Large importer of olive oil into the US first to join quality programme.

Pompeian Inc, one of the largest importers of olive oil into the United States, has become the first company to participate in the USDA quality programme for olive oil.

Reported in the Olive Oil Times, the move is the first direct response to efforts to improve the quality of olive oil available to consumers in the US.

Interestingly the first company to join the voluntary standard regime is an importer and the comment facility which follows the article in the Olive Oil Times is empty. Usually there is a lot of chatter following reports on quality – ironically this perceived win has failed to attract any accolades.

Read the article: http://www.oliveoiltimes.com/olive-oil-basics/pompeian-usda-olive-oil-monitoring/25740

Olive oil imports into Australia back up again.

Imports of olive oil into Australia in January 2012 increased by almost 1200 tonnes
compared with the same month in 2011. This follows substantial dips in imports in November and December.

Overall imports into Australia dropped by 10% in the four months to January 2012. Canada showed an 18% decrease in imports and the USA a 10% increase over the same period.
(Source IOC)

Spanish olive oil production at record levels as prices hit record lows

The Spanish Olive Oil Agency reports that Spanish olive oil production during 2011/2012 has all previous levels and is 185,000 tonnes above the level of the previous year. Spain produces approximately 50% of the world’s olive oil.

Prices for extra virgin olive oil are down 13% in Spain (€1.75/kg) and 28% in Italy (€2.35/kg).
(Source IOC)

Sharp Decline in Olive Oil Imports into Australia

Olive oil imports into Australia declined sharply in the last two months of 2011 according to data released by the International Olive Council.

In November 2011 imports declined by 14% with an even sharper decline of 55% in December 2011. No explanation was offered for the sharp decline. Imports also declined by 7% in Canada during the same period.

China and Russia showed substantial increases in imports, with Japan, Brazil and the United States showed smaller increases.

Australian Olive Oil Sales in Recession

According to the Retail World Annual Report for 2011, candy sales, including chocolate, have grown 5.4% in value, as have chewing gum and other ‘refresher’ sales – up 3.1%. Herbs and spices are up 4.9%.

Not so with olive oil where sales have dropped 10% in value and 1.8% in volume during 2011.

The annual report summarises the sales through Coles, Woolworths and Metcash.

The olive oil sales totalled $247.4million. Extra virgin olive oil made up 58.4% of this total with extra light at 21.3% and pure olive oil at 20%.

Imported olive oil totalled 77.1% of sales, with Australian produced olive oil making up the balance of 22.9%.

Conga foods was the market leader with 36.2% of olive oil sales by value, followed by ‘Private Label’ at 16.3%, Minerva at 15.7% and Cobram Estate at 9.4%.

The seeded oils category, which covers the other vegetable oils that compete with olive oil also declined in value by 3.8%, 2.2% by volume.

Perhaps we can boost olive oil sales by increasing its use in the manufacture of chocolate and other candies!

More seriously, the downward trend is concerning and the reasons for it must be analysed and an industry response implemented. Some possible causes are:

1. The higher price of olive oil compared with competing fats such as vegetable oil and butter.
2. Consumers heeding dieticians’ advice to reduce fat consumption (while ignoring advice to consume less sugar based candies!).
3. The negative publicity concerning olive oil fraud and mislabelling resulting in a loss of confidence in olive oil products in general.
4. Consumers shifting to cheaper butter for cooking as has occurred in Spain to a small extent.
   

Australian Olive Oil Market Progress Report

The most recent figures on world trade in olive oil reveal some interesting facts about the Australian market.

While the data for 2009/10 is provisional and those for 2010/11 are estimates, the proportion of Australian olive oil consumed in the local Australian market has changed by just 3% over the last 4 years.

Previous analysis by Olive Business has shown that sales of local extra virgin olive oil have made substantial gains (http://olivebusiness.blogspot.com/2010/01/local-olive-oils-make-market-inroads.html). However, when taken as a percentage of overall olive oil consumption it seems little has changed since the major gains in 2007/8 when the local oils consumed rose from 14% to 23%.

Analysis of the export data also reveals that over the past three years the percentage of local production exported has not increased.


There could be many reasons for this apparent stagnation of market share. For example, we may be seeing a relative decline in olive oil consumption when compared with other vegetable oils as another Olive Business analysis shows. (http://olivebusiness.blogspot.com/2010/06/olive-oil-loses-ground-in-world.html)

It is notable that there is little or no financial or market modelling of olive oil with competing products providing background for decision making on standards and promotional activities. An investment in models would help predict the impact of price fluctuations, exchange rates, reduced imports, changes in labelling and consumer reaction. This modelling should cover all market segments.

The Australian industry would be well advised to critically examine the complex interactions in the marketplace and reconsider the current marketing strategies. Some of the issues to be considered are:

1. Why is there little growth in consumption of olive oil in Australia over the last five years?
2. Why has the proportion of Australian olive oil consumed locally seemingly reached a plateau?
3. Is price a barrier to consumption when compared with other vegetable oils?
4. Has the negative publicity about low quality olive oils had an impact on sales overall?
5. Has the consumption of extra virgin olive oil reached a plateau?
6. Is there the opportunity to make inroads into the lower quality/price segment of the olive oil market?
7. Has current marketing strategy achieved as much as it can and is it time for change?

Labelling Madness

Yes, I am being driven mad by what should be the simplest of exercises – labelling our extra virgin olive oil.

Not so simple with the multitude of reviews, cessations and new rules which are happening with no coordination and little consideration of the producer’s bottom line.

Our olive oil is certified organic, so we have those rules to abide by – submitting our label for approval. AQIS have decided, for reasons best known to themselves, to withdraw the use of their seal so that has to come off our label and we are told that we have to have the IFOAM logo on the label now. Then the OFA are developing a national organic mark which will have to go on the label – they haven’t decided on the symbol yet. Seems like a lot of free advertising on our labels.

Oh yes, AQIS is conducting a review of organic legislation and may be introducing another mandatory regulatory mark for export. Soon there will be so many ‘marks’ on the label there will be little room for anything else.

Wondering what all the acronyms stand for – I am not going to bore you by spelling so many out. So many organisations with a finger in the organic pie.

Now there is the Australian and New Zealand Government’s Food labelling review which is about to report its findings, presumably to be enacted within the year forcing more changes to olive oil labels. These are expected to be more about health claims and nutrition panels – so there goes the back label for redesign.

Then according to the draft of the proposed Australian standards for olive and olive-pomace oils being orchestrated by the AOA and Standards Australia we are going to be expressly forbidden – yes forbidden – to describe our olive as olive oil on the label (12.3.2.2. ……..Any other designations (e.g. Olive Oil,…………) are expressly forbidden).

Seriously – they can’t be serious. Added to that there are more rules about what we can use to describe the taste of the oil, whether it was pressed or extracted, hot or cold, first, second or last etc, etc, etc

For export we will still be required to abide by the International Olive Council (IOC) Trade Standard for Olive Oil and Olive Pomace Oils. They differ from the proposed Australian Standard so here comes another label.

We have to have a label designed now for the coming season to replace the perfectly good one we have (we still have a few thousand left) which has been made obsolete by decisions by anonymous committees in far away places. And with all the rule changes in the pipeline the new label will probably be obsolete before it is printed.

For goodness sake, we are just trying to sell olive oil – organic extra virgin olive oil - and make some money out of it. The latter is increasingly hard to achieve with so much time and resources wasted in abiding by these ever changing rules made by those whose product is rules and more rules.