Despite challenging economic conditions and poor harvests, sales of European olive oil continue to rise with the increasing popularity of private label products.
Despite facing significant challenges over the past few years regarding production and product fraud (and more recently the economic fallout from Britain departing the European Union), olive oil sales figures across Europe are still on the rise.
According to research by analytics firm IRI, these figures can be attributed to sales of private label olive oil brands – as well as general price increases across the board.
Private label trade has contributed significantly to the €6.9 million ($7.49 million) increase in olive oil sales in Western Europe over the past twelve months.
Private label olive oil is any olive oil that has been manufactured by a third party and then sold under a retailer’s brand name, and private label olive oil sales (and discount channel brands) have risen in prominence across the major European supermarkets and hypermarkets in Spain, Italy, Netherlands, Germany, UK, Greece and France.
IRI estimated that the UK experienced a 5 percent increase in demand and volume sales, while Germany saw a demand increase of 10.8 percent. A notable exception occurred in Greece, where retailer Marinopoulos filed for bankruptcy, pulling its popular private label range off the market, forcing consumers to seek alternative brands.
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Consumer shopping data has demonstrated in the past that when the cost of raw materials for certain staple products increases, shoppers will choose the best price option.
The increase in popularity of private label items comes after last year’s findings by the same organization that private label product sales in Europe were stagnant or declining across the board.
But the recent resurgence of private label brands could indicate a change in the landscape, and IRI predicts that private label brands will retain their newfound competitive edge through differentiation on qualities other than pricing, through product portfolio extensions and additional promotional activities.
While the growth in private label has led to greater overall sales, price increases are also responsible. Poor weather conditions over the past few harvests have created problems for Europe’s biggest olive producers, decreasing yields and increasing the demand for what little there is to go around. Spain recently experienced its worst olive harvest in two decades, while Italy has had to cull over a million olive trees due to the deadly Xylella fastidiosa bacterial outbreaks.