Lebanese winery Ixsir gears up for export drive

27 July, 2020

Lebanese wine producer Ixsir is ramping up its focus on exports after the domestic market was hit by a double whammy of hyperinflation and Covid-19.

Ixsir has more than 120 hectares under vine, spread across some of the most historic terroirs in Lebanon. Its wines have received several impressive scores from the likes of Wine Advocate, James Suckling and Wine Enthusiast, and now it hopes to boost sales in the UK, Europe, the US, Asia and other international markets.

Etienne Debbane, Hady Kahale and Gabriel Rivero founded Ixsir in 2007. Debanne is chief executive and Rivero is the winemaker, while Hubert de Bouard – co-owner and winemaker of the renowned Chateau Angelus in Saint-Émilion – acts as a consultant.

The Debanne-Saikali Group invested in Ixsir, and then Carlos Ghosn – the fugitive former Nissan-Renault boss who hit headlines around the world after his audacious escape from Tokyo to Beirut on December 30 – came on board in 2008.

We caught up with Debbane to learn more about Ixsir’s plans for the future.

The name of the winery derives from “Iksir”, the original Arabic word for elixir. What inspired you and your partners to set up Ixsir?

The vision behind Ixsir is to reveal the best terroirs of Lebanon, some forgotten long since. I am an agronomist. I did a degree at Reading University in the UK. Gabi is an oenologist. He studied in Spain and did 10 years in France, in the Medoc. He was the winemaker at one of the two largest wineries in Lebanon, Chateau Kefraya, for seven years. I was at one time the distributor of their star wine. We decided that we would like to make wine in Lebanon. The first concept was to go back to the original vineyards, because Lebanon was known for 5,000 years to make the best wines in the area. Typically wineries in Lebanon are all gathered on the Bekaa Valley, a plateau behind Mount Lebanon, at 900m altitude, so we thought we would grow grapes on the two slopes of Mount Lebanon, where the old grapes were grown. Our idea was to use the diversity of our country. There’s a diversity of religions and climates. It’s a very small country, but we have a sub-tropical climate on the coast, an alpine climate on the upper mountains – where our grapes are the highest in the northern hemisphere, 1,800m above sea level – and we have a continental climate on the plateaux behind the mountains, protected from the sea. In a very small country, maybe half the size of Sussex, and we have this diversity of climates and of soils. We have calcareous soils, clay soils and marl soils.

What is unique about the wines that Gabi makes?

Winemaking occurs in a winery located on the hills of Batroun where a 17th century traditional Lebanese house presides over a contemporary winery with sustainability at its core. Every wine of the eight wines we make has an identity of its own. They are all different original blends. We think that we put the diversity of Lebanon in every wine we make. I think we have a very interesting expression of every variety. For example, you have a palette of aromas of Syrah [to choose from when blending] that is not known elsewhere. It’s a new expression of a very well known variety. The same stands for Chardonnay and Cabernet. The challenge was to keep freshness and fruitiness in our wines. There is very little intervention, but a lot of work in the vineyards to have perfect maturity and pick every variety of its best. We have the luxury of a beautiful climate – enough rainfall in winter time to be stored in the soil and no rains in the summer, so we can pick every variety at maturity with no pressure of disease.

Do you make any single variety wines or is it all blends? Do you use any indigenous varieties?

We don’t make single vineyard wines. We are building data. If we think with time that one of the vineyards has an exceptional expression of a certain varietal, we might end up doing a high-grade varietal, but it really must something original and worth it. There are so many varietals in the world, and we have more to offer. It can make you think of a standardised product. Our attention is much more to produce something original. We produce one Obaideh [an indigenous variety]. We started thinking about what wines we could make in 1999. It took us nine years before we could make our first wine in 2008. Gabi does not think he could make an interesting enough wine from it alone. He blends it with Muscat, and the synergy between Obaideh and Muscat is very nice. Two wineries [in Lebanon] make a Merwah [another local grape variety]. We are testing it every year to see how best we can use it, but we don’t have the answer yet.

What is the current volume production of Ixsir?

Last year we produced in excess of 600,000 bottles. This year, the same or maybe a bit less, but our production is between 500,000 and 600,000. It’s at cruising speed, because we are still planting. We just finished planting a 15ha vineyard in the mountains. We should be at around 800,000 bottles per year. We are going to release a natural sweet wine this year, and we also produce arak. We are not standing still. We are very passionate and ambitious people.

How do you manage these vineyards spread across the country?

We use the services of about 80 families in the mountains. We grow our grapes in different plots and villages. We have six production sites. We offer these families [the opportunity] to stay in their homelands and look after our vineyards and live decently. Especially now, with the turmoil that Lebanon is living through, we have a devaluation of 50% of our currency, complete uncertainty and no visibility of the future, we manage somehow to pacify these families, because they have confidence in us, that we are going to look after them, and they are not going to be affected by the inflation. This really is a fantastic blessing for them and us. There is a lack of labour and a lot of problems with the virus, so we are very lucky to have these people on site, near the vineyards.

In October, there were riots in Lebanon and capital control was enforced. What challenges have you faced over the past year?

The business is very difficult in Lebanon. In other countries that have faced hyperinflation, like Turkey, Brazil and Russia, life becomes difficult and everything changes by the day. This virus has also changed the modus operandi of everything, and we have completely turned towards export. The local market, which consumes around 60% of domestic production, has been severely hit by three things: the devaluation of the money reducing the purchasing power of the consumer; the shutting down of the on-trade; by the confinement, whereby movement is very difficult. It has been a very difficult year. Lebanon has been on and off war for 40 years, but I think this is the toughest crisis we have ever been exposed to.

Do you think the domestic market will continue to shrink?

The domestic market will continue to decrease because of the economic crisis. We were selling our entry wine at shelf value of $12 a bottle. Today applying the same price, it only gives us $2 a bottle. If I want to raise the price to what it was, I have no consumer. Sometimes we conclude that we should sell some wine at a loss. We don’t know if things will get worse or better. If things get worse, we might be forced to stop selling in Lebanon. If things get better, it would have been a good idea to subsidise our selling price to maintain our presence in the market and encourage the consumer to keep drinking wine other than something else.

What is your export strategy?

We were already exporting to 35 countries, and we are looking more now into Asia. The main markets for us are the US and southeast Asia, and in Europe we are quite present everywhere. The country where I think we can most develop our sales is the UK. We are putting in a special effort in the UK. We have Enotria as an importer. We are trying to be more present in online sales. We are looking into the largest online platforms in Europe. It is rather easy [logistically] to export right now. We have a platform in the Netherlands, and we send big shipments there, and then distribute pallets around Europe. We may do the same in the United States.

How badly have you been affected by on-trade closures around the world?

The on-trade represented between 25% to 40% of our volume sales, depending on the country, but this has quickly been replaced by online deliveries. Consumers are home are drinking more wine, and many of our importers did not lose much of their turnover. This closing of the on-trade is a big hit for the industry, but wine sales are almost sustainable due to new segments of the market [opening up].

How easy is it to sell Lebanese wine into export markets?

Lebanon in general has a good name. We have a lot of entrepreneurs. We have 12 million Lebanese all over the world, and only 4 million left here. That tells you how open we are to the world. We have a good history. We are a Mediterranean country, and Mediterranean food and wines are becoming more popular all over the world. Our wines have a Mediterranean style. We come from a hot country, but our wines surprise, because they are not heavy. We are succeeding at maintaining freshness.

You also have strong environmental credentials?

Our winery is completely underground. It was named by CNN as one of the greenest buildings in the world, and won the international Architizer A+ Award as well as the Good Green Design award and the Green Mind MENA Award. Most of our grapes are organic. We use very little pesticides, and we use natural ones – sulphur, copper. We don’t have the pressure of disease, so we are very clean. Some of our wines are 100% organic. Some we use very little chemicals and fertilisers. We have very clean vineyards. We have awards for having a very green winery. We recycle all our waste liquid, we use gravity to transport it. We are underground, and we use very little energy. We generate our own electricity. We have replanted our environment with Mediterranean trees and plants and flowers. It’s a very striking site.

What role has Carlos Ghosn played in the development of the business?

Carlos is one of our founders. We are three groups that own the winery – our group, with Gabi and myself and my family; Carlos is another group; and we also have some bankers, who are friends of ours and have a share. When he still president and chairman of Nissan-Renault, being of Lebanese origin Carlos – who studied in Lebanon – wanted to promote something in Lebanon, and he thought wine was a very good product that we could produce, create value and export to the world. He was looking to invest, and he new about our project from the bankers. One day they asked me to meet with him and present the project, and he was very convinced by the concept. He invested with us and has been with us ever since. He is not active. He is on the board. We meet four times a year. He is an amazing guy, with a fantastic vision. Always good advice, with a global view of business conditions, segmentation of the market. He did well to take two companies from bankruptcy to what they became before he left. He was always more present in the background, but now we have monthly meetings. He is always very helpful and supportive, and he has always believed in us, and we are proud of what we have built with him.

How confident are you in the future of the business and the Lebanese wine industry?

We are still optimistic about the future. We are looking forward to travelling again now and presenting the wines in export markets.





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Nick Strangeway

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