Israel's Winemaking Revolution

International consumers used to shun Israeli wines, but Golan Heights Winery managed to create a market for world-class wines—and retool an industry

by Stacy Perman

According to the Israel Export & International Cooperation Institute, Israeli wine exports hit $21 million in 2007, up 42% from 2006 Stacy Perman

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Golan Heights Winery

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The Golan Heights Winery vineyards climb from the Sea of Galilee to snow-capped Mount Hermon near Israel's border with Lebanon and Syria. A picturesque region of rolling hills, waterfalls, and gorges, the Golan Heights is perhaps best known as the contentious area Israel captured from Syria during the Six-Day War in 1967—territory still claimed by Syria today.

However, the Golan Heights Winery has added an unexpected business significance to this 460-square-mile rocky plateau. Established in 1983, the winery is credited with remaking the Israeli wine industry and slowly transforming Israel's reputation as a maker of unexciting, syrupy kosher brands to a producer of world-class, award-winning wines that appeal to sophisticated international consumers.

The state-of-the-art winery, located in the village of Katzrin, is owned by four kibbutzim (collective farms) and four moshavim (cooperative farms) that also maintain its vineyards. A professional management board of directors runs the winery. Its three labels, Yarden, Gamla, and Golan, produce some 17 different varieties and are the most widely exported Israeli wines in the world. In 2007 the winery's 1,600 acres of vineyards produced 430,000 cases, up from 420,000 in 2006, and generated sales of $30 million. Today, says the head winemaker, California-born Victor Schoenfeld, "We have wine shortages. Our demand outstrips our supply."

The success of Golan Heights Winery helped open the floodgates for what is known in Israel as the "quality revolution" in Israeli wine, creating a new market and brand identity for the country's vintages. That helped spur the creation of new wineries as well as to push existing ones to improve the quality of their products. Michal Neeman, director of the Israel Export & International Cooperation Institute's food and beverage division, says of the Golan Heights operation: "Their role was crucial. Everyone agrees that they were the first winery to produce excellent wine. Then came the boutique wineries, then the medium-sized, and then the large ones. There were a lot of other factors as well, but when you pinpoint the revolution, it started at Golan Heights."

Rising Exports

According to the 2008 edition of Rogov's Guide to Israel Wines, written by Ha'aretz newspaper wine critic Daniel Rogov, the number of wineries in Israel has grown dramatically, particularly since 2001. In a country about the size of New Jersey, there are now about 130 wineries. Sales of Israeli wines reached about $140 million in 2007. According to the Israel Export Institute, wine exports hit $21 million in 2007, up 42% from 2006.

Winemaking in Israel dates back to biblical times. However, following the rise of Islam in the 7th century, it all but ceased when Muslim leaders banned alcohol. Serious winemaking resumed in 1882, when French philanthropist Baron Edmond de Rothschild began underwriting agricultural settlements in the region with an emphasis on wine growing. In 1906, a collective of grape growers set up what would become the wine cooperative Carmel, for decades the country's dominant player. The reputation of Israeli wine continued to be linked to kosher vintages mostly used for religious observances.

The turning point came in 1972 when Cornelius Ough, a renowned oenologist from the University of California at Davis, visited and surveyed Israel. He concluded that the Golan Heights was an obvious place to produce high-quality wine because of its volcanic soil, cool climate, altitudes, and water available through drip irrigation systems. Four years later, the area's first vineyards were planted near El Rom, the site of one of the largest tank battles between Israel and Syria during the 1973 Yom Kippur War.