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Lebanese Olive


... organic oils uses both as ready cooking oil and as food ingredients, in baked goods, etc. ... to pricing at the time of product introduction, in ... – PowerPoint PPT presentation

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Title: Lebanese Olive

A Guidebook to Marketing Lebanese Olive Oil June
Marketing Lebanese Olive Oil
Understanding the Market Trends
Developing a Marketing Strategy - Understanding
Competition - Understanding the Four Ps of
What to Sell? - Identifying a Product Niche
Where to Sell? - Targeting the Global Market
How to Sell? - Reaching Out to the Target
Market - Pricing and Product Positioning
Table of Contents
How to Expand? - Delivering Value Through
Customer Satisfaction
Understanding the Market Trends Production/
Consumption Trends
  • The European Union (EU) is the worlds leading
    olive-producing region, accounting for about 75
    of global production.
  • The EU is also the worlds top olive oil
    consumer, accounting for about 70 of global
  • There has been steady rise in consumption in
    the EU, especially in the Northern countries,
    over the last decade.
  • The US market for olive oil is expanding at an
    average 20 percent per annum.
  • Olive oil is the leading pourable oil in the
    US market, with sales increasing to 400 million.

Production/ Consumption Trends
Source USDA/ERS 2003
Understanding the Global Market Import/ Export
  • The European Union (EU) is the worlds leading
    olive oil exporter.
  • Imports represent a small proportion of total
    EU consumption. Much of the imported olive oil is
    intended for re-export in blended products.
  • The US is the worlds top olive oil importer,
    accounting for more than 35 percent of world
  • The growing health concerns in the US, Canada,
    Japan, Australia and other parts of the world
    have presented a market opportunity for olive

Import/ Export Trends
Source International Olive Oil Council (IOOC)
December, 2002, estimated
Developing Strategies for the Lebanese Olive
Producers - Understanding Competition
  • The major olive producing countries such as
    Italy, Spain and
  • Greece are increasing production acreage.
  • The EU producers are forming alliances with
    non-EU country
  • producers to cater to growing demands, and
    specific customer
  • preferences
  • The Italian producers continue to dominate the US
  • market, with shipments totaling over 157,000 MT
    in 2000.
  • Although most of this trade was in refined oil
    segment, the
  • Italian export saw growth in all import
  • Increased competition has led to fall in price in
    almost all import
  • categories, although the refined oil prices
    witnessed the biggest decline.
  • Olive producers are adhering to specific quality
    standards such as those set by the
  • International Olive Oil Council to cater to an
    increasingly global customer base.

Understanding Competition
Developing Strategies for the Lebanese Olive
Producers - Understanding the Four Ps of
Product Product Features, Positioning,
Differentiation, Packaging,
Quality Place Geographic Location of
Market, Distribution Channels,
Logistics Price Market Penetration
Pricing, Price Flexibility Promotion
Market Segmentation, Sales Promotion,
The Four Ps of Marketing
Identifying a Product Niche Strategies for the
Lebanese Olive Producers
  • Focus on bottled, high-quality, specialty
    olive oil, rather than sales of bulk product for
    blending and re-export. The blending and
    re-export segment remains a lower value market
    with wide annual fluctuations and prices
    depending on EU production levels.
  • Promote olive oil as an Ethnic specialty
    food. Promoting Lebanese oils as ethnic foods
    and new tastes is likely to draw high-end
    consumers increasingly away from purchases of
    oils from the EUs traditional countries of
    origin of Italy, Spain and Greece.
  • Market more organic olive oil. The EU market
    for organic products is growing faster than in
    the U.S. given the emphasis on environmental and
    non-GM concerns in Europe boosting prospects
    for organic oils. Focus on Germany, the EUs
    largest organic market, as well as the UK and
    Scandinavia. Stress organic oils uses both as
    ready cooking oil and as food ingredients, in
    baked goods, etc.
  • Promote related olive products. Consider
    products with olive ingredients such as olive
    oil soaps, particularly handmade products.
    Emphasize health and beauty benefits, and the
    lack of animal ingredients, preservatives or
    artificial coloring

What to Sell?
Identifying a Product Niche Strategies for the
Lebanese Olive Producers
  • Focus on the virgin and extra virgin oil
    export segments. The US market is already
    dominated by Italian olive oil suppliers. The
    high-value segment of the expanding US and
    Canadian market provides the best opportunity for
    Lebanese exporters.
  • Explore the niche market related to olive oil
    soaps and skin preparations (shampoos, bath oils,
    moisturizers, etc), which are becoming more and
    more popular in the United States because of
    their purported beneficial qualities. Olive oil
    is rich in Vitamin E and A that can help protect
    the skin and prevent dry skin.
  • Emphasize sales to specialty stores and
    gourmet restaurants that typically set higher
    prices for their products, as do the natural
    product stores that focus on organically-certified

What to Sell?
Identifying a Product Niche Strategies for the
Lebanese Olive Producers
  • Develop packaging and nutritional labeling
    that is attractive, provides a story on the
    origin of the oil in Lebanon, and is within the
    US FDA requirements
  • Exporters to Europe need to be aware that the
    EU system of Protected Geographic Indications is
    being used increasingly as a marketing tool and
    that products with these designations are
    becoming more attractive to consumers of high-end

Product Positioning
  • Stress Specialty and Regional characteristics
    Specialty olive oils, from new countries of
    origin with little or no competition from EU
    production, have good sales potential. Quality
    olive oils originating outside the EU are
    increasingly considered to be specialty
    products or luxury items among higher income
  • Position products to address changing customer

What to Sell?
Identifying the Market Place Strategies for
the Lebanese Olive Producers
  • Target northern and central/eastern European
    markets, more than southern European oil
    producing countries, as retail sales in southern
    producer countries are dominated by local
  • Aim at markets with the best opportunities
    including Germany, UK, France, the Netherlands,
    Scandinavia, and the higher-income central and
    eastern European and other EU Candidate States
    due to become EU members in 20004.
  • Target Lebanese and Middle Eastern
    Communities The diaspora of Lebanese
    overseas, particularly in France, the U.K. and
    northern Europe is a strong, if limited, market
    in size. Focus on regional oil origins within
    Lebanon. Supplement marketing to Lebanese
    communities with promotions to other Middle
    Eastern and H Halal communities in the EU.
  • Aggressively pursue the expanding US and
    Canadian market. The US and Canadian markets
    present enormous export opportunities to olive
    producers due to their limited local supplies.
  • Target Lebanese and Middle Eastern
    Communities in the US in addition to mainstream

Where to Sell?
Pricing a Product Strategies for the Lebanese
Olive Producers
  • Stay informed of the international price
    fluctuations in the olive oil industry.
  • Adopt a flexible pricing strategy while
    negotiating with the international brokers.
  • Do not be afraid to price products at the
    high-end, as a substantial consumer segment is
    willing to pay relatively high prices for
    specialty or regional products including olive
  • Aggressive market penetration pricing,
    referring to pricing at the time of product
    introduction, in conjunction with a forceful
    promotional campaign may help Lebanese producers
    capture a share of the established markets.
    However, caution must be used to fully assess the
    market potential and competition on a
    product-by-product basis.

Reaching Out to the Target Market Strategies
for the Lebanese Olive Producers
  • Keep up-to-date on key trends in EU and US
    consumer preferences and adapt marketing
    campaigns to address those trends. Product
    promotions should be ongoing and should
  • Health and nutritional benefits of olive oils and
    olive products.
  • The specialty food characteristics of non-EU
    olive oils, offering geographic origins with
    novelty appeal.
  • Promoting organic oils, as sales are likely to
    increase in the EU even more than in the US,
    given high EU concerns over GM foods.
  • Cost savings to consumers wherever applicable.
    Recent declines in retail prices in many markets
    have led to increased consumer demand in all
    product segments.
  • Introduce Lebanese olive oils at food shows and
    regional trade shows such as the Fancy Food show
    in New York in June, 2003
  • Provide samples of olive oil provided to
    potential buyers. Already, one important New
    York gourmet supermarket, Fairway, sampled
    Lebanese olive oils and judged all of them to be

Reaching Out to the Target Market Strategies
for the Lebanese Olive Producers
  • Obtain feedback from buyers and arrange for test
    shipments. Test Shipments may range from a few
    cases to a container depending on the
    capabilities of the Lebanese exporter. In the
    case of Fairway, they have agreed to purchase
    10-12 cases of 1 liter bottles.
  • In-store product tasting and demonstrations help
    reach the end customer directly. Work with the
    brokers/ willing supermarkets to promote your
    product in store.
  • Become a member of the North American Olive Oil
    Association in order to gain access to
    recommendations on regulatory issues, testing,
    and buyers.

Expanding Opportunities Strategies for the
Lebanese Olive Producers
Market Access Through Alliances
  • Build strategic alliances with EU olive oil
    producer companies that are becoming increasingly
    interested in expanding their production outside
    the EU. The trend to internationalize has
    accelerated as a result of intensifying domestic
    competition, and is leading to more corporate
    alliances whether through mergers, acquisitions,
    or production or export agreements.
  • Companies that are beginning to externalize their
    production, i.e. to set up manufacturing plants
    abroad include in particular Spanish olive oil
  • Target countries include several in Latin America
    such as Argentina, as well as in Mediterranean
    North African countries such as Tunisia and
  • Lebanese companies in other sectors, including
    banking, finance, and insurance and ICT are
    increasingly forming strategic alliances or
    partnerships. Many are expanding their economies
    of scale through local mergers, to obtain greater
  • Consider similar opportunities for alliances,
    particularly with EU producers in Italy and

How to Expand in an Existing Market?
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