Extra Virgin Olive Oil Sales in Spain Fell by 40 Percent in 2023

Summary

Inflation in Spain has led to sig­nif­i­cant increases in the cost of liv­ing, par­tic­u­larly impact­ing the olive oil sec­tor with sub­stan­tial price hikes and a drop in demand for olive oils, while con­sumers are actively seek­ing pro­mo­tions and com­par­ing prices to cope with the ris­ing costs. Despite a slight increase in over­all sales, the Spanish con­sumer goods mar­ket saw a slow­down in sales growth, par­tic­u­larly in sec­tors like food, with ris­ing prices affect­ing var­i­ous prod­ucts dif­fer­ently, lead­ing to changes in con­sumer pref­er­ences and pur­chas­ing behav­ior.

Inflation, dri­ven pri­mar­ily by increased man­u­fac­tur­ing costs and poor har­vests, has sig­nif­i­cantly impacted the cost of liv­ing and the spend­ing behav­ior of Spanish res­i­dents.

Despite con­sumers being in sav­ings mode, actively com­par­ing prices and seek­ing pro­mo­tions, the aver­age annual house­hold shop­ping bas­ket has surged by €800 over the past year, accord­ing to Nielsen IQ’s study.

The olive oil sec­tor, espe­cially extra vir­gin olive oil, has wit­nessed sub­stan­tial price hikes, with increases of 79 per­cent, 69 per­cent and 60 per­cent for extra vir­gin, vir­gin and non-vir­gin olive oil, respec­tively.

Consequently, demand for these oils dropped sig­nif­i­cantly: 41 per­cent for extra vir­gin olive oil, 14 per­cent for olive oil and 11 per­cent for vir­gin olive oil. These fig­ures are esti­mated to con­sti­tute the most sig­nif­i­cant sus­tained drop in demand since the tur­moil of the Spanish Civil War in the 1930s.

Sales shifted to alter­na­tives such as sun­flower oil, which expe­ri­enced a 16 per­cent demand increase, cou­pled with a 36 per­cent price decrease com­pared to November 2022.

However, olive pomace oil demand soared by 70 per­cent despite an 18 per­cent price hike, sug­gest­ing a strong reluc­tance to aban­don such an iconic fam­ily of oils alto­gether.

In November 2023, Spanish con­sumer goods sales rose by eight per­cent, and aver­age prices increased by six per­cent, mark­ing the low­est vari­a­tions of the year, as per Nielsen IQ data.

Despite over­all pos­i­tive growth of slightly more than one per­cent, the three main sec­tors saw a slow­down in sales growth, with food lead­ing in expen­di­ture, expe­ri­enc­ing an eight per­cent increase in sales, slightly lower than the pre­vi­ous dou­ble-digit growth.

This was accom­pa­nied by a seven per­cent rise in aver­age prices and a mar­ginal one per­cent increase in vol­ume sales.

Javier Ferrer, res­i­dent of Valencia, said that his elderly mother finds the increased food cost par­tic­u­larly hard to bear.

“I worry for her health,” he said, ​“She sur­vived the Covid-19 [pan­demic], but she’s old and not very strong. Now her diet is poorer because every­thing is so expen­sive, and I can’t help much because I’m also now almost pen­ni­less.”

Such con­cerns were already wide­spread. In a major 2022 study, Save the Children warned that diet qual­ity in Spain was expe­ri­enc­ing an unprece­dented decline due in part to the com­plex effects of the Covid-19 pan­demic but pri­mar­ily because of socioe­co­nomic fac­tors, which have been exac­er­bated by the ram­pant infla­tion in 2022 and 2023.

Certain sec­tors that usu­ally see sharp increases in sales in the lead-up to the Christmas period, such as drug­stores, per­fumeries and bev­er­ages, reported only mod­er­ate sales value of seven per­cent each.

Demand data showed sim­i­lar pat­terns in these cat­e­gories, with a one per­cent increase in vol­ume sales for bev­er­ages, drug­store prod­ucts and per­fumery, with aver­age prices increas­ing by about six per­cent each.

Among the goods most affected by infla­tion in November, drug­store prod­ucts topped the list with a 23 per­cent increase, fol­lowed by oil at 23 per­cent, baby foods at 20 per­cent and olives and pick­les at 15 per­cent.

Products includ­ing grated cheese expe­ri­enced an eight per­cent price drop, fol­lowed by wash­ing acces­sories at seven per­cent and kitchen and toi­let paper at six per­cent.

Private brands grew by almost 11 per­cent in value by the end of November, sur­pass­ing the five per­cent increase for white-label brands. Volume sales increased by five per­cent for pri­vate brands but decreased by three per­cent for white-label brands.

Overall, the com­plex inter­play of ris­ing prices, chang­ing con­sumer pref­er­ences and eco­nomic chal­lenges paints a nuanced pic­ture of the Spanish con­sumer goods mar­ket dur­ing the final weeks of the year.

• La Razón