversified soil, with a dominance of Limestone which is rare in other areas of the planet Competition and consumption in growth Improvements in technical issues and modernization Weaknesses Political instability No terroir knowledge No collective spirit Lack of identity Known under the form of certain brands and not as Lebanese wine Opportunities Growing market (+15% export) Many areas have vine growing potential Foreign investments: Carlos Ghosn Rich in history and culture: touristic and marketing elements Threats Islamist threat Inputs costs No collective work Lebanese Wine Chain
- 28. 1 Million euros question… Where to invest??
- 29. Invest in a glass factory… … and be the leader from the first year! #100patates 1, 000, 000 €
- 30. Very cheap process Raw material = wealth of Lebanon! Almost free! YIELD OF 95% 1T of melted glass= 950kg of bottle Sand and Recycled Bottles
- 31. Take avantage of the market Consumption of 70 million bottles 95% of import A 21 million € turnover market www.lorientlejour.com, 16/12/2013 www.trademap.org
- 32. 40% 40% 10% 10% Production line Raw material Marketing Labor Investment of the century Production of 50 million bottles/year 0,35€/bottle 17,5 million € turnover Versus 21 million € spent on imports Source: Etude de l’implantation d’une verrerie au Sénégal. A.Elhadjily and al., 1995.
- 33. 40% 40% 10% 10% Production line Raw material Marketing Labor The investment Produce 50 million bottles/year 0,35€/bottle 17,5 million € turnover Against 21 million € on the import market
- 34. BE THE WOLF OF BEIRUT!
- 35. References • Books and journals: – Zawaq, guide des vins du Liban, Muriel Rozelier, Edition Tamyras, 2012. – Le commerce du levant, Numéro 5623, L’embellie du vignoble libanais, 2011. – La filière viticole au Liban : analyse et propositions pour une évolution, Ministères de l’Agriculture et de la Pêche, Etude réalisée par l’ENITA de Bordeaux sous la direction de Jean-Philippe ROBY, 2003. – Baseline Study for Table Grapes and Potatoes in Lebanon, Mohamad Abou Zeid National Consultant, 2005. – The many faces of the Lebanese wine industry, Ministry of economy and trade, MOET newsletter, Sept. 2007, Lebanon. – Le paysage viticole de la Bekaa, JP Bel, Paris, 2009. – Antoun, L. B. (2014). WINE INDUSTRY IN THE BEKAA VALLEY, LEBANON. European Scientific Journal. – Wehbe, La protection juridique des indications géographiques au Liban. Retrieved 2014, from: http://www.economy.gov.lb • Interviews: – Dr. Carlos Khachan, Sommelier and founder of club Grappe and la maison du sommelier in Beirut. By Joseph Moukarzel. – Hubert de Bouärd : "Le Liban peut devenir une très grande région vinicole« 12-12-2011 | par Muriel Rozelier | source: Le commerce du Levant. – Stéphane Derenoncourt : faire connaître les vins du Liban comme un produit de qualité exige de révéler son terroir, 12-08-2011 | par M.R. – Karen Matta and Wael Bou Jaoude, owners of CRU, a wine bar in Beirut, by Alex Taylor, The daily star. • Websites: – www.lebanonwines.com – www.customs.gov.lb/customs – www.trademap.org
- 36. Thank you