Powered by Hospitality News Middle East and funded by the USAID Lebanon Enterprise development (LED) project, Hospitality News Talks held its 10th virtual roundtable on April 15 — “Made in Lebanon: new opportunities for local food distributors, producers and farmers.” The online session, one of 12 such talks moderated by Hodema consulting services, invited business owners, distributors, entrepreneurs and local producers to share their knowledge and look at how to turn the recent crises in Lebanon into opportunities.
The panel included: Roy Harb, managing partner of Ayadina; Nicolas Gholam, cofounder of Mawsam and Karya; Jeanine Ghosn, managing director of Gabriel Bocti; Ahmad Makki, head of FMCG at Khalil Fattal & Fils; Anthony Massoud, CEO of Ets. Antoine Massoud,; Soumaya Merhi, general manager of TAQA bakery; and Samer Tutunji, owner of Eshmoon. Nada Alameddine, partner at Hodema Consulting Services, moderated the session.
Ghosn explained how Lebanese brands are chosen to join the Gabriel Bocti portfolio. “Any brand is welcome onboard but here needs to be a ‘fit.’ Our values should be aligned with the product must add value. For example, La Tourba is full of passion and Bites of Delight focuses on health and wellbeing.”
She added that a bond is created between the producer and the distributor, and the latter acts as a vehicle to push the brand and help it grow.
Ghosn also mentioned that Gabriel Bocti established e-commerce platforms (livgood.com and vintagewinespirits) to extend its offering online and to capture the overseas markets.
Gholam talked about his experiences with mainly micro producers and small operators who aren’t interested in the conventional markets and selling points, such as supermarkets. “We work with those who are looking to sell their goods in specialty shops, at farmers’ markets and similar places. They want the niche approach without having to price at a niche rate.
He said that the main challenge is getting producers to understand the importance of investing in quality control. “We need to appreciate boundaries. Producers should seek help when they need it and know that they cannot do everything by themselves. This is especially true of small enterprises.”
Gholam concluded that a lot can be done and there are still many gaps that can be filled.
Harb said that his brand never had distributors because production was never enough, but they have since grown. “For the past two years, we have enlarged our facilities and starting to produce more. Although we have not introduced new items, we are selling more of our existing line.”
Harb stated that having a checklist from distributors to know what they are looking for in order to be part of their portfolios would help producers like him know what to focus on. He also mentioned that his firm is spending more money on social media to advertise. “In addition to our range of mouneh items, we are working on a program to provide customers with access to our facility, so they can see how we pick and prepare our goods. They will learn all about the process of making mouneh.”
Massoud said that his company acts as one part of the value chain and selects brands based on the value they add. He gave the example of TAQA, which was chosen because of the passion of Soumaya Merhi, TAQA’s founder. “We don’t own the brand, but we aim to amplify its value. The brand needs to do the groundwork, the research, fine-tune the product and the packaging.”
Massoud added that brands must be able to generate a minimum turnover of half a million dollars (old rate), although he is not sure that this is the threshold anymore. “Before the crisis, local brands contributed to 4 percent of our turnover. Since then we have added many other products. Last year, we closed at 10 percent, and we have a target of 30 percent. It was a strategy we purposefully put in place to make us less exposed to currency devaluation and losses associated with imports.” He admitted that the dollar rate is the key issue and policymakers need to work harder.
In terms of the company’s own production, Massoud said that the goal is to quadruple the production of Biomass, its organic offering. “Our aim is to produce enough to meet local demand and supply export markets.”
Merhi spoke about how important it is for producers to abide by international health and packaging standards if they intend to export. “You can forget competing abroad unless you have the right certifications and the packaging of your product is up to scratch.”
She talked about her own experiences with TAQA and shared her strategy. “I have been very conservative when it comes to diversification. It is easier to absorb shocks when you have a narrower product range.” She added that she considers the next two years as her “runway” and will take full advantage of them. “My aim is to have 50 percent of my ingredients locally sourced. I won’t dry up my team before having an export market, and I won’t diversify before having that market.”
In the medium to long term, Merhi said that she is looking at integrating single-use plastics and offsetting the company’s carbon footprint by 2022. “These acts align with the mission of the brand: using business as a force for good.”
Tutunji said that his company has had to forfeit profits to stay in the local market. “There is a sense of obligation, and we want to remain loyal to our customers. It is a moral decision for us to remain in Lebanon and suffer losses. Export is much more profitable.”
Tutunji added that it is the duty of policymakers to protect the local economy and Lebanese producers. “We were surprised by the fact that local ingredients witnessed price increases. This free market needs to be regulated.”
The panelists agreed that Lebanon has not reached its full potential when it comes to food and beverage. The country can produce much more than it has been producing in the past, even if raw materials are not always available, but the government must help local industry thrive by fixing the exchange rate and offering incentives.
The webinar can be viewed in full here.
The 11th webinar, “Rethinking the future of Lebanese cuisine,” will take place on April 22. Click here to register.
To access the full program of Hospitality News Talks webinars, click here.