`Greek Olive Oil Producers Struggle in China

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Greek Olive Oil Producers Struggle in China

Mar. 20, 2014
Marissa Tejada

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Ste­lios Vyto­gian­nis of Foodrinco is deter­mined to make it in China.

Greece, one of the top olive oil pro­duc­ing coun­tries in the world, is look­ing east for new oppor­tu­ni­ties. Olive oil pro­duc­ers and dis­trib­u­tors are eye­ing China’s immense mar­ket. How­ever, they are find­ing that their qual­ity prod­ucts are not an easy sell. For sev­eral in the busi­ness, their recent efforts are prov­ing to be dis­ap­point­ing, yet they remain hope­ful.

The Poten­tial

Vas­silia Fra­gaki, the pres­i­dent of Coop­er­a­tiva Sitia, one of the largest olive oil coop­er­a­tives in Greece, said the poten­tial in China is allur­ing.

The sales poten­tial is great. So we made a deci­sion that we needed to build our efforts in the Chi­nese mar­ket. It has been very inter­est­ing for us so far,” said Fra­gaki.

Fra­gaki added that efforts over the past few years have involved sub­stan­tial prepa­ra­tion includ­ing every­thing from trans­la­tion, cre­at­ing a strate­gic mar­ket­ing plan to hir­ing Chi­nese rep­re­sen­ta­tives based in tar­get cities.

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Recently, Fra­gaki joined a mar­ket­ing trip orga­nized by the Greek olive oil con­fer­ence and exhi­bi­tion group, Eleo­tex­nia. In Novem­ber 2013, along with sev­eral other Greek pro­duc­ers, Coop­er­a­tiva Sitia’s team aimed to broaden con­tacts and present their olive oils at the Shang­hai Food Exhi­bi­tion. Fra­gaki said results have yet to be seen but the effort has been worth it so far.”

We’re begin­ning to unfold the secrets of the mar­ket. I feel at this point we can con­tinue to take small steps and by next year we can think about mov­ing on to big­ger steps.”

Chang­ing Plans

Nikos Mon­a­hoyios of Ergo­food Greece isn’t as hope­ful any longer. He attended sev­eral Chi­nese food exhi­bi­tions where he quickly learned that Greek par­tic­i­pa­tion and mar­ket­ing sup­port was low. He felt he found a great oppor­tu­nity to show­case his Greek brand and qual­ity Greek olive oils. How­ever, he admits he faced dis­ap­point­ment.

Nikos Mon­a­hoyios of Ergo­food Greece isn’t as hope­ful about the mar­ket in China for his Greek olive oils.

The Chi­nese may have a grow­ing upper class inter­ested in prod­ucts like ours but they can’t find the top qual­ity. Their mar­ket isn’t reli­able and they’re not trained enough yet to select authen­tic high qual­ity olive oil and wine prod­ucts.”

Mon­a­hoyios, who also exports Greek wines, said in China prod­ucts like Greek olive oils are pur­chased mostly to show off among friends and gain social sta­tus.”

In our opin­ion the Chi­nese con­sum­ing behav­ior isn’t mature enough. They want to fol­low the West­ern con­sum­ing cul­ture and habits but their only cri­te­rion in their choice is price and not qual­ity.”

He pointed out that recent research showed that most of the French wines sold in China are not actu­ally French but just have a French label. He believes the same can hap­pen with olive oil. Mon­a­hoyios said that one Chi­nese com­pany sug­gested that he even change the num­bers on acid­ity lev­els, even though, he said, they did­n’t know what the num­bers meant.

Of course we denied work­ing with them.”

Mean­while, at exhi­bi­tions, Mon­a­hoyios was thrilled that Chi­nese traders loved the taste and qual­ity of his olive oil.

They were say­ing that it was the best olive oil they tasted but when they were ask­ing about the price the first reac­tion was that it was too expen­sive.”

After his efforts, Mon­a­hoyios is giv­ing up.

I’m hon­estly so dis­ap­pointed from the Chi­nese mar­ket after all these neg­a­tive expe­ri­ences with the Chi­nese con­sum­ing behav­ior and per­cep­tion that I can say now that I am not aim­ing in this mar­ket any longer.”

Mon­a­hoyios will focus on the U.S. mar­ket instead.

Con­sumer per­cep­tion is more advanced,” he said. I can see now why there is a wide effort from sev­eral Greek com­pa­nies try­ing to pro­mote the Greek olive oil and its qual­ity, espe­cially over the past few years.”

Up and Down

Ste­lios Vyto­gian­nis of Foodrinco intro­duced his Greek extra vir­gin olive oils to the Chi­nese mar­ket two years ago. He had also hired a local Chi­nese sales and mar­ket­ing asso­ciate to pro­mote his prod­ucts.

The lan­guage, time dif­fer­ence and cul­ture all play a role,” said Vyto­gian­nis. There is room in China, of course, but it is dif­fi­cult to get access.” To describe his frus­tra­tion he com­pared his attempts in China to another Asian mar­ket.

In Korea, I was able to ship prod­ucts and cre­ate a good busi­ness rela­tion­ship quite eas­ily in less than two months. My expe­ri­ence in China has been an uphill bat­tle.”

Vyto­gian­nis said every­thing seemed grim when his Chi­nese asso­ciate stopped answer­ing his phone calls and emails. Their busi­ness rela­tion­ship came to an end. That blow to his invest­ment, he says, didn’t stop him.

It’s our third year try­ing and we’ve already invested so much so we must go on. We’ll find some­one new to help us in China. We are deter­mined to get some results.”


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