A tasting event for Spanish olive oils. Photo courtesy of the Interprofessional Olive Oil Association

A new study from Spain’s Ministry of Industry, Commerce and Tourism (ICEX) has con­cluded there is a lot of poten­tial for olive oil in the Indian gourmet food mar­ket.

“We are [also] con­vinced that this is a mar­ket with enor­mous poten­tial,” Teresa Pérez, direc­tor of Spain’s Interprofessional Olive Oil Association, told Olive Oil Times. “You just have to review the evo­lu­tion of sales to check that the con­sump­tion of olive oils is evolv­ing very pos­i­tively in India.”

The cur­rent prob­lem (in India) is that the gov­ern­ment has raised tar­iffs by 40 per­cent and, log­i­cally, con­sump­tion has suf­fered a lot.- Rafael Pico Lapuente, direc­tor of Asoliva

The asso­ci­a­tion was not directly involved with the ICEX study, but works to pro­mote Spanish olive oil con­sump­tion around the world. ICEX did not respond to a request for com­ment on this story.

Olive oil cur­rently rep­re­sents 0.14 per­cent of the edi­ble oils sold in India and is mainly pur­chased in urban areas of the world’s sec­ond most pop­u­lous coun­try. However, sta­tis­tics from the country’s Ministry of Commerce show that olive oil imports have nearly quadru­pled in the past decade, grow­ing from 2,700 tons in 2009 to 9,300 tons in 2018.

“We assume that this is just the begin­ning,” Pérez said.

See more: Olive Oil Trade News

According to the ICEX report, a num­ber of fac­tors have come together to make demand for the prod­uct stronger. New healthy eat­ing trends among Indians have led to an increased recog­ni­tion of olive oil as a healthy alter­na­tive to other pop­u­lar cook­ing and veg­etable oils.

The rise of the country’s mid­dle class, espe­cially in urban areas, has also helped to fuel demand for gourmet foods and cook­ing prod­ucts. According to the report, 70 per­cent of India’s demand for olive oil is con­cen­trated around Delhi and Mumbai.

“We are talk­ing about a huge coun­try that cur­rently has a mid­dle class made up of some 300 mil­lion peo­ple,” Pérez said. “Consumers who, when they reach a cer­tain level of life, give increas­ing impor­tance to a healthy meal.”

She also attrib­uted India’s ris­ing demand for olive oil to travel, which has intro­duced many mid­dle-class Indian con­sumers to Mediterranean cui­sine and olive oil. Increasing lev­els of tourism was also cited by mar­ket ana­lysts in neigh­bor­ing China as one of the rea­sons the appetite for olive oil has grown among its mid­dle class.

Pérez and Rafael Pico Lapuente, the direc­tor of the Spanish Association of the Olive Oil Exporting Industry and Commerce (Asoliva), both agreed that Spain is espe­cially well poised to sup­ply this grow­ing mar­ket.

“Three of every four liters sold in India are olive oils from Spain,” Pérez said. “In total, last year we sold more than 7,000 tons in that immense coun­try. It is clear that we have a very solid posi­tion in that mar­ket.”

The data over­whelm­ingly sup­ports Pérez’s assess­ment. According to the Indian Ministry of Commerce, 76 per­cent of Indian olive oil imports came from Spain in 2018.

Spain also has more capac­ity to export to India’s emerg­ing mar­ket than other large olive oil pro­duc­ing coun­tries, accord­ing to Pico Lapuente. This is largely due to Spain’s increas­ing pro­duc­tion over pre­vi­ous cam­paigns cou­pled with poor har­vests in other large olive oil pro­duc­ing coun­tries.

“Spain is the undis­puted leader in all mar­kets,” Pico Lapuente told Olive Oil Times. “In the case of India, we are also lead­ers.”

However, ICEX warned that high prices will remain a hur­dle for olive oil pro­duc­ers export­ing to the region. The report found that the vast major­ity of Indians’ spend­ing habits are dic­tated by price, leav­ing olive oil well behind other cheaper cook­ing oils.

Forty per­cent of Indians sur­veyed in the report said that they bought olive oil in 250 mil­li­liter bot­tles, allow­ing them to try out the prod­uct with­out mak­ing a larger finan­cial com­mit­ment. Currently, 250 mil­li­liter bot­tles of olive oil range in price from 230 Indian rupees ($3.33) to 600 rupees ($8.69).

Newly imposed and exist­ing tar­iffs on olive oil imports to the coun­try are mostly respon­si­ble for these high prices and have led to a decrease in the mon­e­tary value of vir­gin olive oil imports into India in recent years. However, the tar­iffs have not impacted the vol­umes of imported olive oil.

Pico Lapuente said these tar­iffs will be the largest hur­dle for olive oil exporters try­ing to enter the mar­ket.

“India for us was and is an objec­tive coun­try to pro­mote olive oils and increase their con­sump­tion,” Pico Lapuente said. “The cur­rent prob­lem is that the gov­ern­ment of India has raised tar­iffs by 40 per­cent and, log­i­cally, con­sump­tion has suf­fered a lot.”

“The last climb is inex­plic­a­ble, con­sid­er­ing that India has no pro­duc­tion,” he added.

This is where brand­ing olive oil as a gourmet food prod­uct comes in, accord­ing to Pérez. The Interprofessional Olive Oil Association is already work­ing with other asso­ci­a­tions, includ­ing Asoliva and the Spanish Young Farmers Association (ASAJA), to tar­get adver­tise­ments at spe­cific demo­graph­ics.

The Interprofessional Olive Oil Association com­bines dig­i­tal, print, tele­vi­sion and film adver­tis­ing, along with other pro­mo­tions to reach as many poten­tial buy­ers as pos­si­ble. This has included plac­ing 20,000 adver­tis­ing spots on Indian tele­vi­sion as well as plac­ing ads in eight large-scale print pub­li­ca­tions.

With all of this expo­sure to Spanish olive oil, Pérez is con­fi­dent that con­sump­tion can con­tinue to grow in spite of the tar­iffs.

“In view of the mag­ni­tude of the cam­paign, it is easy to under­stand the favor­able evo­lu­tion of that mar­ket,” Pérez said.




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