Offer Something Slick

Fifteen years ago, household penetration of olive oil was just over 30 percent in the United States, says Eryn Balch, executive vice president for the North American Olive Oil Association, Neptune, N.J. Now, household penetration is up to 50 percent, showing good progress while still leaving quite a bit of room for growth. Furthermore, 15 years ago 65 percent of category sales were “regular” olive oil, whereas today, 60 percent of category sales are extra-virgin olive oil.

And much of the olive oil purchased today by consumers is under retailers’ store brands. During the 52 weeks ending May 19, 2013, private label maintained a one-third share of the edible fats and oils market, states “Butter, Margarine and Oils — US,” an August report from global market research firm Mintel.

Trends with traction

One trend that will continue into 2014 is that toward flavored olive oils, both sweet and savory. These oils are gaining ground, especially as gifts or for use during special occasions and holidays, Mintel states. Some examples include garlic, lemon, basil and even blood orange. Interestingly, consumers who buy flavored olive oils are also more likely to buy organic and locally processed oils, Mintel reports. Retailers, then, might want to consider offering a premium olive oil range with these characteristics in addition to their typical offerings.

Another trend that will continue to have traction in 2014 is packaging olive oil in PET plastic bottles rather than glass, states Mark Coleman, vice president, Retail Division for Ayer, Mass.-based Catania-Spagna. The cost savings related to bottles, freight and reduced damages is tremendous, and manufacturers and retailers can pass along that cost savings to consumers.

Trends on the horizon

As consumers use olive oil more often and in place of traditional cooking oils, they are becoming increasingly educated as to the flavor profiles of olive oil itself.

“In the last few years, consumers have begun to understand that extra-virgin olive oil is very similar to wine,” Balch says. “There are a broad range of flavor profiles possible, depending on factors like the olive variety, origin of the oil, and growing conditions each season.”

This is leading to an emerging trend for region-specific and variety-specific oils such as Greek Koroneiki, Italian Coratina and California Arbequina to be offered in stores and online, she adds.

Unfortunately, the American consumer’s desire for the lowest price is leading to another serious trend in the olive oil category: adulteration.

“Most of the adulteration takes place once the olive oil is already here in the United States,” Coleman says. “It is at that point where the packer can blend pure or extra-virgin olive oil with less expensive oils like olive pomace oil or a seed oil like soybean oil.”

Common sense could keep retail category buyers and consumers from purchasing adulterated olive oil. For example, a 3-liter tin of “olive oil” on the shelf retailing for $7.99 should raise a red flag, Coleman says. Retailers also could use this negative situation to draw attention to the authenticity and quality of their private label olive oil products, driving sales and improving the reputation of their private brand throughout the store.