EVOO in the FMCG business worlwide

Unlike most products in the FMCG sector, the EVOO producers have a sort of protection in the market just because the very nature of the product they produce, which is that the EVOO has to be elaborated hours after the olives are picked from the three. That characteristic makes the EVOO elaboration process impossible to be taken abroad because the olive will be perished during the transportation. Being like that, any distribution company willing to import EVOO to the market that it covers, will have no other way but to find a producer anywhere to buy their product and collaborate together. Some distribution companies have constructed storage and bottling plants but they have still to buy a finished product whether it is to mix with other oils or to bottle it pure. That should leave the producer with the whole control of elaboration and should allow the grove owner to play a more important role when it comes the moment of distribution.

Today, worldwide, the olive oil has two main ways to do business with: The first one is entering in the retail channel by price. Many big distribution companies are getting a source of cheap product and bottling it with their own brand and selling it (knowing that demand is rising everywhere) for prices difficult to compete with. The second way to do business is by getting a product of quality that is going to be sold by a bigger price. Certain producers will have no other choice but to bet for the quality way because by price would be impossible to compete against the big distribution.

The good thing about it is that because its nature (and the rising demand going on in the world) the EVOO producers have the control of the elaboration process and investing in quality they would get a different product that will be of high quality and will attract its share of consumers. Countries like China, India and Brazil have just discovered the product (ones sooner that others) and soon will become bigger consumers in the world. I think that there is an opportunity of good business ahead (because more people start consume the product and because among them there will be a community of customers willing to pay a bit more for a better quality product) but producers will have to be willing to play more important role when it comes to the distribution. The reality is that EVOO is produced today (we will see in the future) in few countries in the world and that producers in that places are still not in the distribution channel. Producers need to risk/invest resources and travel and offer their products abroad where the demand is rising, it is going to be though but once they are in the destination the EVOO producers will be in a market where only them have the source of the product they trade because unlike wine, milk, beer, even coffee can be bought in origin and toasted and finished abroad, EVOO elaboration can not be deallocated.

The conclusion is that everyone in FMCG sector interested in working with EVOO should start informing about the real qualities that the product has (and fight cheating and scamming) and that both the big distribution and the producers should have a proper and fair share of a market that will never stop evolving. We will see what the future brings but today is all about promoting the product.