Deoleo Plans 'Biggest Ever' Promotional Campaign

Summary

Deoleo, the lead­ing olive oil bot­tler, faced chal­lenges due to slump­ing con­sump­tion, pri­vate label com­pe­ti­tion, and neg­a­tive press, lead­ing to sig­nif­i­cant losses. In response, the com­pany has refo­cused on qual­ity, imple­mented new sourc­ing strate­gies, and is prepar­ing for a major pro­mo­tional cam­paign in the U.S. mar­ket to empha­size the ben­e­fits of olive oil beyond sal­ads.

Deoleo, the bot­tler of the world’s lead­ing olive oil brands, has under­gone a string of trans­for­ma­tions in recent years to repo­si­tion itself in a rapidly chang­ing global olive oil mar­ket.

While the finan­cial cri­sis in Europe led to slump­ing con­sump­tion in tra­di­tional strong­holds, retail­ers have been build­ing up their own pri­vate labels at the expense of Deoleo’s flag­ship Bertolli, Carapelli and Carbonell brands. A relent­less stream of media reports and legal chal­lenges over the qual­ity and label­ing prac­tices of the biggest olive oil pro­duc­ers, and even tax reforms in Spain have taken a heavy toll on the com­pany, which posted a loss of €179 mil­lion in 2016.

After years of bruis­ing set­backs, the com­pany closed plants, reduced its work­force by 18 per­cent, increased prices and focused on its most prof­itable brands. It imple­mented a strat­egy of pur­chas­ing olive oil directly from pro­duc­ers and improv­ing the uti­liza­tion of its fac­to­ries. And, it set its sights on the prof­itable North American mar­ket.

Last year, when Pierluigi Rosato replaced Manuel Arroyo as CEO of the Madrid-based multi­na­tional, he swiftly removed Armando Islas, the com­pa­ny’s sup­ply chain offi­cer and assumed the role of sourc­ing him­self. And the ethos Rosato has laid down for the 62-year-old com­pany is built on a renewed com­mit­ment to qual­ity and adding value.

“We’ve had this shift here at Deoleo,” said the com­pa­ny’s vice pres­i­dent of mar­ket­ing, Fernando Hererra. ​“Pierluigi has an extreme edict that goes all the way through­out the entire orga­ni­za­tion that is com­mit­ted to high qual­ity,” Hererra told Olive Oil Times pub­lisher Curtis Cord in an inter­view this week for the ​‘On Olive Oil’ pod­cast.

Three of the com­pa­ny’s lim­ited-edi­tion oils were awarded recently at the New York International Olive Oil Competition. And while the small-batch spe­cial blends won’t reach the mil­lions of con­sumers its core prod­ucts do, Cord won­dered if the mere fact that Deoleo proved it was capa­ble of pro­duc­ing award-win­ning extra vir­gin olive oil was yet another sign of the ​“sea change” he described when more pro­duc­ers than ever were rec­og­nized for qual­ity at the New York event.

“Pierluigi has taken it upon him­self to pro­cure all of the olive oils. His approach is to meet with the grow­ers, under­stand the grow­ers and then cre­ate the rela­tion­ships. Not only are we talk­ing to the grow­ers but we’re also talk­ing to what we call the ​‘know­ers.’ Pierluigi is mak­ing all of these, he’s per­son­ally mak­ing these deci­sions since he’s come to the helm of Deoleo,” Herrera said.

Now, the com­pany is on the verge of launch­ing the largest pro­mo­tional cam­paign in its his­tory in a bid to woo con­sumers to its brands, and to use more olive oil in gen­eral, Herrera said. ​“This will be the biggest invest­ment that Deoleo has ever made in con­sumer out­reach,” he con­firmed, though the com­pany later declined to dis­close the amount of the invest­ment. ​“How can we live beyond the salad, how can we live beyond the lit­tle drips — how do we move it to a pour?”

The cam­paign is slated to launch later this year in the U.S. with the slo­gan, ​“the recipe is sim­ple.”

“There’s no point in tak­ing the cat­e­gory down. What we need to do and we take very seri­ously is our respon­si­bil­ity to com­mu­ni­cate to con­sumers the ben­e­fits of olive oil and all the rea­sons you can use it beyond the salad.”

Of course, the big ques­tion is how the com­pany will carry its new ethos through to its core prod­ucts and ensure that con­sumers who pay more for a bot­tle labeled ​‘extra vir­gin’ get what they deserve every time — some­thing the largest olive oil com­pa­nies have been famously unpre­dictable at doing.

“Yes, there’s been some neg­a­tive press out there,” Herrera con­ceded. ​“We feel that the only way that the olive oil indus­try can improve and con­tinue to thrive is in the con­text of qual­ity. If we have good qual­ity for the con­sumer, it actu­ally has this kind of great domino effect. For us, it’s some­thing that we’re not walk­ing away from. It’s now actu­ally part of our daily rou­tine.”

Listen to the com­plete inter­view here.

• On Olive Oil pod­cast