Think Outside The Basics

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Think Outside The Basics

12/02/2011

To grow sales of store brand olive oil, retailers might want to look to bold flavor infusions, super-premium products, and more.

Thanks to its health halo and distinct flavor, olive oil continues to rise in popularity among North American consumers. And store brand olive oil is becoming a palatable option for more and more value-minded consumers.

Thom Blischok, global president, innovation and strategy for Chicago-based SymphonyIRI Group, says he expects moderate growth for the olive oil segment (and cooking oils, in general) in the coming year, with "unique flavors and packaging" helping to drive that growth.

Trends with traction

Speaking of packaging, one current trend with staying power is that toward PET bottles.

"Years ago, it was either glass or tin cans for olive oil, and plastic simply was not accepted," notes Mark Coleman, vice president, Retail division for Ayer, Mass.-based Catania-Spagna Corp. "[The] perception was that plastic did not hold the flavor of the oil as long as glass did, and it has always been a very difficult challenge to change the mind of a loyal olive oil consumer."

But the emergence of the club store format really helped to bring olive oil in PET bottles to the tables of more American consumers, Coleman says, significantly boosting acceptance among all consumers except the small base of what he calls "true olive oil aficionados." And the price savings to retailers (and, ultimately, consumers) in relation to both the bottles and their transport are substantial.

"The savings between a typical glass bottle and a PET plastic bottle can equate to over 35 cents per bottle," he says. "Since plastic bottles are obviously more durable than glass or even tin cans, the damage bills that the category entertains are reduced by a fairly large percentage."

Although flavored olive oils are plentiful in specialty retail stores, they have much room for growth with mainstream grocery outlets. Virginia Lee, senior research analyst for Euromonitor International, Chicago, notes that olive oils with bolder flavors such as chipotle or infused with herbs and spices allow convenience-minded consumers to easily and quickly add flavor to their dishes as a marinade or grill sauce.

"Within flavored olive oils, olive oil/balsamic vinegar combinations are expected to remain popular," Lee adds. "Safeway offers a Safeway Select Balsamic Garlic Dipping Oil. While marketed as dipping oils, these [types of] products can be tossed into a fresh salad as well."

Trends on the horizon

A number of trends outside of packaging and flavoring also are worth considering for store brand olive oil development. Shannon Brown, an analyst for the Packaged Facts division of Rockville, Md.-based MarketResearch.com, points to fortified/ functional olive oils that offer enhanced health benefits (via, for example, omega-3 fatty acids) as one watch-worthy trend. She also predicts an increased emphasis on the growing region for marketing purposes, as is seen in the wine market.

Lee agrees with the latter trend, adding that Americans increasingly want to know the origins of their food and "who produced it," and noting that Euromonitor sees more Californian olive oil companies taking a "meet the farmer" approach. In addition, new USDA voluntary standards for grades of olive oil, which went into effect in October, are likely to spur more development in super-premium products that include quality indicators such as acidity levels on the package label to reassure consumers in terms of quality.