`Experts Share Key Trends in Olive Oil Retail - Olive Oil Times

Experts Share Key Trends in Olive Oil Retail

Nov. 7, 2012
Julie Butler

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Consumer insights in diverse olive oil mar­kets were shared by trade experts at the Terra Creta inter­na­tional olive oil con­fer­ence held in Crete last month.

From the United States to Brazil and Europe, a con­sis­tent mes­sage was that qual­ity is cru­cial, even where con­sumers have yet to real­ize it.

Global overview: six key trends

Liz Tagami, pres­i­dent of Tagami International, spoke of six major trends, the first two in the United States

She said one is increas­ing out­rage over olive oil fraud and demand for truth-in-label­ing. The sec­ond is the U.S. industry’s reac­tion with new tests, such as DAGs and PPPs, and qual­ity stan­dards, as seen by the recent activ­ity with the pro­posed U.S. mar­ket­ing order.

Two big mar­ket­ing trends are trace­abil­ity and econ­omy. Demand for the for­mer is shown by a more than three­fold increase this decade in the num­ber of farm­ers’ mar­kets – where con­sumers can look pro­duc­ers in the eye . On econ­omy, Tagami said con­sumers are favor­ing larger pack­age sizes. We’re see­ing a lot of 1 liter bot­tles on pro­mo­tion, and bag-in-box olive oils, for exam­ple, can bring a 30 per­cent sav­ings.”

With olive oil con­sump­tion in the U.S. set to more than dou­ble by 2020, that’s going to be a lot more lucra­tive than going to some small coun­tries and get­ting them inter­ested at all” she said. But half that growth will be dri­ven by those under thirty today.

Liz Tagami

These mil­len­ni­als’ are the first of two super trends and they’re big brand adverse. We’ve got three years to work out how to appeal to them.”

Then there’s the explod­ing olive oil mar­kets of Asia. The mar­ket in China has grown 70 per­cent a year for the last decade, imports into India are accel­er­at­ing, and Japan — where con­sumers are extremely brand loyal and more likely to try olive oil neat than on bread — is already a top global importer, Tagami said.

Sustainability sells

Praful Mehta, pres­i­dent of the U.S.-based Unity Brands Group, stressed there are thou­sands of olive oils sold in the U.S. so pro­duc­ers must have a point of dif­fer­en­ti­a­tion.

It’s not about hav­ing a world qual­ity olive oil, it is about how you mar­ket and sell it.”

He told of fore­casts that in three years the most influ­en­tial prod­uct claims today — all-nat­ural’, local’ and organic’ — will be replaced by eth­i­cal’, sus­tain­able’ and eco-friendly.’

And, he said, CESR — Corporate Environmental and Social Responsibility — is a rapidly emerg­ing mar­ket phe­nom­e­non.

Praful Mehta

In the U.S., taste is the main rea­son peo­ple buy, fol­lowed by rec­om­men­da­tion from fam­ily or friends, impulse, then qual­ity. Doing demos with the right prod­uct is prob­a­bly the best bet a com­pany can make, he said.

U.S.: oppor­tu­ni­ties in spe­cialty mar­ket and cross mer­chan­dis­ing

John Gibson, pres­i­dent of U.S.-based Minoan Imports, talked about chal­lenges includ­ing the stigma link­ing fats to bad health; con­sumer con­fu­sion due to mis­lead­ing terms such as pure’, extra’ light’ and clas­sic’; and price dis­tor­tion from adul­ter­ated oils.

The mar­ket is so com­pli­cated because fake prod­ucts are com­pet­ing at a frac­tion of the cost, he said. It’s not enough to put a qual­ity prod­uct on the shelf and expect it to sell on price alone.”

Producers should inves­ti­gate the spe­cialty mar­ket, such as gift sets for hol­i­days, and cross mer­chan­dis­ing, he said. Research shows peo­ple are more likely to buy prod­ucts with a char­ity link, for instance.

Brazil: con­sumers clue­ing up on qual­ity

Consumers in Brazil – world fifth in pop­u­la­tion and one of its top four olive oil mar­kets – have gen­er­ally been cost-con­scious, accord­ing to Tropical Brasil Import & Export CEO Apostolos Kalfas.

But as they travel more and gain in sophis­ti­ca­tion, their aware­ness of olive oil’s health ben­e­fits and the impor­tance of qual­ity is grow­ing, he said.

Olive oil imports into Brazil grew 20 per­cent to 65,000 tons in 2011 and are fore­cast to reach 100,000 tons by 2015. Portugal is the main sup­plier, fol­lowed by Spain, Italy and Greece.

Apostolos Kalfas

Speaking in his native Greek, Kalfas stressed the scale of the coun­try – we have cities the size of Greece” – and its chal­lenges, one of which is adul­ter­ation and has in the past seen soy, palm and even engine oil passed off as olive oil.

Belgium: need to teach con­sumers how to use olive oil

Belgium has an olive oil con­sump­tion rate of 1.7L per per­son and sales growth of 6.5 per­cent in value a year. About 6.5 mil­lion liters have been sold — the vast major­ity extra vir­gin — with a sales value of €33 mil­lion ($43m), for the year to date.

But Dirk Thoelen, buyer for SPAR/ALVO in Belgium, said a big effort was needed to show peo­ple how to use olive oil.

There should be more point of sale tast­ing and edu­ca­tion, such as cook­ing with olive oil’ classes in the com­mu­nity, and rec­om­mended uses printed on labels.

Belgians are start­ing to learn how to cook with olive oil, the next step is to use it on sal­ads.”

But the con­sumer doesn’t know which olive oil to buy.” Thus they look for the cheap­est price. One in five olive oils sold is on pro­mo­tion, he said.

Private label (store brand) prod­ucts account for nearly 71 per­cent of olive oil retail in Belgium, a mar­ket oth­er­wise dom­i­nated by Carapelli.

Awareness of its health ben­e­fits is stok­ing demand but it’s a mis­take to think many peo­ple know much about olive oil, Thoelen said.

People talk about acid­ity and polyphe­nols and maybe in cer­tain mar­kets it’s famil­iar but I don’t know what they mean, let alone my friends.”

Germany: oppor­tu­ni­ties for slow food

Joachim Schalinski, edi­tor of the retail news­pa­per Lebensmittel Zeitung, said Germans also chase the low­est price and tend to buy prod­ucts on pro­mo­tion.

There’s the high vol­ume end of the mar­ket, where the low­est price is the aim, not pre­mium qual­ity, but the big oppor­tu­nity for Greek olive oil pro­duc­ers is at the high end, where they have an unri­valed edge.

Joachim Schalinski

They should high­light that, unlike mass pro­duc­ers, they largely don’t use syn­thetic fer­til­iz­ers and pes­ti­cides, and they offer both bet­ter qual­ity and tra­di­tional Greek pro­duce.

There’s inter­est in the slow way” he said.

Finland: rape­seed dom­i­nates but olive oil’s mak­ing inroads

With a 75 per­cent share, rape­seed oil dom­i­nates the veg­etable oils mar­ket in Finland , where there’s been a three-year pro­mo­tional cam­paign with the tag Rapeseed oil — too good to be true?”

Mirja Tyynysniemi, man­ag­ing direc­tor of Findland’s Miraz Trading Oy, said rape­seed oil’s omega‑6:3 ratio is empha­sized in mar­ket­ing and Finnish con­sumers assume it’s the bet­ter choice. She tells them olive oil has been around much longer and is tried and tested on humans.

Interest in olive oil is grow­ing in Finland, how­ever, as peo­ple travel more, and with the pop­u­lar­ity of cook­ing shows and mag­a­zines, and of fine cook­ing on week­ends. Produce that is of cer­ti­fied ori­gin, organic or local is also val­ued, she said.

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