Spanish Producers, Policy Makers Explore Strategies for Success in Chinese Market

Summary

Despite poor har­vests in the Mediterranean basin, olive oil remains in high demand in China, with con­sump­tion increas­ing sig­nif­i­cantly over the years. Producers are work­ing to pro­mote the health ben­e­fits and qual­ity of Spanish olive oil in the Chinese mar­ket, empha­siz­ing the need for aware­ness cam­paigns and inte­gra­tion into local cui­sine to fur­ther develop a taste for olive oil in China. Concerns about food safety and the poten­tial impact of trade ten­sions between Europe and China on agri­cul­tural prod­ucts are also key fac­tors influ­enc­ing the olive oil mar­ket in China.

Even as con­sec­u­tive years of poor har­vests in the Mediterranean basin have led to a dra­matic decrease in pro­duc­tion, olive oil remains highly sought after in China, par­tic­u­larly from Spain.

Changing eat­ing habits among young con­sumers in large cities who have trav­eled abroad and have been exposed to the Mediterranean diet are partly boost­ing olive oil pur­chases.

According to International Olive Council data, Chinese olive oil con­sump­tion has increased from 12,000 tons in the 2008/09 crop year to 42,500 tons in 2022/23.

Still, soy­bean, sun­flower, peanut, and rape­seed oils remain the most com­mon cook­ing oils in China, read­ily avail­able at an afford­able price and his­tor­i­cally used to pre­pare local dishes.

A recent guide pub­lished by Prodeca, a pub­lic entity that pro­motes the Catalan agri-food sec­tor inter­na­tion­ally, exam­ined how extra vir­gin olive oil pro­duc­ers could be more com­pet­i­tive in China’s grow­ing mar­ket.

Among the pro­duc­ers with some expe­ri­ence in the world’s sec­ond-largest econ­omy is ActelGrup, a Lleida-based coop­er­a­tive that pro­duces extra vir­gin olive oil from the endemic Arbequina vari­ety.

The Catalan coop­er­a­tive sells its extra vir­gin olive oil under the Germanor brand in national super­mar­kets and Romanico for export, but ​“sales of extra vir­gin olive oil to China are, to date, occa­sional and small in vol­ume,” said Fernando Ortega, the cooperative’s sus­tain­abil­ity direc­tor in charge of extra vir­gin olive oil and fruit.

While Prodeca empha­sized the impor­tance of under­stand­ing the Chinese cook­ing oil mar­ket and devel­op­ing olive oil con­sumer pro­files, the guide added that aware­ness cam­paigns should be directed at inte­grat­ing extra vir­gin olive oil into Chinese cui­sine, pro­vid­ing a healthy improve­ment to tra­di­tional eat­ing habits.

However, Ortega lamented that ​“there is still a lack of stud­ies focus­ing on the suit­abil­ity of inte­grat­ing olive oil tak­ing into account local culi­nary cus­toms, as the use of olive oil is closely related to the local diet and cul­ture.”

A taste for olive oil thus needs to be devel­oped fur­ther in China. Prodeca sug­gested that olive oil could be inte­grated into Chinese eat­ing habits as a starter or salad dress­ing if the fla­vor and aroma of a high-qual­ity extra vir­gin olive oil are to be appre­ci­ated.

Prodeca pointed out that many Chinese prepa­ra­tions involve fry­ing food, and olive oil main­tains most of its nutri­tional prop­er­ties under high-heat con­di­tions.

“Although the taste of olive oil is most appre­ci­ated when cold, it is char­ac­ter­ized by an excel­lent resis­tance to repeated fry­ing and can reach a high smoke point,” Ortega said.

One of Prodeca’s rec­om­men­da­tions is for pro­duc­ers and exporters to pro­mote the health ben­e­fits of olive oil, espe­cially in the con­text of food con­t­a­m­i­na­tion scan­dals.

Increasing con­cerns about health in China are expected to sig­nif­i­cantly impact con­sumer behav­ior, with many seek­ing a guar­an­tee of higher food safety stan­dards from for­eign olive oil brands.

In July, a sig­nif­i­cant food scan­dal involv­ing trucks trans­port­ing cook­ing oils sparked pub­lic out­rage in China.

Operators were doing dou­ble duty to cut costs, and the trucks were not cleaned between deliv­er­ies, cross-con­t­a­m­i­nat­ing the edi­ble oil with gaso­line and other dan­ger­ous chem­i­cals.

This case was rem­i­nis­cent of the 2008 scan­dal involv­ing milk and baby for­mula adul­ter­ated with melamine, which is toxic in high doses.

“China is a very attrac­tive coun­try for the Spanish olive oil mar­ket because of its sales poten­tial,” and ​“given the amount of food fraud cases, there is food inse­cu­rity,” Ortega said.

“For China, the trend is def­i­nitely toward an increase in the demand for higher qual­ity extra vir­gin olive oil,” he added. ​“What is most impor­tant in China at the moment is men­tion­ing the coun­try of ori­gin.”

The Prodeca guide also rec­om­mends that pro­duc­ers empha­size geo­graph­i­cal qual­ity cer­ti­fi­ca­tions, such as Protected Designation of Origin (PDO) and Protected Geographical Indication (PGI), which the pub­lic entity said could increase will­ing­ness to pay.

“What is lack­ing is a deeper under­stand­ing of qual­ity extra vir­gin olive oil,” Ortega said. ​“The feel­ing is that we are 15 years behind the wine sec­tor. Spanish wine regions, includ­ing Rioja and Ribera, are well-known world­wide, includ­ing China.”

“The European PDO cer­ti­fy­ing sys­tem for olive oil does not have the same recog­ni­tion and, for the con­sumer, it does not seem use­ful as a dis­tinc­tive ele­ment at the time of pur­chase, as this des­ig­na­tion does not clearly define a brand,” he added.

Ortega believes devel­op­ing an extra vir­gin olive oil-spe­cific PDO pro­mo­tion ​“would require col­lab­o­ra­tion between the admin­is­tra­tion and the pro­duc­ing com­pa­nies, in projects with well-defined objec­tives.”

One strat­egy that has helped pro­mote China’s emerg­ing olive oil con­sump­tion cul­ture was the sen­sory analy­sis courses hosted by the IOC in many Chinese cities in 2019.

“Olive oil tast­ing events and fur­ther pro­mo­tion in the United States have yielded good results,” Ortega added. ​“Recent news report that, for the first time, the vol­ume of Spanish olive oil con­sump­tion in the U.S. exceeds that of Italian olive oil.”

He said ActelGrup is work­ing to pro­mote olive oil at inter­na­tional food fairs, espe­cially in China.

“Participation in food fairs and the orga­ni­za­tion of inter­na­tional tast­ings are very impor­tant,” Ortega said. The cooperative’s organic Romanico brand was awarded at a Chinese olive oil com­pe­ti­tion in 2022.

Ortega empha­sized that the Romanico brand is always sold already bot­tled to China and never in bulk. The Prodeca guide fur­ther sug­gested that bot­tle sizes and prices can be adjusted to make the prod­uct more acces­si­ble to price-sen­si­tive Chinese con­sumers.

“Concerning bot­tle size, ActelGrup has so far not sold extra vir­gin olive oil in smaller for­mats than the usual five-liter, one-liter and 750-mil­li­liter, sim­ply because Chinese importers have not asked for these types of for­mats,” Ortega said.

Despite a grow­ing domes­tic indus­try, Chinese con­sumers con­tinue to pre­fer for­eign brands. Still, pro­duc­ers are con­cerned that recent trade ten­sions between Europe and China could result in retal­i­a­tion against agri­cul­tural prod­ucts, includ­ing olive oil.

“The cur­rent global geopo­lit­i­cal cli­mate has height­ened the risk that food prod­ucts could be used as a nego­ti­at­ing weapon fol­low­ing the impo­si­tion of tar­iffs by the European Union on prod­ucts from China, such as elec­tric vehi­cles,” Ortega warned.

“In any case, the increase in pur­chas­ing power in China is a real­ity and an oppor­tu­nity for the Spanish olive oil sec­tor to con­tinue pro­mot­ing an exquis­ite and unique prod­uct,” he con­cluded.

• ABC
• Environmental Health Perspectives