Why Greek olive oil lags in the US mar­ket

Kathimerini English - - Front Page - BY DIM­I­TRA MANIFAVA

Greek olive oil­has been un­able to cap­i­tal­ize on the con­sid­er­able prospects it has in the US mar­ket due to its high price and the lack of stan­dard­iza­tion and dif­fer­en­ti­a­tion, which means that the Greek prod­uct has to com­pete not only with its Ital­ian and Span­ish coun­ter­parts but also with im­ports to the US from Tu­nisia, Morocco and even Ar­gentina.

Data from a re­port by the Of­fice for Eco­nomic and Com­mer­cial Af­fairs at the Em­bassy of Greece in Wash­ing­ton are quite re­veal­ing about Greek olive oil im­ports in the US. A to­tal of 306,800 tons of olive oil was im­ported by the US in 2012, of which 155,000 tons came from Italy, 81,600 tons was from Spain and 39,600 tons from Tu­nisia.

Greece was the sev­enth-big­gest sup­plier of olive oil to the US with just 4,800 tons in 2012 – i.e. a 1.56 per­cent share, be­low Morocco, Ar­gentina and Chile, which made their first ap­pear­ance as olive oil sup­pli­ers to the US mar­ket in 2000 and have since strength­ened their pres­ence.

One of the main prob­lems that has lim­ited Greek olive oil’s pen­e­tra­tion of the US mar­ket has been its high price. Ac­cord­ing to the above re­port, the price per ton of the Greek prod­uct was the high­est in 2012, at $3,426, with Ital­ian olive oil cost­ing $3,352/ton and the av­er­age price stand­ing at $3,059/ton. The high price of Greek olive oil is re­lated both to its qual­ity and the high cost of pro­duc­tion due to the lack of economies of scale.

The well-known prob­lem of the lim­ited stan­dard­iza­tion of olive oil in Greece has re­sulted in quan­ti­ties be­ing ex­ported with­out any dif­fer­en­ti­a­tion re­gard­ing their qual­ity or pack­ag­ing, un­like the Ital­ian producers. In fact, a large por­tion of the Greek prod­uct is ex­ported in bulk to Italy and is pack­aged there be­fore be­ing sent to the US by Ital­ian cor­po­ra­tions.

In a coun­try with a cul­tural ab­sence of olive oil con­sump­tion such as the US, where the mix­i­mum pack­ag­ing size is 3 liters, con­sumers choose the prod­uct with the most at­trac­tive price. Olive oil may have made its way into half of US house-

of the lim­ited stan­dard­iza­tion of olive oil in Greece has re­sulted in quan­ti­ties be­ing ex­ported with­out any dif­fer­en­ti­a­tion re­gard­ing their qual­ity or pack­ag­ing, un­like the Ital­ian producers. holds in the last five years, but the av­er­age an­nual con­sump­tion is par­tic­u­larly low, at 1 liter per capita, when in Greece it ex­ceeds 24 liters.

It is the ris­ing pro­file of olive oil in US nutritional habits com­bined with the mar­gin for more per capita con- sump­tion that demon­strate the po­ten­tial Greek ex­ports have in that mar­ket, given also the pres­ence of the strong Greek com­mu­nity there. The re­port con­cludes that del­i­catessens could prove to be a cru­cial dis­tri­bu­tion chan­nel, pro­vided there is an ad­e­quate stan­dard­iza­tion of the Greek prod­uct. That is the case be­cause in the con­text of the hype for Mediter­ranean food, cer­tain US con­sumers are will­ing to pay up to $60 per liter to get top-qual­ity ex­tra-vir­gin olive oil.

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