Monday, January 9, 2012

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.